QUẢN TRỊ HỌC

CHAPTER 1:
THE WORLD OF INNOVATIVE MANAGEMENT

Management is the attainment of organizational goals in an effective and efficient manner through
planning, organizing, leading, and controlling organizational resources.
Managers get things done by coordinating and motivating other people

1. Basic Functions of Management:

- Planning means identifying goals for future organizational performance and deciding on the tasks
and use of resources needed to attain them.
- Organizing involves assigning tasks, grouping tasks into departments, delegating authority, and
allocating resources across the organization.
- Leading is the use of influence to motivate employees to achieve organizational goals.
- Controlling means monitoring employees’ activities, determining whether the organization is
moving toward its goals, and making corrections as necessary.
- Organizational effectiveness is the degree to which the organization achieves a stated goal, or
succeeds in accomplishing what it tries to do.
- Organizational efficiency refers to the amount of resources used to achieve an organizational goal.

2. Management Skills:
- Technical skills: manager’s ability to demonstrate understanding and proficiency in the performance
of specific tasks, important at lower organizational levels, less important as managers move up the
hierarchy
- Human skills: manager’s ability to work with and through other people and to work effectively as
a group member, essential for frontline managers, important for managers at all levels
-Conceptual skills: cognitive ability to see the organization as a whole system and the relationships
among its parts, important for top managers

3. Management Types:
- Vertical differences:
 Top managers(president, chairperson, executive director, CEO, executive vice president)
responsible for the entire organization, setting organizational goals, defining strategies for achieving
them, monitoring and interpreting the external environment, and making decisions that affect the
entire organization.
 Middle managers(department head, division head, manager of quality control, director of the
research lab) responsible for business units and major departments, implementing the overall
strategies and policies defined by top managers, concerned with the near future, rather than with
long-range planning.
 First-line managers(supervisor, line manager, section chief, office manager) responsible for the
production of goods and services, application of rules and procedures to achieve efficient production,
provide technical assistance, and motivate subordinates
 Project manager: responsible for a temporary work project that involves the participation of people
from various functions and levels of the organization, and outside the company

- Horizontal differences:
 Functional managers: responsible for departments(advertising, sales, finance, human resources,
manufacturing, accounting) that perform a single functional task and have employees with similar
training and skills. Line managers are responsible for the manufacturing and marketing departments
that make or sell the product or service. Staff managers are in charge of departments, such as
finance and human resources, that support line departments.
 General managers: responsible for several departments that perform different functions,
responsible for a self-contained division

4. Manager roles:

CHAPTER 3:
THE ENVIRONMENT AND CORPORATE CULTURE
A. EXTERNAL ORGANIZATIONAL ENVIRONMENT
External organizational environment includes all elements existing outside the boundary of the
organization that have the potential to affect the organization.
v Task environment is closer to the organization and includes the sectors that conduct day-to-day
transactions with the organization and directly influence its basic operations and performance.
- Customers
- Competitor
- Suppliers
- Labor market

v General environment affects organizations indirectly, the outer layer

- International dimension: events originating in foreign countries.
- Technological dimension
- Sociocultural dimension: the demographic characteristics, norms, customs, and values of the
general population.
- Economic dimension (consumer purchasing power, the unemployment rate, interest rates): general
economic health of the country or region in which the organization operates.
- Legal-political dimension: government regulations at the local, state, and federal levels, political
activities designed to influence company behavior.
- Natural dimension

B. THE ORGANIZATION–ENVIRONMENT RELATIONSHIP

- Environmental uncertainty: managers do not have sufficient information about environmental
factors to understand and predict environmental needs and changes.
- Strategic issues are events and forces that alter an organization’s ability to achieve its goals.
- Boundary spanning links to and coordinates the organization with key elements in the external
environment.
- A merger occurs when two or more organizations combine to become one.
- A joint venture is a strategic alliance or program by two or more organizations.

C. INTERNAL ENVIRONMENT: CORPORATE CULTURE

Culture as the set of key values, beliefs, understandings, and norms shared by members of an
organization.
- Symbol is an object, act, or event that conveys meaning to others. Symbols can be considered a rich,
nonverbal language that vibrantly conveys the organization’s important values concerning how
people relate to one another and interact with the environment.
- Story is a narrative based on true events that is repeated frequently and shared among
organizational employees.
- Hero is a figure who exemplifies the deeds, character, and attributes of a strong culture.
- Slogan is a phrase or sentence that succinctly expresses a key corporate value.
- Ceremony is a planned activity at a special event that is conducted for the benefit of an audience.

Culture can be analyzed at two levels. At the surface level are visible artifacts. Visible artifacts are all
the things one can see, hear, and observe by watching members of the organization. At a deeper, less
obvious level are values and beliefs, which are not observable but can be discerned from how
people explain and justify what they do. Members of the organization hold some values at a
conscious level. Some values become so deeply embedded in a culture that members are no longer
consciously aware of them.

1. Types of Culture:
- Adaptability culture : environment requiring fast response and highrisk decision making.
- Achievement culture: organizations concerned with serving specific customers in the external
environment, but without the intense need for flexibility and rapid change, result-oriented
- Involvement culture: an internal focus on the participation of employees to adapt rapidly to
changing needs from the environment.
- Consistency culture: an internal focus and a consistency orientation for a stable environment.

2. Shaping Corporate Culture for Innovative Response:

High-performance culture, a culture that (1) is based on a solid organizational mission or purpose, (2)
embodies shared adaptive values that guide decisions and business practices, and (3) encourages
individual employee ownership of both bottomline results and the organization’s cultural backbone.

Cultural leader defines and uses signals and symbols to influence corporate culture
-articulates a vision for the organizational culture that employees can believe in
-heeds the day-to-day activities that reinforce the cultural vision.

CHAPTER 7:
PLANNING AND GOAL SETTING

Mission: the organization’s reason for existence

A mission statement is a broadly stated definition of the organization’s basic business scope and
operations that distinguishes it from similar types of organizations
A goal: a desired future circumstance or condition that the organization wants to realize.
A plan: a blueprint specifying the resource allocations, schedules, and other actions necessary for
attaining goals.

1. Levels of Goals and Plans

- Strategic goals are broad statements of where the organization wants to be in the future and
pertain to the organization as a whole.
- Strategic plans are the action steps by which an organization intends to attain strategic goals.
- Tactical goals are the outcomes that major divisions and departments must achieve for the
organization to reach its overall.
- Tactical plans are designed to help execute major strategic plans and to accomplish a specific part
of the company’s strategy.
- Operational goals are specific, measurable results that are expected from departments, work
groups, and individuals
- Operational plans specify the action steps toward achieving operational goals and support tactical
activities.

+ Single-use plans are plans that are developed to achieve a set of goals that are unlikely to be
repeated in the future.
+ Standing plans are ongoing plans that are used to provide guidance for tasks that occur repeatedly
in the organization.

 Planning task force: a temporary group of line managers responsible for developing strategic
plans
Key performance indicators (KPIs) are measures that reflect how well lower level goals are helping
the organization progress toward attaining its strategic goal.

2. Operational Goal Management Methods:

- Management-by-objectives (MBO) is a method whereby managers and employees define goals for
every department, project, and person and use them to monitor subsequent performance, doesn’t
work well in rapidly-changing environment
Set goal -> Develop action plan -> Review progress -> Appraisal performance
(most difficult)
- Management by means (MBM) is a recent approach that focuses people on the methods and
processes used to attain results, rather than on the results themselves

3. Planning for a Turbulent Environment:

- Contingency planning identifies important factors in the environment and defines a range of
alternative responses to be taken in the case of emergencies, setbacks, or unexpected conditions.
- Scenario building: managers look at trends and discontinuities and imagine possible alternative
futures to build a framework within which unexpected future events can be managed.
- Crisis planning involves the stages of prevention,preparation and containment
CHAPTER 8:
STRATEGY FORMULATION AND EXECUTION

Strategic thinking means to take the long-term view and to see the big picture including the
organization and the competitive environment and consider how they fit together. Important
for both the businesses and nonprofit organizations

Strategic management refers to the set of decisions and actions used to formulate and execute
strategies that will provide a competitively superior fit between the organization and its
environment so as to achieve organizational goals

Strategy is the plan of action that describes resource allocation and activities for dealing with
the environment, achieving a competitive advantage, and attaining the organization’s goals

Competitive advantage refers to what sets the organization apart from others and provides it
with a distinctive edge for meeting customer or client needs in the marketplace

Core competence: sth that the organization does especially well in comparison to its competitors

Synergy: When organizational parts interact to produce a joint effect that is greater than the
sum of the parts acting alone, can be obtained through alliances and partnerships

Value can be defined as the combination of benefits received and costs paid

A. 3 LEVELS OF STRATEGY
Corporate-level strategy pertains to the organization as a whole and the combination of
business units and product lines that make up the corporate entity - acquisition of new
businesses; additions or divestments of business units, plants, or product lines; and joint
ventures with other corporations in new areas.

Business-level strategy pertains to each business unit or product line - advertising, direction,
and extent of R&D; product changes; new-product development; equipment and facilities; and
expansion or contraction of product and service lines

Functional-level strategy pertains to the major functional departments within the business unit
- all of the major functions, including finance, R&D, marketing, and manufacturing

B. THE STRATEGIC MANAGEMENT PROCESS

Strategy formulation includes the planning and decision making that lead to the establishment
of the firm’s goals and the development of a specific strategic plan. Strategy formulation
includes assessing the external environment and internal problems to identify strategic issues,
then integrating the results into goals and strategy

Strategy execution: the use of managerial and organizational tools to direct resources toward
accomplishing strategic results. Strategy execution is the administration and implementation of
the strategic plan, the most important and difficult

SWOT analysis:

+ Strength: internal characteristics that the organization can exploit to achieve its strategic
performance goals

+ Weakness: internal characteristics that might inhibit or restrict the organization’s

performance.

+ Opportunity: external characteristics that have the potential to help the org achieve or
exceed its strategic goals
+ Threat: external characteristics that may prevent the org from achieving its strategic goals.

C. FORMULATE CORPORATE-LEVEL STRATEGY (3 approaches)

1. Portfolio Strategy: the mix of business units (SBU) and product lines that fit together in a
logical way to provide synergy and competitive advantage

SBU: a balanced mix of business divisions

2. The BCG Matrix: 2 dimensions—business growth rate and market share

+ The star: large market share - rapidly growing industry

+ The cash cow: large market share - a mature, slow-growth industry - dominant business

+ The question mark: small market share - a new, rapidly growing industry

+ The dog: small market share - slow-growth market.

3. Diversification Strategy: moving into new lines of business

 Related diversification means moving into a new business that is related to the
corporation’s existing business activities.

• Unrelated diversification refers to expanding into totally new lines of business.

• Vertical integration: expanding into businesses that either provide the supplies needed to
make products or distribute and sell the company’s products.

D. FORMULATE BUSINESS-LEVEL STRATEGY

5 Competitive Forces (missing Rivalry among competitors)

3 Competitive Strategies

+ Differentiation strategy: an attempt to distinguish the firm’s products or services from others

+ Cost leadership strategy: the org seeks efficient facilities, pursues cost reductions, and uses
tight cost controls to produce products more efficiently than competitors, maintaining stability
rather than pursuing innovation and growth but can certainly lead to growth

+ Focus strategy: the organization concentrates on a specific regional market or buyer group.
The company will use either a differentiation or cost leadership approach

E. FORMULATE FUNCTIONAL-LEVEL STRATEGY

F. SEVERAL TOOLS FOR SUCCESSFUL STRATEGY EXECUTION (the key is embeddedness)

CHAPTER 9:

MANAGERIAL DECISION MAKING

Decision is a choice made from available alternatives

Decision making is the process of identifying problems and opportunities and resolving them

1. TYPES OF DECISIONS:

+ Programmed decisions involve situations that have occurred often enough to enable decision
rules to be developed and applied in the future.

+ Nonprogrammed decisions(new product or service, acquire a company, build a new factory, enter
a new geographical market, or relocate headquarters) are made in response to situations that are
unique, are poorly defined and largely unstructured, and have important consequences for the
organization, related to strategic planning

2. TYPES OF PROBLEMS:

+ Certainty: all the information the decision maker needs is fully available. (NOT A PROBLEM)

+ Risk: a decision has clear-cut goals and that good information is available, but the future
outcomes associated with each alternative are subject to some chance of loss or failure.

+ Uncertainty (price, production costs, volume, or future interest rates): managers know which goals
they wish to achieve, but information about alternatives and future events is incomplete.

+ Ambiguity : the most difficult decision situation, goals or the problem is unclear, alternatives are
difficult to define, and information about outcomes is unavailable. A highly ambiguous situation can
create what is sometimes called a wicked decision problem ->there often is no “right” answer ->
managers must conjure up reasonable scenarios in the absence of clear information

3. THE IDEAL, RATIONAL MODEL

The classical model of decision making is based on rational economic assumptions and manager
beliefs about what ideal decision making should be, considered to be normative, most useful when
applied to programmed decisions and to decisions characterized by certainty or risk

+ operates to accomplish established goals. Problems are formulated and defined.

+ strives for conditions of certainty, gathering complete information. All alternatives and the
potential results of each are calculated

+ Criteria for evaluating alternatives are known. The decision maker selects the alternative that will
maximize the economic return to the organization

+ The decision maker is rational and uses logic

 The growth of big data techniques has expanded the use of the classical approach.
4. HOW MANAGERS ACTUALLY MAKE DECISIONS

- Besides classical model, another approach is administrative model, which is descriptive, refers to
how managers ACTUALLY make decisions other than how they SHOULD make decisions, most useful
when applied to nonprogrammed decisions, uncertainty, and ambiguity

 Goals are vague, conflicting, and lack consensus. Managers often are unaware of problems or
opportunities that exist in the organization.

● Rational procedures are not always used, and, when they are, they are confined to a simplistic view
of the problem

● Managers’ searches for alternatives are limited.

● Most managers settle for a satisficing rather than a maximizing solution

+ Bounded rationality means that people have limits, or boundaries, on how rational they can be.

+ Satisficing means that decision makers choose the first solution alternative that satisfies minimal
decision criteria.

+ Intuition represents a quick apprehension of a decision situation based on past experience but
without conscious thought, an ability to recognize patterns at lightning speed

+ Quasirationality: combination of intuitive and analytical thought

- The third model of decision making is political model, suited for nonprogrammed decisions
when conditions are uncertain, information is limited, and there are manager conflicts
about what goals to pursue or what course of action to take, closely resembles the real
environment in which most managers and decision- makers operate
 Organizations are made up of groups with diverse interests, goals, and values. Managers
disagree with one another

● Information is ambiguous and incomplete..

● Managers can’t identify all dimensions of the problem and process all relevant information.
Managers talk and exchange viewpoints to gather information and reduce ambiguity.

● Managers engage in the push and pull of debate to decide goals and discuss alternatives.

v Without a coalition, powerful groups can derail the decision-making process

v Political model resembles the real environment

+ Coalition is an informal alliance among managers who support a specific goal.

+ Coalition building is the process of forming alliances among managers.

5. DECISION-MAKING STEPS

v Recognition of Decision Requirement – Identify problem or opportunity

v Diagnosis and Analysis – Analyze underlying causal factors
v Develop Alternatives – Define feasible alternatives
v Selection of Desired Alternative – Alternative with most desirable outcome
v Implementation of Chosen Alternative – Use of managerial, administrative, and persuasive
abilities to execute chosen alternative
v Evaluation and Feedback – Gather information about effectiveness. Feedback is the part of
monitoring that assesses whether a new decision needs to be made.

Risk propensity:the willingness to undertake risk with opportunity of gaining an increased payoff

6. PERSONAL DECISION FRAMEWORK

+ Directive style – Managers prefer simple, clear-cut solutions to problems, they are efficient and
rational and prefer to rely on existing rules or procedures for making decisions.
+ Analytic style – Managers prefer complex solutions based on a lot of data, carefully consider
alternatives, search for the best possible decision

+ Conceptual style – Managers consider many broad alternatives, rely on information from both
people and systems, and like to solve problems creatively

+ Behavioral style – Managers with a deep concern for others, concerned with the personal
development of others and may make decisions that help others achieve their goals.

7. WHY DO MANAGERS MAKE BAD DECISIONS?

v Being influenced by initial impressions: managers frequently look at the previous year’s
sales when estimating sales for the coming year
v Justifying past decisions: a manager continues to pour money into a failing project, hoping
to turn things around
v Seeing what you want to see
v Perpetuating the status quo
v Being influenced by emotions
v Overconfidence

8. INNOVATIVE DECISION MAKING

v Start with brainstorming (Brainstorming uses a face-to-face interactive group to

spontaneously suggest as many ideas as possible for solving a problem -> Electronic
brainstorming)
v Use hard evidence
v Engage in rigorous debate (Devil’s advocate: challenging the assumptions and assertions
made by the group. Point-counterpoint: breaks a decision-making group into two subgroups
and assigns them different, often competing, responsibilities)
v Avoid groupthink
v Know when to bail (Escalating commitment: managers and org often continue to invest time
and money in a solution even when there is strong evidence that it is not appropriate)
v Do a postmortem (After-action review: a disciplined procedure whereby managers invest
time in reviewing the results of decisions on a regular basis and learn from them.)

CHAPTER 10:

DESIGNING ADAPTIVE ORGANIZATION

Organizing is the deployment of organizational resources to achieve strategic goals.

1. ORGANIZING THE VERTICAL STRUCTURE:

Organization structure is defined as (1) the set of formal tasks assigned to individuals and
departments; (2) formal reporting relationships, including lines of authority, decision responsibility,
number of hierarchical levels, and span of managers’ control; and (3) the design of systems to
ensure effective coordination of employees across departments

+ Work specialization (division of labor): the degree to which organizational tasks are subdivided
into separate jobs. But with too much specialization, employees are isolated and do only a single,
boring job, creates separation and hinders the coordination

+ Chain of command is an unbroken line of authority that links all employees in an organization and
shows who reports to whom. Unity of command means that each employee is held accountable to
only one supervisor. The scalar principle: a clearly defined line of authority in the organization that
includes all employees.

 Authority is the formal and legitimate right of a manager to make decisions, issue orders,
and allocate resources to achieve organizationally desired outcomes:
v vested in organizational positions, not people.
v flows down the vertical hierarchy.
v accepted by subordinates.
v The acceptance theory of authority argues that a manager has authority only if
subordinates choose to accept his or her commands.
 Accountability: people with authority and responsibility are subject to reporting and
justifying task outcomes to those above them in the chain of command.
 Delegation is the process that managers use to transfer authority and responsibility to
positions below them in the hierarchy
 Line authority means that people in management positions have formal authority to direct
and control immediate subordinates.
 Staff authority(HR, accounting, research, finance, marketing) narrower and includes the
right to advise, recommend, counsel in the staff specialists’ area of expertise

+ Span of management (span of control) is the number of employees reporting to a supervisor, the
trend in recent years.

Less supervision/larger spans of control:

v Work is stable and routine

v Subordinates perform similar work
v Subordinates are in one location
v Highly trained/require little direction
v Rules and procedures are defined
v Few planning or nonsupervisory activities
v Manager’s preference

- Tall structure has an overall narrow span and more hierarchical levels.

- Flat structure has a wide span, is horizontally dispersed, and has fewer hierarchical levels.

- Centralization means that decision authority is located near the top of the organization, especially
during times of crisis or failures

- Decentralization decision authority is pushed downward to lower organization levels

●Greater change and uncertainty in the environment are usually associated with decentralization

 The amount of centralization or decentralization should fit the firm’s strategy

 In times of crisis or risk of company failure, authority may be centralized at the top.

+ Departmentalization: the basis for grouping positions into departments and departments into the
total organization. Managers make choices about how to use the chain of command to group
people together to perform their work. 5 approaches to structural design reflect different uses of
the chain of command in departmentalization

2. TYPES OF STRUCTURE:

+ Functional structure(U-form, Vertical Functional Approach), activities are grouped together by

common function from the bottom to the top of the organization, based on similar skills, expertise,
work activities, and resource use , a way to centralize decision making and provide unified direction
from top managers, the chain of command from each function converges at the top in the hierarchy

+ Divisional structure occurs when departments are grouped together based on similar
organizational outputs, divisions are created as self-contained units, with separate functional
departments for each division, the chain of command from each function converges lower in the
hierarchy, encourage decentralization
 In a geographic-based structure, all functions in a specific country or region report to the
same division manager

+ Matrix approach combines aspects of both functional and divisional structures simultaneously, in
the same part of the organization, improve horizontal coordination and information sharing. One
unique feature of the matrix is that it has dual lines of authority

 Two-boss employees: report to two supervisors simultaneously, must resolve conflicting

demands from the matrix bosses
 The matrix boss is the product or functional boss, who is responsible for one side of the
matrix. The top leader is responsible for the entire matrix.
 The top leader oversees both the product and functional chains of command.

+ Team-based structure, the entire organization is made up of horizontal teams that coordinate
their work and work directly with customers to accomplish the organization’s goals.

+ Virtual network structure means that the firm subcontracts most of its major functions to
separate companies and coordinates their activities from a small organization at headquarters, The
biggest advantages are flexibility and competitiveness on a global scale

3. ORGANIZING FOR HORIZONTAL COORDINATION: works best in an uncertain environment

Coordination: managerial task of adjusting and synchronizing the diverse activities among different
individuals and departments, the outcome of information and cooperation

Collaboration: a joint effort between people from two or more departments to achieve shared
goals and the outcome is greater than working independently
Reengineering refers to the radical redesign of business processes to achieve dramatic
improvements in cost, quality, service, and speed.

Task force: a temporary team or committee designed to solve a problem involving several
departments.

Cross-functional Team: Furthers horizontal coordination by including members across the

organization

Relational coordination: “frequent, timely, problem-solving communication carried out through

[employee] relationships of shared goals, shared knowledge, and mutual respect

Factors affecting org structure

4. STRUCTURE FITS TECHNOLOGY

Types of technologies include manufacturing and service.

• Small-batch production is a type of manufacturing technology that involves the production of

goods in batches of one or a few products designed to customer specifications.

• Mass production is characterized by standardized long production runs to manufacture a large

volume of products with the same specifications

• Continuous process production involves mechanization of the entire workflow and nonstop
production, such as in chemical plants or petroleum refineries.

• Small batch and continuous process technologies are associated with a more flexible horizontal
structure, whereas a tighter vertical structure is appropriate for mass production.

• Manufacturing technologies differ in terms of technical complexity, which refers to the degree to
which complex machinery is involved in the production process to the exclusion of people.

• Service technology is characterized by intangible outputs and direct contact between employees
and customers
CHAPTER 15:

LEADERSHIP

Leadership is the ability to influence people toward the attainment of organizational goals.

1. CONTEMPORARY LEADERSHIP:

Humility means being unpretentious and modest rather than arrogant and prideful.

Servant leader is a leader who serves others by working to fulfill followers’ needs and goals, as well
as to achieve the organization’s larger mission. They give things away—power, ideas, information,
recognition, credit for accomplishments, money and often work in the nonprofit

Authentic leadership: individuals who know and understand themselves, who espouse and act
consistent with higher-order ethical values, and who empower and inspire others with their
openness and authenticity, inspire trust and commitment because they respect diverse viewpoints,
encourage collaboration, and help others learn, grow, and develop as leaders

+ Pursue purpose with passion

+ practice solid values

+ connect with others

+ demonstrate self-discipline

+ lead with both head and heart

Interactive leadership is a leadership style characterized by values such as inclusion, collaboration,

relationship building, and caring. Leader favors a consensual and collaborative process, and
influence derives from relationships rather than position power and formal authority

2. MANAGEMENT – LEADERSHIP

- Good managers must be leaders

- Management promotes stability and order within the existing organizational structure

- Leadership motivates toward vision and change

=> Leadership cannot replace management, there should be a balance of both

3. BEHAVIORAL APPROACHES: Two basic leadership behaviors identified as important for

leadership are task-oriented and people-oriented.
Consideration (people-oriented behavior): the extent to which the leader is mindful of
subordinates, respects their ideas and feelings, and establishes mutual trust

Initiating structure (task-oriented behavior): the extent to which the leader is task-oriented and
directs subordinate work activities toward goal attainment.

Employee-centered leaders (most effective): who established high performance goals and displayed
supportive behavior toward subordinates

Job-centered leaders (ineffective): less concerned with goal achievement and human needs in favor
of meeting schedules, keeping costs low, and achieving production efficiency

The leadership grid (Blake and Mouton) is a two-dimensional leadership model that measures the
leader’s concern for people and concern for production to categorize the leader in one of five
different leadership styles.

4. CONTINGENCY APPROACHES

A contingency approach is a model of leadership that describes the relationship between leadership
styles and specific situations. One contingency approach is the situational model, which links the
leader’s behavioral style with the readiness level of followers.

The situational model of leadership(Hersey and Blanchard): focuses a great deal of attention on the
characteristics of followers in determining appropriate leadership behavior.
Fiedler’s contingency theory: the suitability of a leader’s style is determined by whether the
situation is considered favorable or unfavorable to the leader. The favorability of a leadership
situation can be analyzed with 3 elements: the quality of relationships between leader and
followers, the degree of task structure, the extent to which the leader has formal authority

Task structure: The extent to which tasks performed by the group are defined, involve specific
procedures, and have clear, explicit goals

A task-oriented leader style fits a low-readiness follower and can perform well in both favorable
and unfavorable environment

A relationship-oriented leader style fits a higher-readiness follower and only perform well in
moderate favorable environment

 Difference: Fiedler examined a variety of characteristics, while Hersey and Blanchard focused
solely on the individual.

A substitute for leadership makes the leadership style unnecessary or redundant.

A neutralizer counteracts the leadership style and prevents the leader from displaying certain
behaviors.

5. CHARISMATIC AND TRANSFORMATIONAL LEADERSHIP

Charismatic leader is a leader who has the ability to inspire and motivate people to transcend their
expected performance, even to the point of personal sacrifice, with the art of visionary leadership.

Transformational leader is distinguished by a special ability to bring about innovation and change
by creating an inspiring vision, shaping values, building relationships, providing meaning for
followers, challenging people to look at old problems in new ways, and acting as role models for the
new values and behaviors, focus on both tangible and intangible aspects

Transactional leader clarifies subordinates’ roles and task requirements, initiates structure,
provides rewards, and displays consideration for followers, excel at management functions, stress
the impersonal aspects of performance, commit to the org, conform to norms and values.

6. FOLLOWERSHIP

Alienated follower is a passive, yet independent, critical thinker, don’t participate in developing
solutions to the problems or deficiencies that they see and they waste time complaining about their
boss without offering constructive feedback.

Conformist participates actively in a relationship with the boss but doesn’t use critical-thinking skills
and no consideration of the consequences, avoid conflict. Rigid rules and autocratic environment
create over-independence

Pragmatic survivor has qualities of all four extremes—depending on which style fits with the
prevalent situation, do what’s best for his position and minimize risks, resulted from org going
through desperate times and they do whatever to survive

Passive follower: neither critical, independent thinking nor active participation, resulted from being
under supervision by a micromanaging boss, they learn that initiatives won’t be rewarded

Effective follower is both a critical, independent thinker and active in the organization, develop an
equitable relationship with everyone, don’t avoid risks, capable of self-management
7. POWER AND INFLUENCE

Power is the potential ability to influence the behavior of others

Influence: the effect that a person’s actions have on the others’ attitudes, values, beliefs, behavior

=>Difference: Power is the capacity to cause a change in a person while influence is the degree of
actual change

v Hard position power: stems from a person’s position of authority and includes legitimate,
reward, and coercive power.

+ Legitimate power : Power coming from a formal management position in an organization and
the authority granted to.

+ Reward power: from the authority to bestow rewards on other people, have access to formal
rewards, such as pay increases or promotions and disposal rewards such as praise, attention,
and recognition

+ Coercive power : opposite to reward power,the authority to punish or recommend punishment

v Personal soft power: includes expert power and referent power, which are based on
personal characteristics and interpersonal relationships more than on a position of authority

+ Expert power: Power resulting from a person’s special knowledge or skill regarding the tasks
being performed, others go along with recommendations because of his superior knowledge

+ Referent power: comes from an individual’s personal characteristics that command others’
identification, respect, and admiration so that they wish to emulate that individual, most visible
in the area of charismatic leadership

v Other sources of power:

+ Personal Effort

+ Network of Relationships

+ Information: each manager level has access to the equivalent information

8. SIX INTERPERSONAL INFLUENCE TACTICS FOR LEADERS

+ Rational persuasion

+ Help people like you

+ Rely on the rule of reciprocity

+ Develop allies

+ Be assertive – ask for what you want

+ Make use of higher authority

CHAPTER 16:

MOTIVATING EMPLOYEES

Motivation: the forces either within or external to a person that arouse enthusiasm and persistence
to pursue a certain course of action.

Intrinsic rewards are the satisfactions that a person receives in the process of performing a
particular action.

Extrinsic rewards are given by another person, typically a manager, and include promotions, praise,
and pay increases

1. CONTENT PERSPECTIVES ON MOTIVATION

Content theories emphasize the needs that motivate people.

 Maslow’s hierarchy of needs theory proposes that people are motivated by multiple needs and
that these needs exist in a hierarchical order
 ERG theory: by Alderfer

+ Existence needs: physical well- being

+ Relatedness needs: satisfactory relationships with others

+ Growth needs: the development of human potential and the desire for personal growth and
increased competence

Frustration-regression principle: failure to meet a high-order need may trigger a regression to

an already fulfilled lower-order need

=>The ERG model therefore is less rigid than Maslow’s needs hierarchy: individuals may move
down as well as up the hierarchy, depending on their ability to satisfy needs

 Two-factor theory:
 Acquired needs theory:
 Need for achievement: The desire to accomplish something difficult, attain a high standard of
success, master complex tasks, and surpass others

● Need for affiliation: The desire to form close personal relationships, avoid conflict

● Need for power: The desire to influence or control others, be responsible for others, and have
authority over others

2. PROCESS PERSPECTIVES ON MOTIVATION

Process theories explain how people select behavioral actions to meet their needs and determine
whether their choices were successful. Important perspectives in this area include goal-setting,
equity theory, and expectancy theory.

v - Goal-setting theory: managers can increase motivation and enhance performance by

setting specific, challenging goals, and then helping people track their progress toward goal
achievement by providing timely feedback. Key components of the theory:
v Goal specificity
v Goal difficulty
v Goal acceptance
v Feedback

v - Equity theory focuses on individuals’ perceptions of how fairly they are treated compared
with others. Perceived inequity (the input-to-outcome ratios are out of balance) can be
reduced by:
v Changing work effort
v Changing outcomes
v Changing perception
v Leaving the job

- Expectancy Theory suggests that motivation depends on individuals’ expectations about their
ability to perform tasks and receive desired rewards.

v E → P: determining whether putting effort into a given task will lead to high performance
v P → O: whether successful performance of a task will lead to the desired outcome
v Valence – the value or attraction an individual has for an outcome

3. REINFORCEMENT PERSPECTIVE ON MOTIVATION

Reinforcement theory focuses on employee learning of desired work behaviors

● Positive reinforcement is the administration of a pleasant and rewarding consequence following a

desired behavior, nonfinancial reinforcements are just as effective as financial incentives.
● Avoidance learning (negative reinforcement) is the removal of an unpleasant consequence once
a behavior is improved, motivate the desired behavior.

● Punishment is the imposition of unpleasant outcomes on an employee

● Extinction is the withholding of a positive reward, undesirable behavior is essentially ignored.

Social learning theory: individual’s motivation can result not just from direct experience of rewards
and punishments, but also from the person’s observations of other people’s behavior

Vicarious learning (observational learning): an individual sees others perform certain behaviors
and get rewarded for them

4. JOB DESIGN FOR MOTIVATION

Job design is the application of motivational theories to the structure of work for improving
productivity and satisfaction.

Job rotation: move employees systematically from one job to another to provide variety and
stimulation.

Job enlargement: combine a series of small tasks into one new, broader job so that people perform
a variety of activities

Job enrichment: incorporating high-level motivators into the work, including responsibility,
recognition, and opportunities for growth, learning, and achievement.

Work redesign means altering jobs to increase both the quality of employees’ work experience and
their productivity.

Job characteristics model is a model of job design that considers core job dimensions, individuals’
critical psychological states, and employee growth-need strength.

● Skill variety: the number of diverse activities that compose a job and the number of skills used to
perform it.
● Task identity: the degree to which an employee performs a total job with a recognizable
beginning and ending.

● Task significance: the degree to which the job is perceived as important and having an impact on
the company or consumers.

● Autonomy: the degree to which the worker has freedom, discretion, and self-determination in
planning and carrying out tasks.

● Feedback

5. INNOVATIVE IDEAS FOR MOTIVATING

Variable compensation is a key motivational tool

Empowerment is power sharing, the delegation of power and authority to subordinates.

Empowering employees involves giving them four elements that enable them to act more freely to
accomplish their jobs: information, knowledge, power, and rewards.

+ receive information about company performance

+ have knowledge and skills to contribute to company goals.

+ have the power to make substantive decisions

+ are rewarded based on company performance

Engagement: people enjoy their jobs and are satisfied with their work conditions, contribute
enthusiastically, and feel a sense of belonging and commitment.

• Help employees develop positive relationships with colleagues and supervisors

• Focus on learning, contribution, and growth

Making progress principle: the single most important factor that can boost motivation, positive
emotions, and perceptions during a workday is making progress toward meaningful goals.