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Principles of Management - MGT503

MGT503-Princilpes of Management-Lecture Handout No 01

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HISTORICAL OVERVIEW OF MANAGEMENT

Major objective of treating “Principles of Management” in a concise, interesting, and understandable manner will be to present management history and theory with an emphasis on the future. Most students will be applying the concepts learned here over a period of next many years. Another objective shall be to identify several areas where management concepts are applicable to the personal and professional goalsetting and also to apply the management skills to the challenge of managing the most difficult peer or subordinate – the one that may confront you in the mirror each morning in your professional career.

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MGT503-Princilpes of Management-Lecture Handout No 02

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MANAGEMENT AND MANAGERS

The concepts of organizations, managers, and management are explored in this session. Every organization, regardless of size, type, or location, needs managers who have a variety of characteristics. Managers may come from any nationality or be of either gender.
Four questions are addressed:

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MGT503-Princilpes of Management-Lecture Handout No 03

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MANAGERIAL ROLES IN ORGANIZATIONS

Management Roles:

Managers fulfill a variety of roles. A role is an organized set of behaviors that is associated with a particular office or position.

Dr. Henry Mintzberg, a prominent management researcher, says that what managers do can best be described by looking at the roles they play at work. The term management role refers to specific categories of managerial behavior. There are three types of roles which a manager usually does in any organization.

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MGT503-Princilpes of Management-Lecture Handout No 04

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MANAGERIAL FUNCTIONS I.E. POLCA

POLCA as functions:

Planning

It is the management function that involves the process of defining goals, establishing strategies for achieving those goals. And developing plans to integrate and coordinate activities.

Organizing

It is the management function that involves the process of determining what tasks are to be done. Who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made.

Leading

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MGT503-Princilpes of Management-Lecture Handout No 05

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MANAGERIAL LEVELS AND SKILLS

Level of Managers in an Organization:

Top Managers
Middle Mangers
First-Line Managers
Non-managerial Employees
First-line managers
(or first-line supervisors) are those managers having the least authority and are at the lowest level in the hierarchy of the organization. First-line managers are at the lowest level of management and manage the work of non-managerial individuals who are involved with the production or creation of the organization’s products. They’re often called supervisors but may also be called line managers, office managers, or even foremen. They are directly responsible for the work of operating (nonmanagerial) employees.
a Titles often include the term, “supervisor.”
b Factors changing the jobs of first-line managers include emphasis upon worker participation and teamwork and the use of computers to regulate many activities formerly regulated by first-line managers.
c The jobs of first-line managers are likely to change toward a greater emphasis on dealing with internal human relations.

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MGT503-Princilpes of Management-Lecture Handout No 06

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MANAGEMENT IDEAS: YESTERDAY AND TODAY

The purpose of this lecture is to demonstrate that knowledge of management past history can help you better understand current management theory and practice. Thus, in order to understand the theories and practices used today, it’s important for management students to look at the evolution of management thought and practices. The practice of management has always reflected historical times and societal conditions.

Introduction

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MGT503-Princilpes of Management-Lecture Handout No 07

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CLASSICAL VIEW OF MANAGEMENT (SCIENTIFIC AND BUREAUCRATIC)

Classical Viewpoint is divided into three parts:

1. Scientific management
2. Bureaucratic management
3. Administrative management

1. Scientific Management:

Scientific management is defined as the use of the scientific method to define the “one best way” for a job to be done.

Important Contributions:

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MGT503-Princilpes of Management-Lecture Handout No 08

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ADMINISTRATIVE VIEW OF MANAGEMENT

The Administrative Management

It is a term used for those early-day contributors who developed and taught principles to be used by managers, both individually and collectively, to improve the performance of the overall functions of the organization

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MGT503-Princilpes of Management-Lecture Handout No 09

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BEHAVIORAL THEORIES OF MANAGEMENT

Behavioral Viewpoint:

Organizational behavior (OB) research has contributed much of what we know about behavioral views of management, human resources management, motivation, leadership, trust, teamwork, and conflict management.

Early Advocates:

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MGT503-Princilpes of Management-Lecture Handout No 10

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QUANTITATIVE, CONTEMPORARY AND EMERGING VIEWS OF MANAGEMENT

Quantitative Approach to Management:

The quantitative approach involves the use of quantitative techniques to improve decision making. This approach has also been labeled operations research of management science. It includes applications of statistics, optimization models, information models, and computer simulations.

How Do Today’s Managers use the quantitative approach?

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MGT503-Princilpes of Management-Lecture Handout No 11

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SYSTEM’S VIEW OF MANAGEMENT AND ORGANIZATION

Managing Systems

Another way to look at the manager’s job is from the perspective of managing systems.

System:

A system is a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. It’s a concept taken from the physical sciences and applied to organizations. The two basic types of systems are

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MGT503-Princilpes of Management-Lecture Handout No 12

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ANALYZING ORGANIZATIONAL ENVIRONMENT AND UNDERSTANDING
ORGANIZATIONAL CULTURE

This lecture discusses the components and complexities of an organization’s culture and the external /internal environment and how these may constrain managers. Managers are also responsible for improving stakeholder involvement in decisions making and actions taking. Managers must be aware that organizational culture and organizational environments will influence both the way an organization is managed as well as its effectiveness. How can an understanding of organizational culture and the external environment help the manager? Let us learn.

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MGT503-Princilpes of Management-Lecture Handout No 13

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21
st CENTURY MANAGEMENT TRENDS

Where are we today? What current management concepts and practices are shaping “tomorrow’s history”?
This session establishes first a framework for understanding social responsibility and managerial ethics. Then, in this session, we’ll attempt to answer those above stated questions by introducing several trends and issues that we believe are changing the way managers do their jobs: globalization, entrepreneurship, managing in an e-business world.

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MGT503-Princilpes of Management-Lecture Handout No 14

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UNDERSTANDING GLOBAL ENVIRONMENT WTO AND SAARC

Understanding the Global Environment

Several significant forces are reshaping the global environment that managers face. Two important features of the global environment are regional trading alliances and the World Trade Organization.

A. Regional Trading Alliances.

Regional trading alliances are reshaping global competition. It’s no longer country versus country, but region against region.

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MGT503-Princilpes of Management-Lecture Handout No 15

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DECISION MAKING AND DECISION TAKING

Intelligent computer software is helping managers and other decision makers to be more effective and efficient. Several diverse industries such as energy, health care, transportation, and telecommunications are relying on applied intelligence software to help make decisions by computers that were previously left to humans. Can any thing ever replace the decision-making process utilized by humans? In this session, we’ll look at the decision making process and see that there is nothing that will ever replace the manager’s need to make decisions. Making good decisions is something that every manager strives to do because the overall quality of managerial decisions has a major influence on organizational success or failure.
Decision making is part of all four managerial functions. In performing these functions, managers are often called decision makers.

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MGT503-Princilpes of Management-Lecture Handout No 16

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RATIONAL DECISION MAKING

Managers as Decision Makers:

Although we know about the decision-making process, we still don’t know much about the manager as a decision maker. In this session, we’ll look at how decisions are made, the types of problems and decisions managers face, the conditions under which managers make decisions, and decision-making styles.

The nature of managerial decision making:

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MGT503-Princilpes of Management-Lecture Handout No 17

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NATURE AND TYPES OF MANAGERIAL DECISIONS

Nature of Managerial Decision-making:

Decision making is the act of choosing one alternative from among a set of alternatives. There are two types of decisions.

Programmed decisions are those made in routine, repetitive, well-structured situations through the use of predetermined decision rules.

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MGT503-Princilpes of Management-Lecture Handout No 18

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NON RATIONAL DECISION MAKING

Non Rational Model:

The non-rational models of managerial decision making suggests that information-gathering and processing limitations make it difficult for managers to make optimal decisions.

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MGT503-Princilpes of Management-Lecture Handout No 19

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GROUP DECISION MAKING AND CREATIVITY

The Creativity Factor in Decision Making

Innovation and creativity is important to organizational success in the marketplace.

Creativity versus Innovation

There is a difference between creativity and innovation.

  1. Creativity is the ability to combine ideas in a unique way or to make unusual associations between ideas.
  2. Read more: MGT503-Princilpes of Management-Lecture Handout No 19

MGT503-Princilpes of Management-Lecture Handout No 20

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PLANNING AND DECISION AIDS-I

This session and the one follows shall introduce the planning tools and techniques that managers have at their disposal to assist them in performing the management functions. Management Science or Operation Research is a management perspective aimed at increased decision effectiveness by use of sophisticated mathematical models and statistical methods.

TECHNIQUES FOR ASSESSING THE ENVIRONMENT

Several techniques have been developed to assist managers in assessing the organization’s environment.

Environmental Scanning

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MGT503-Princilpes of Management-Lecture Handout No 21

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PLANNING AND DECISION AIDS-II

1. TECHNIQUES FOR ALLOCATING RESOURCES.

Resources are the assets of the organization and include financial, physical, human, intangible, and structural.

Budgeting

A budget is a numerical plan for allocating resources to specific activities. Budgets are popular because they’re applicable to a wide variety of organizations and units within an organization.

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MGT503-Princilpes of Management-Lecture Handout No 22

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PLANNING: FUNCTIONS & BENEFITS

WHAT IS PLANNING?

Planning involves defining the organization’s goals, establishing an overall strategy for achieving these goals, and developing a comprehensive set of plans to integrate and coordinate organizational work. The term planning as used in this chapter refers to formal planning. The quality of the planning process and appropriate implementation probably contribute more to high performance than does the extent of planning.

WHY DO MANAGERS PLAN?

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MGT503-Princilpes of Management-Lecture Handout No 23

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PLANNING PROCESS AND GOAL LEVELS

The overall planning process

A. Planning is a two-part function—setting goals and determining how to try to achieve the goals.
1. A goal (often used interchangeably with “objective”) is a future target or end result that an organization wishes to achieve.
2. A plan is the means devised for attempting to reach a goal.

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MGT503-Princilpes of Management-Lecture Handout No 24

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MANAGEMENT BY OBJECTIVE (MBO)

Time Span of Goals and Plans

  1. Strategic goals and plans generally involve time periods of 3-5 years.
  2. Tactical goals and plans typically involve time periods of 1 to 3 years.
  3. Operational goals and plans can be for as short a period as 1 week or as long as 1 year.

Characteristics of Well-Designed Goals

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MGT503-Princilpes of Management-Lecture Handout No 25

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STRATEGIC MANAGEMENT -I

INTRODUCTION

Today’s business news is filled with reports of organizations making changes in their strategies for whatever reasons. An underlying theme of discussing strategic management is that good strategies can lead to high organizational performance.

THE IMPORTANCE OF STRATEGIC MANAGEMENT

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MGT503-Princilpes of Management-Lecture Handout No 26

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STRATEGIC MANAGEMENT - II

THE STRATEGIC MANAGEMENT PROCESS

The strategic management process is an eight-step process that encompasses strategic planning, implementation, and evaluation.

  • The first step is identifying the organization’s current mission, objectives, and strategies.
    1. Every organization needs a mission, which defines the purpose of the organization. What is the organization’s reason for being in business?
    2. It’s also important to identify the organization’s current objectives and strategies, as well.
  • Read more: MGT503-Princilpes of Management-Lecture Handout No 26

MGT503-Princilpes of Management-Lecture Handout No 27

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LEVELS OF STRATEGIES, PORTER’S MODEL AND STRATEGY DEVELOPMENT (BCG)
AND IMPLEMENTATION

Level of Strategies

Many organizations develop strategies at three different levels. These three different and distinct levels of strategy are corporate, business, and functional:

Corporate-level strategy is developed by top-level management and the board of directors. The corporate-level strategy seeks to determine what businesses a corporation should be in or wants to be in. Two popular approaches for answering the question of what business(es) should we be in are the grand strategies framework and the corporate portfolio matrix.

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MGT503-Princilpes of Management-Lecture Handout No 28

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ENTREPRENEURSHIP MANAGEMENT

What Is Entrepreneurship?

  1. Entrepreneurship—the process where individuals or a group of individuals risk time and money in pursuit of opportunities to create value and grow through innovation regardless of the resources they currently control.
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MGT503-Princilpes of Management-Lecture Handout No 29

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ORGANIZING

Organizations are experimenting with different approaches to organizational structure and design. Organizational structure can play an important role in an organization’s success. The process of ORGANIZING—the second management functions—is how an organization’s structure is created.

The Nature of Organization Structure

Managers are seeking structural designs that will best support and allow employees to effectively and efficiently do their work. Organizing is the process of creating an organization’s structure.

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MGT503-Princilpes of Management-Lecture Handout No 30

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JOB DESIGN/SPECIALIZATION AND DEPARTMENTALIZATION

Building Blocks of Organizing

1. Job design

A. Job design is an essential part of organizational structure.

  1. Job design is the specification of task activities, usually repeated on a regular basis, associated with each particular job.
    a. Task activities need to be grouped in reasonably logical ways for each job.
    b. The way the jobs are configured influences employee motivation.
  2. Work specialization is the degree to which the work necessary to achieve organizational goals is broken down into various jobs.

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MGT503-Princilpes of Management-Lecture Handout No 31

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SPAN OF COMMAND, CENTRALIZATION VS. DE-CENTRALIZATION AND LINE VS.
STAFF AUTHORITY

Methods of Vertical Coordination

Vertical coordination is the linking of activities at the top of the organization with those at the middle and lower levels in order to achieve organizational goals.

Formalization is the degree to which written policies, rules, procedures, job descriptions, and other documents specify what actions are (or are not) to be taken under a given set of circumstances.

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MGT503-Princilpes of Management-Lecture Handout No 32

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ORGANIZATIONAL DESIGN AND ORGANIC VS. MECHANISTIC VS. VIRTUAL
STRUCTURES

1. Job rotation is the practice of periodically shifting workers through a set of jobs in a planned sequence.

MGT503-Princilpes of Management-Lecture Handout No 33

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LEADING AND LEADERSHIP MOTIVATING SELF AND OTHERS

The Nature of Motivation

Being able to effectively motivate employees is a challenge that managers face in all types and sizes of organizations. “Everything that we give to our workers gets returned to us in terms of efficiency, quality, loyalty, and innovation.”

Motivation is the willingness to exert high levels of effort to reach organizational goals, conditioned by the effort’s ability to satisfy some individual need.

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MGT503-Princilpes of Management-Lecture Handout No 34

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MASLOW’S NEEDS THEORY AND ITS ANALYSIS

Maslow’s Need Theory

One of the most widely mentioned theories of motivation is the hierarchy of need theory put forth by Abraham Maslow, one of the most widely known theories of motivation. Maslow saw human needs in the form of hierarchy ascending from the lowest to the highest and concluded that, when one set of need is satisfied this kind of need ceases to be a motivator.

1 Maslow’s hierarchy of needs from the most basic to the highest.

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MGT503-Princilpes of Management-Lecture Handout No 35

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OTHER NEED AND COGNITIVE THEORIES OF MOTIVATION

McGregor’s Theory X and Theory Y

This theory was developed by Douglas McGregor and describes two distinct views of human nature.

  1. Theory X was the assumption that employees dislike work, are lazy, seek to avoid responsibility, and must be coerced to perform.
  2. Theory Y was the assumption that employees are creative, seek responsibility, and can exercise self-direction.
  3. Read more: MGT503-Princilpes of Management-Lecture Handout No 35

MGT503-Princilpes of Management-Lecture Handout No 36

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EXPECTANCY, GOAL SETTING AND RE-ENFORCEMENT THEORIES

Expectancy Theory

Expectancy Theory is the theory that an individual tends to act in a certain way based on the expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. Three relationships are important to this theory.

  1. Effort-performance linkage (expectancy) is the probability perceived by the individual that exerting a given amount of effort will lead to a certain level of performance.
  2. Performance-reward linkage (instrumentality) is the degree to which an individual believes that performing at a particular level is instrumental in, or will lead to, the attainment of a desired outcome.
  3. Read more: MGT503-Princilpes of Management-Lecture Handout No 36

MGT503-Princilpes of Management-Lecture Handout No 37

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MOTIVATING KNOWLEDGE PROFESSIONALS LEADERSHIP TRAIT THEORIES

Motivating the “New Workforce i.e. Knowledge Professionals”

Another current motivation issue revolves around motivating the “new workforce.” These special groups present unique motivational challenges to managers. These professionals possess specialty knowledge of markets, of customers, of supplier, of software, of hardware, of technology and are very important to run the organizations smoothly in 21st century.

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MGT503-Princilpes of Management-Lecture Handout No 38

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BEHAVIORAL AND SITUATIONAL MODELS OF LEADERSHIP

Identifying Leader Behaviors

A number of researchers have focused on the question of whether specific behaviors, rather than traits, make some leaders more effective than others.

  1. If behavior studies turned up critical behavioral determinants of leadership, people could be trained to be leaders.
  2. Read more: MGT503-Princilpes of Management-Lecture Handout No 38

MGT503-Princilpes of Management-Lecture Handout No 39

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STRATEGIC LEADERSHIP MODELS

CUTTING-EDGE APPROACHES TO STRATEGIC LEADERSHIP

The most current approaches to looking at leadership are discussed.

The research we’ve discussed has described transactional leader. What is the difference between transactional and transformational leaders?

  1. Transactional leaders are leaders who guide or motivate their followers in the direction of established goals by clarifying role and task requirements.
  2. Transformational leaders are leaders who provide individualized consideration and intellectual stimulation and possess charisma.
  3. Read more: MGT503-Princilpes of Management-Lecture Handout No 39

MGT503-Princilpes of Management-Lecture Handout No 40

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UNDERSTANDING GROUP DYNAMICS IN ORGANIZATIONS

INTRODUCTION

Work groups are a common arrangement within today’s business organizations. Work is being restructured around groups of all kinds and in all sizes of organizations. Managers need an understanding of group behavior and the concept of teams in order to appreciate what groups can and cannot do within organizations and how groups function.

Any one member in group can influence the behavior of the individuals in the group and teamwork. We will examine some basic characteristics of groups including the types of work groups, the development of informal groups, and the manner in which groups operate.

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MGT503-Princilpes of Management-Lecture Handout No 41

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GROUP CONCEPTS, STAGES OF GROUP DEVELOPMENT AND TEAM EFFECTIVENESS

Work Group Inputs

A. Work group inputs are those that are necessary for the group to operate.

B. The composition of a work group has a strong bearing on the group’s ultimate success, so careful consideration should be made in making group assignments.

  1. Characteristics of members that influence group effectiveness include task-relevant expertise, interpersonal skills, and diversity in the makeup of the group to include sufficient individual skills and interest.
  2. Read more: MGT503-Princilpes of Management-Lecture Handout No 41

MGT503-Princilpes of Management-Lecture Handout No 42

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UNDERSTANDING MANAGERIAL COMMUNICATION

INTRODUCTION

Communication between managers and employees provides the information necessary to get work done effectively and efficiently in organizations. In this and following lecture, basic concepts in managerial communications will be presented including: the interpersonal communication process, methods of communicating, barriers to effective communications and ways to overcome these barriers, communication flow and communication networks, and contemporary issues and challenges associated with electronic communications and information technology.

The Nature of Managerial Communication

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MGT503-Princilpes of Management-Lecture Handout No 43

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COMMUNICATION NETWORKS AND CHANNELS EFFECT OF ICT ON MANAGERIAL
COMMUNICATION

As organizational workforces become more and more diverse and widespread throughout the world, communication issues increase in importance.

Organizational communication network

It is the pattern of information flow among task group members.

Five major network structures have been identified.

  1. 1. The three centralized networks are structured so that most messages must flow through a pivotal person in the network.
    a. In the wheel network, all messages must flow through the individual at the center of the wheel.
    b. In the chain network, some members can communicate with more than one member of the network, but the individual in the center of the chain still tends to control the messages.
    c. In the Y network, the member at the fork of the “Y” usually becomes the central person in the network.
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MGT503-Princilpes of Management-Lecture Handout No 44

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CONTROLLING AS A MANAGEMENT FUNCTION

Introduction and Overview of Controlling

Regardless of the thoroughness of the planning done, a program or decision still may be poorly or improperly implemented without a satisfactory control system in place.

Controlling is that process of regulating organizational activities so that actual performance conforms to expected organizational goals and standards. While interrelated with all of the other management functions, a special relationship exists between the planning function of management and controlling. Planning, essentially, is the deciding of goals and objectives and the means of reaching them. Controlling lets manager tell if the organization is on track for goal achievement, and if not, why not. A well-developed plan should provide benchmarks that can be used in the control process.

Read more: MGT503-Princilpes of Management-Lecture Handout No 44

MGT503-Princilpes of Management-Lecture Handout No 45

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CONTROLLING ORGANIZATIONAL PERFORMANCE THROUGH PRODUCTIVITY AND QUALITY

Types of Controls

A. Controls can be classified according to their timing or place in the productive cycle.

  1. Feed forward control focuses on the regulation of inputs to ensure that they meet the standards necessary for the transformation process.
    a. The emphasis is upon preventing problems.
    b. Other names for feed forward control are “preliminary control,” “pre-control,” “preventative control” and “steering control.”
  2. Read more: MGT503-Princilpes of Management-Lecture Handout No 45