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PDM MBA 1
Management Concepts & Applications
MBA-101
Sessio(2012)
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syllabus
External Marks: 80
Internal Marks: 20
Time: 3 hrs.
MANAGEMENT CONCEPTS AND APPLICATIONS
Paper Code: MBA101
COURSE OBJECTIVE:
The objective of this course is to expose the students to basic concepts of management and to
enable them to gain appreciation for emerging ideas, techniques, procedures and practices in
the field of management.
Unit-I
Introduction: concept and nature of management; managerial competenciescommunication,
team work, planning and administrative, strategic and global competencies; evolution ofmanagement thoughtstraditional, behavioural , system, contingency and quality viewpoints
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Contd..
Unit-II
Planning, decision making and organizing: nature and elements of planning, planning
types and models, planning in learning organizations; strategic planningan
overview; decision making process, models of decision-making, increasing
participation in decision-making, decision-making creativity; basic issues in
organizingwork specialization, chain of common delegation, decentralization,span of management, bases for departmentation
Unit-III
Leading: recognition of human factor, motivation models/approaches; leadership
styles/behaviours, personal characteristics of effective leaders, leadership
development; leadership for learning organizations
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Contd..
Unit-IV
Management control, managerial ethics and social responsibility: management control
concept and process, overview of control techniques, effective control system;
managerial ethics, factors affecting ethical choices; ethical dilemma; social
responsibility; evaluating corporate social performance; managing company ethics
and social responsibilityNote:
1. Instructions for External Examiner: The question paper shall be divided in two sections.
Section A shall comprise of eight short answer type questions from whole of the syllabus
carrying two marks each, which shall be compulsory. Answer to each question should not exceed
50 words normally.
2. Section B shall comprise 8 questions (2 questions from each unit). The students will be
required to attempt four questions selecting one question from each unit.
3. All questions will carry equal marks.
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INTRODUCTION:CONCEPT &NATURE OF MANAGEMENT
UNIT-1
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Management :Meaning
& Nature
Management involves coordinating and
overseeing the work activities of others so that
their activities are completed efficiently and
effectively.
It is a multipurpose organ that manages
business & manages managers & manages
worker & work.
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What Is Management?
Managerial Concerns
Efficiency
Doing things right
Getting the mostoutput for the least
inputs
Effectiveness
Doing the rightthings
Attaining
organizational goals
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Effectiveness and
Efficiency in
Management
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IS management an art or
science ?
ART: Because it depends on the skills,
aptitude & creativity of the manager
SCIENCE: Because there is considerable
knowledge in the field of management with
basic principles for guidance of basic
activities.
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What Managers Do?
Skills Managers Need
Technical skills
Knowledge and proficiency in a specific field
Human skills
The ability to work well with other people
Conceptual skills
The ability to think and conceptualize about abstract andcomplex situations concerning the organization
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Skills Needed at Different
Management Levels
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The Management
process..
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Planning
Organizing
Coordinating
Staffing
Directing
Controlling
Evaluating
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Evolution of
Management Thought
Ancient Management
Egypt (pyramids) and China (Great Wall)
Venetians (floating warship assembly lines)
Adam Smith Published The Wealth of Nations in 1776
Advocated the division of labor (job specialization) to
increase the productivity of workers
Industrial Revolution Substituted machine power for human labor
Created large organizations in need of management
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Major Approaches to
Management
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Major Approaches to
Management
Classical
Quantitative
Behavioral Contemporary
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Scientific Management
Fredrick Winslow Taylor
The father of scientific management
Published Principles of Scientific Management(1911)
The theory of scientific management
Using scientific methods to define the one best way for a job
to be done:
Putting the right person on the job with the correct tools
and equipment.
Having a standardized method of doing the job.
Providing an economic incentive to the worker.
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Taylors Scientific
Management Principles
1. Develop a science for each element of an individuals
work, which will replace the old rule-of-thumb method.
2. Scientifically select and then train, teach, and develop
the worker.3. Heartily cooperate with the workers so as to ensure that
all work is done in accordance with the principles of the
science that has been developed.
4. Divide work and responsibility almost equally betweenmanagement and workers. Management takes over all
work for which it is better fitted than the workers.
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General Administrative
Theory
Henri Fayol
Believed that the practice of management was distinct from
other organizational functions
Developed principles of management that applied to allorganizational situations
Max Weber
Developed a theory of authority based on an ideal type of
organization (bureaucracy) Emphasized rationality, predictability, impersonality,
technical competence, and authoritarianism
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Scientific Management
(contd)
Frank and Lillian Gilbreth
Focused on increasing worker productivity through the
reduction of wasted motion
Developed the microchronometer to time worker motionsand optimize work performance
How Do Todays Managers Use Scientific Management?
Use time and motion studies to increase productivity
Hire the best qualified employees Design incentive systems based on output
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23 Fayols 14 Principles of
Management
1. Division of work
2. Authority
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of
individual interests tothe general interest
7. Remuneration
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability of tenure of
personnel
13. Initiative
14. Esprit de corps
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Webers Bureaucracy
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Quantitative Approach to
Management
Quantitative Approach
Also called operations research or management science
Evolved from mathematical and statistical methods
developed to solve WWII military logistics and qualitycontrol problems
Focuses on improving managerial decision making by
applying:
Statistics, optimization models, information models, andcomputer simulations
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What Is Quality
Management?
Intense focus on the customer
Concern for continual improvement
Process-focused Improvement in the quality of everything
Accurate measurement
Empowerment of employees
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Understanding
Organizational Behavior
Organizational Behavior (OB)
The study of the actions of people at work; people
are the most important asset of an organization
Early OB Advocates
Robert Owen
Hugo Munsterberg
Mary Parker Follett
Chester Barnard
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The Hawthorne Studies
A series of productivity experiments conducted at Western Electric
from 1924 to 1932.
Experimental findings
Productivity unexpectedly increased under imposed adverseworking conditions.
The effect of incentive plans was less than expected.
Research conclusion
Social norms, group standards and attitudes more strongly
influence individual output and work behavior than do monetary
incentives.
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The Systems Approach
System Defined
A set of interrelated and interdependent parts arranged in a
manner that produces a unified whole.
Basic Types of Systems Closed systems
Are not influenced by and do not interact with their
environment (all system input and output is internal).
Open systems Dynamically interact to their environments by taking in
inputs and transforming them into outputs that are
distributed into their environments.
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The Organization as an Open
System
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Implications of the
Systems Approach
Coordination of the organizations parts is essential
for proper functioning of the entire organization.
Decisions and actions taken in one area of the
organization will have an effect in other areas of theorganization.
Organizations are not self-contained and, therefore,
must adapt to changes in their external environment
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The Contingency
Approach
Contingency Approach Defined
Also sometimes called the situational approach.
There is no one universally applicable set ofmanagement principles (rules) by which to manage
organizations.
Organizations are individually different, facedifferent situations (contingency variables), and
require different ways of managing.
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Popular Contingency
Variables
Organization size
As size increases, so do the problems of coordination.
Routineness of task technology
Routine technologies require organizational structures,
leadership styles, and control systems that differ from thoserequired by customized or non-routine technologies.
Environmental uncertainty
What works best in a stable and predictable environmentmay be totally inappropriate in a rapidly changing and
unpredictable environment.
Individual differences
Individuals differ in terms of their desire for growth,autonomy, tolerance of ambiguity, and expectations.
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PLANNING,DECISIONMAKING & ORGANISING
Unit-2
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Planning
Planning
A primary managerial activity that involves:
Defining the organizations goals
Establishing an overall strategy for achieving thosegoals
Developing plans for organizational work activities
Formal planning Specific goals covering a specific time period
Written and shared with organizational members
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Why Do Managers Plan?
Purposes of Planning
Provides direction
Reduces uncertainty
Minimizes waste and redundancy
Sets the standards for controlling
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Planning and
Performance
The Relationship Between Planning and Performance
Formal planning is associated with:
Higher profits and returns on assets.
Positive financial results. The quality of planning and implementation affects
performance more than the extent of planning.
The external environment can reduce the impact of
planning on performance.
Formal planning must be used for several years before
planning begins to affect performance.
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How Do Managers Plan?
Elements of Planning
Goals (also Objectives)
Desired outcomes for individuals, groups, or entire
organizations Provide direction and evaluation performance criteria
Plans
Documents that outline how goals are to beaccomplished
Describe how resources are to be allocated and establish
activity schedules
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Types of Goals
Financial Goals
Are related to the expected internal financial performance
of the organization.
Strategic Goals
Are related to the performance of the firm relative to
factors in its external environment (e.g., competitors).
Stated Goals versus Real Goals
Broadly-worded official statements of the organization(intended for public consumption) that may be irrelevant to
its real goals (what actually goes on in the organization).
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Types of Plans
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Types of Plans
Strategic Plans
Apply to the entire organization.
Establish the organizations overall goals.
Seek to position the organization in terms of itsenvironment.
Cover extended periods of time.
Operational Plans
Specify the details of how the overall goals are to be
achieved.
Cover a short time period.
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Types of Plans
Long-Term Plans
Plans with time frames extending beyond three years
Short-Term Plans
Plans with time frames of one year or less
Specific Plans Plans that are clearly defined and leave no room for interpretation
Directional Plans
Flexible plans that set out general guidelines and provide focus, yet
allow discretion in implementation
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Types of Plans
Single-Use Plan
A one-time plan specifically designed to meet the
need of a unique situation.
Standing Plans
Ongoing plans that provide guidance for activities
performed repeatedly.
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The Downside of
Traditional Goal Setting
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Setting Goals and
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Setting Goals andDeveloping Plans
Maintaining the Hierarchy of Goals
MeansEnds Chain
The integrated network of goals that results from
establishing a clearly-defined hierarchy oforganizational goals.
Achievement of lower-level goals is the means by
which to reach higher-level goals (ends).
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Contd.
Management By Objectives (MBO)
Specific performance goals are jointly determined by
employees and managers.
Progress toward accomplishing goals is periodically
reviewed.
Rewards are allocated on the basis of progress towards the
goals.
Key elements of MBO:
Goal specificity, participative decision making, an
explicit performance/evaluation period, feedback
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Steps in a Typical MBO
Program
1. The organizationsoverall objectives and strategies are formulated.
2. Major objectives are allocated amongdivisional and departmental units.
3. Unit managerscollaboratively set specific objectives for their units with their
managers.
4. Specific objectives are collaboratively set withall department members.5. Action plans, defining how objectives are to be achieved, are specified and
agreed upon by managers and employees.
6. The action plans are implemented.
7. Progress toward objectives isperiodically reviewed, andfeedback is provided.
8. Successful achievement of objectives is reinforced byperformance-basedrewards.
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Does MBO Work?
Reason for MBO Success
Top management commitment and involvement
Potential Problems with MBO Programs
Not as effective in dynamic environments that requireconstant resetting of goals.
Overemphasis on individual accomplishment may create
problems with teamwork.
Allowing the MBO program to become an annual
paperwork shuffle.
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Developing Plans
Contingency Factors in a Managers Planning
Managers level in the organization
Strategic plans at higher levels
Operational plans at lower levels
Degree of environmental uncertainty
Stable environment: specific plans
Dynamic environment: specific but flexible plans
Length of future commitments Commitment Concept: current plans affecting future
commitments must be sufficiently long-term to meet those
commitments.
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Planning in the Hierarchy ofOrganizations
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Decision Making
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Decision Making
Decision
Making a choice from two or more alternatives.
The Decision-Making Process
Identifying a problem and decision criteria and allocatingweights to the criteria.
Developing, analyzing, and selecting an alternative that can
resolve the problem.
Implementing the selected alternative.
Evaluating the decisions effectiveness.
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The Decision-Making
Process
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Step 1: Identifying the
Problem
Problem
A discrepancy between an existing and desired state of
affairs.
Characteristics of Problems
A problem becomes a problem when a manager becomes
aware of it.
There is pressure to solve the problem.
The manager must have the authority, information, or
resources needed to solve the problem
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Step 2: Identifying
Decision Criteria
Decision criteria are factors that are important
(relevant) to resolving the problem such as:
Costs that will be incurred (investments required)
Risks likely to be encountered (chance of failure)
Outcomes that are desired (growth of the firm)
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Step 3: Allocating Weights
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p g g
to the Criteria
Decision criteria are not of equal importance:
Assigning a weight to each item places the
items in the correct priority order of their
importance in the decision-making process.
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Step 4: Developing
Alternatives
Identifying viable alternatives
Alternatives are listed (without evaluation)
that can resolve the problem.
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Step 5: Analyzing
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p y gAlternatives
Appraising each alternatives strengths and
weaknesses
An alternatives appraisal is based on its
ability to resolve the issues identified insteps 2 and 3.
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Step 6 & 7
Choosing the best alternative
The alternative with the highest total weight is
chosen.
Putting the chosen alternative into action.Conveying the decision to and gaining commitment from
those who will carry out the decision.
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Step 8: Evaluating the
Decisions Effectiveness
The soundness of the decision is judged by its
outcomes.
How effectively was the problem resolved by
outcomes resulting from the chosen alternatives?
If the problem was not resolved, what went
wrong?
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Decisions in the ManagementFunctions
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Making Decisions
Rationality
Managers make consistent, value-maximizing choices with specified
constraints.
Assumptions are that decision makers:
Are perfectly rational, fully objective, and logical.
Have carefully defined the problem and identified all viable
alternatives.
Have a clear and specific goal
Will select the alternative that maximizes outcomes in theorganizations interests rather than in their personal interests.
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Contd.
Bounded Rationality
Managers make decisions rationally, but are limited (bounded) by theirability to process information.
Assumptions are that decision makers:
Will not seek out or have knowledge of all alternatives
Willsatisficechoose the first alternative encountered thatsatisfactorily solves the problemrather than maximize theoutcome of their decision by considering all alternatives andchoosing the best.
Influence on decision making
Escalation of commitment: an increased commitment to a previousdecision despite evidence that it may have been wrong.
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Types of Problems and
Decisions
Structured Problems
Involve goals that are clear.
Are familiar (have occurred before).
Are easily and completely definedinformation about the
problem is available and complete.
Programmed Decision
A repetitive decision that can be handled by a routineapproach.
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Types of Programmed
Decisions
Procedure
A series of interrelated steps that a manager can use to
respond (applying a policy) to a structured problem.
Rule An explicit statement that limits what a manager or
employee can or cannot do.
Policy
A general guideline for making a decision about a
structured problem.
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Polic Proced re and
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Policy, Procedure, and
Rule Examples
Policy
Accept all customer-returned merchandise.
Procedure
Follow all steps for completing merchandise return
documentation.
Rules
Managers must approve all refunds over $50.00.
No credit purchases are refunded for cash.
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Contd.
Unstructured Problems
Problems that are new or unusual and for which
information is ambiguous or incomplete.
Problems that will require custom-made solutions.
Nonprogrammed Decisions
Decisions that are unique and nonrecurring.
Decisions that generate unique responses.
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Characteristics of an Effective
Decision-Making Process
It focuses on what is important.
It is logical and consistent.
It acknowledges both subjective and objective thinking and
blends analytical with intuitive thinking. It requires only as much information and analysis as is
necessary to resolve a particular dilemma.
It encourages and guides the gathering of relevant information
and informed opinion.
It is straightforward, reliable, easy to use, and flexible.
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Basic Issues in
Organising
Work specialization Departmentalization
Chain of command
Span of control
Centralization anddecentralization
Formalization
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Designing
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Designing
Organizational Structure
Organizing Arranging and structuring work to accomplish an organizations goals.
Organizational Structure
The formal arrangement of jobs within an organization.
Organizational Design A process involving decisions about six key elements:
Work specialization
Departmentalization
Chain of command
Span of control Centralization and decentralization
Formalization
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Purposes of Organizing
Divides work to be done into specific jobs and departments.
Assigns tasks and responsibilities associated with individual
jobs.
Coordinates diverse organizational tasks. Clusters jobs into units.
Establishes relationships among individuals, groups, and
departments.
Establishes formal lines of authority.
Allocates and deploys organizational resources
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Organizational Structure
Work Specialization
The degree to which tasks in the organization are
divided into separate jobs with each step
completed by a different person.Overspecialization can result in human
diseconomies from boredom, fatigue, stress, poor
quality, increased absenteeism, and higher
turnover.
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Departmentalization by
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Departmentalization by
Type
Functional
Grouping jobs by functions
performed
Product
Grouping jobs by productline
Geographical
Grouping jobs on the basis
of territory or geography
Process
Grouping jobs on the basis
of product or customer flow
Customer
Grouping jobs by type ofcustomer and needs
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The Five Common Forms of
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The Five Common Forms of
Departmentalization
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(contd) Geographical
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(cont d) Geographical
Departmentalization
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(contd) Product
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(cont d) Product
Departmentalization
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(contd) Process
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(cont d) Process
Departmentalization
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(contd) Customer
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(cont d) Customer
Departmentalization
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+ Customers needs and problems can
be met by specialists
- Duplication of functions
- Limited view of organizational goals
Organizational Structure
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Organizational Structure
(contd)
Chain of Command
The continuous line of authority that extends from
upper levels of an organization to the lowest levels
of the organization and clarifies who reports towhom.
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Contd.
Authority
The rights inherent in a managerial position to tell
people what to do and to expect them to do it.
ResponsibilityThe obligation or expectation to perform.
Unity of Command
The concept that a person should have one bossand should report only to that person.
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Contd.
Span of Control The number of employees who can be effectively and efficiently
supervised by a manager.
Width of span is affected by:
Skills and abilities of the manager
Employee characteristics
Characteristics of the work being done
Similarity of tasks
Complexity of tasks
Physical proximity of subordinates
Standardization of tasks
Sophistication of the organizations information system
Strength of the organizations culture
Preferred style of the managerPDM MBA 79
Contrasting Spans of
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Contrasting Spans of
Control
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Organizational Structure
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Organizational Structure
(contd)
Centralization
The degree to which decision making is concentrated at upper levels in
the organization.
Organizations in which top managers make all the decisions and
lower-level employees simply carry out those orders.
Decentralization
Organizations in which decision making is pushed down to the
managers who are closest to the action.
Employee Empowerment
Increasing the decision-making authority (power) of employees.
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Factors that Influence the Amount of
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Factors that Influence the Amount of
Centralization and Decentralization
More Centralization Environment is stable.
Lower-level managers are not as capable or experienced at making
decisions as upper-level managers.
Lower-level managers do not want to have a say in decisions.
Decisions are relatively minor.
Organization is facing a crisis or the risk of company failure.
Company is large.
Effective implementation of company strategies depends on managers
retaining say over what happens.
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Contd.
More Decentralization Environment is complex, uncertain.
Lower-level managers are capable and experienced at making decisions.
Lower-level managers want a voice in decisions.
Decisions are significant.
Corporate culture is open to allowing managers to have a say in what
happens.
Company is geographically dispersed.
Effective implementation of company strategies depends on managers
having involvement and flexibility to make decisions.
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Contd.
Formalization
The degree to which jobs within the organization
are standardized and the extent to which employee
behavior is guided by rules and procedures. Highly formalized jobs offer little discretion over what
is to be done.
Low formalization means fewer constraints on how
employees do their work.
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Mechanistic Versus Organic Organization
High specialization
Rigiddepartmentalization
Clear chain of command
Narrow spans of control
Centralization
High formalization
Cross-functional teams
Cross-hierarchical teams Free flow of information
Wide spans of control
Decentralization Low formalization
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Common Organizational
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Common Organizational
Designs
Traditional Designs Simple structure
Low departmentalization, wide spans of control, centralized
authority, little formalization
Functional structure
Departmentalization by function
Operations, finance, marketing, human resources, and product
research and development
Divisional structure
Composed of separate business units or divisions with limitedautonomy under the coordination and control the parent
corporation.
PDM MBA 86
Strengths and Weaknesses of
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Traditional
Organizational Designs
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Organizational Designs
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O ga at o a es g s
(contd)
Contemporary Organizational Designs
Team structures
The entire organization is made up of work groups or self-managed
teams of empowered employees.
Matrix and project structures
Specialists from different functional departments are assigned to
work on projects led by project managers.
Matrix and project participants have two managers.
In project structures, employees work continuously on projects;moving on to another project as each project is completed.
PDM MBA 88
C d
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Contd.
Contemporary Organizational Designs (contd)
Boundaryless Organization
An flexible and unstructured organizational design that is intended
to break down external barriers between the organization and its
customers and suppliers.
Removes internal (horizontal) boundaries:
Eliminates the chain of command
Has limitless spans of control
Uses empowered teams rather than departments Eliminates external boundaries:
Uses virtual, network, and modular organizational structures to
get closer to stakeholders.
PDM MBA 89
Removing External
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g
Boundaries
Virtual Organization
An organization that consists of a small core of full-time employees
and that temporarily hires specialists to work on opportunities that
arise.
Network Organization A small core organization that outsources its major business
functions (e.g., manufacturing) in order to concentrate on what it
does best.
Modular Organization A manufacturing organization that uses outside suppliers to
provide product components for its final assembly operations.
PDM MBA 90
Todays Organizational
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y g
Design Challenges
Keeping Employees Connected
Widely dispersed and mobile employees
Building a Learning Organization
Managing Global Structural Issues
Cultural implications of design elements
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Organizational Designs
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g g
(contd)
The Learning Organization
An organization that has developed the capacity to continuously learn,
adapt, and change through the practice of knowledge management by
employees.
Characteristics of a learning organization:
An open team-based organization design that empowers employees
Extensive and open information sharing
Leadership that provides a shared vision of the organizations
future.
A strong culture of shared values, trust, openness, and a sense of
community.
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LEADERSHIP &MOTIVATION
Unit-3
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L d hi
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Leadership
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What is leadership?
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What is leadership?
LeaderSomeone who can influence othersand who has managerial authority
LeadershipWhat leaders do; the process of
influencing a group to achieve goals
Ideally, all managers should be leaders
Although groups may have informal leaderswho emerge, those are not the leaders werestudying
PDM MBA 95
Types of Leaders
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Types of Leaders
Leader by the position achieved
Leader by personality, charisma
Leader by moral example
Leader by power held
Intellectual leader
Leader because of ability to accomplishthings
PDM MBA 96
Managers vs Leaders
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Managers vs. Leaders
Managers
Focus on things
Do things right
Plan Organize
Direct
Control Follows the rules
Leaders
Focus on people
Do the right things
Inspire Influence
Motivate
Build Shape entities
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Leadership Traits
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Leadership Traits
Intelligence
More intelligent than
non-leaders
Scholarship
Knowledge
Being able to get things
done
Physical
Doesnt see to be
correlated
Personality
Verbal facility
Honesty
Initiative
Aggressive
Self-confident
Ambitious
Originality Sociability
Adaptability
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Leadership Styles
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Leadership Styles
Delegating
Low relationship/ low
task
Responsibility
Willing employees
Participating
High relationship/ low
task
Facilitate decisions
Able but unwilling
Selling
High task/high
relationship
Explain decisions
Willing but unable
Telling
High Task/Low
relationship
Provide instruction
Closely supervise
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Leadership Issues in the
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21st Century
Managing Power Legitimate power
The power a leader has as a
result of his or her position.
Coercive power
The power a leader has to
punish or control.
Reward power
The power to give positive
benefits or rewards.
Expert power The influence a leader can
exert as a result of his or
her expertise, skills, or
knowledge.
Referent power The power of a leader that
arise because of a persons
desirable resources or
admired personal traits.
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Developing Trust
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Developing Trust
Credibility (of a Leader) The assessment of a leaders honesty, competence, and
ability to inspire by his or her followers
Trust
Is the belief of followers and others in the integrity,character, and ability of a leader
Dimensions of trust: integrity, competence,
consistency, loyalty, and openness
Is related to increases in job performance, organizationalcitizenship behaviors, job satisfaction, and organization
commitment
PDM MBA 101
Suggestions for Building
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Trust
Practice openness.
Be fair.
Speak your feelings.
Tell the truth.
Show consistency.
Fulfill your promises.
Maintain confidences.
Demonstrate competence
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Empowering Employees
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Empowering Employees
Empowerment
Involves increasing the decision-making discretion of
workers such that teams can make key operating decisions
in develop budgets, scheduling workloads, controlling
inventories, and solving quality problems
Why empower employees?
Quicker responses problems and faster decisions
Addresses the problem of increased spans of control inrelieving managers to work on other problems
PDM MBA 103
Cross-Cultural
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Leadership
Universal Elements of Effective Leadership
Vision
Foresight
Providing encouragement
Trustworthiness
DynamismPositiveness
ProactivenessPDM MBA 104
Gender Differences and
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Leadership
Research Findings
Males and females use different styles:
Women tend to adopt a more democratic or participative
style unless in a male-dominated job. Women tend to use transformational leadership.
Men tend to use transactional leadership.
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Leader Training
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Leader Training
More likely to be successful with individuals who are highself-monitors than with low self-monitors.
Individuals with higher levels of motivation to lead are
more receptive to leadership development opportunities
Can teach: Implementation skills
Trust-building
Mentoring
Situational analysis
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Substitutes for Leadership
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Follower characteristicsExperience, training, professional orientation, or
the need for independence
Job characteristicsRoutine, unambiguous, and satisfying jobs
Organization characteristics
Explicit formalized goals, rigid rules andprocedures, or cohesive work groups
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Motivation
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Motivation
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What Is Motivation?
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What Is Motivation?
Motivation
Is the result of an interaction between the person and a
situation; it is not a personal trait.
Is the process by which a persons efforts are energized,
directed, and sustained towards attaining a goal.
Energy: a measure of intensity or drive.
Direction: toward organizational goals
Persistence: exerting effort to achieve goals.
Motivation works best when individual needs are
compatible with organizational goals.PDM MBA 109
Early Theories of
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Motivation
Maslows Hierarchy of Needs
McGregors Theories X and Y
Herzbergs Two-Factor Theory McClellands Three Needs Theory
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Contd
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Contd.
Maslows Hierarchy of Needs Theory Needs were categorized as five levels of lower- to higher-order needs.
Individuals must satisfy lower-order needs before they can satisfy
higher order needs.
Satisfied needs will no longer motivate.
Motivating a person depends on knowing at what level that person
is on the hierarchy.
Hierarchy of needs
Lower-order (external): physiological, safety
Higher-order (internal): social, esteem, self-actualization
PDM MBA 111
Maslows Hierarchy of
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Needs
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Contd
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Contd.
McGregors Theory X and Theory YTheory X
Assumes that workers have little ambition, dislike work,
avoid responsibility, and require close supervision.Theory Y
Assumes that workers can exercise self-direction, desire
responsibility, and like to work.
Assumption: Motivation is maximized by participative decision
making, interesting jobs, and good group relations.
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Contd
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Contd.
Herzbergs Motivation-Hygiene Theory
Job satisfaction and job dissatisfaction are created by different factors.
Hygiene factors: extrinsic (environmental) factors that create job
dissatisfaction.
Motivators: intrinsic (psychological) factors that create jobsatisfaction.
Attempted to explain why job satisfaction does not result in increased
performance.
The opposite of satisfaction is not dissatisfaction, but rather no
satisfaction.
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Herzbergs Motivation-
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Hygiene Theory
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Contrasting Viewsof Satisfaction-
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Dissatisfaction
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Motivation and Needs
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Motivation and Needs
Three-Needs Theory (McClelland)
There are three major acquired needs that are
major motives in work.
Need for achievement (nAch)
The drive to excel and succeed
Need for power (nPow)
The need to influence the behavior of others
Need of affiliation (nAff)
The desire for interpersonal relationships
PDM MBA 117
Examples of Pictures Used for Assessing
Levels of nAch nAff and nPow
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Levels of nAch, nAff, and nPow
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Contemporary Theories
f M i i
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of Motivation
Goal-Setting Theory
Reinforcement Theory
Designing Motivating Jobs Equity Theory
Expectancy Theory
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Motivation and Goals
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ot vat o a d Goa s
Goal-Setting Theory Proposes that setting goals that are accepted, specific, and
challenging yet achievable will result in higher
performance than having no or easy goals.
Is culture bound to the U.S. and Canada. Benefits of Participation in Goal-Setting
Increases the acceptance of goals.
Fosters commitment to difficult, public goals.
Provides for self-feedback (internal locus of control) that
guides behavior and motivates performance (self-efficacy).
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Goal-Setting Theory
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g y
PDM MBA 121
Motivation and Behavior
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Reinforcement Theory
Assumes that a desired behavior is a function of its
consequences, is externally caused, and if
reinforced, is likely to be repeated. Positive reinforcement is preferred for its long-term
effects on performance.
Ignoring undesired behavior is better than punishment
which may create additional dysfunctional behaviors.
PDM MBA 122
Designing Motivating
J b
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Jobs
Job Design The way into which tasks can be combined to form complete jobs.
Factors influencing job design:
Changing organizational environment/structure
The organizations technology
Employees skill, abilities, and preferences
Job enlargement
Increasing the jobs scope (number and frequency of tasks)
Job enrichment
Increasing responsibility and autonomy (depth) in a job.
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Contd.
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Job Characteristics Model (JCM) A conceptual framework for designing motivating jobs that create
meaningful work experiences that satisfy employees growth needs.
Five primary job characteristics:
Skill variety: how many skills and talents are needed? Task identity: does the job produce a complete work?
Task significance: how important is the job?
Autonomy: how much independence does the jobholder have?
Feedback: do workers know how well they are doing?
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Job Characteristics
M d l
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Model
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Guidelines for Job
R d i
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Redesign
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Designing Motivating
Jobs (contd)
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Jobs (contd)
Suggestions for Using the JCM Combine tasks (job enlargement) to create more
meaningful work.
Create natural work units to make employees work
important and whole.
Establish external and internal client relationships to
provide feedback.
Expand jobs vertically (job enrichment) by giving
employees more autonomy.
Open feedback channels to let employees know how well
they are doing.PDM MBA 127
Equity Theory
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q y y
Proposes that employees perceive what they get from a jobsituation (outcomes) in relation to what they put in (inputs)
and then compare their inputs-outcomes ratio with the
inputs-outcomes ratios of relevant others.
If the ratios are perceived as equal then a state of equity(fairness) exists.
If the ratios are perceived as unequal, inequity exists
and the person feels under- or over-rewarded.
When inequities occur, employees will attempt to dosomething to rebalance the ratios (seek justice).
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Contd.
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Employee responses to perceived inequities: Distort own or others ratios.
Induce others to change their own inputs or outcomes.
Change own inputs (increase or decrease efforts) oroutcomes (seek greater rewards).
Choose a different comparison (referent) other (person,
systems, or self).
Quit their job.
Employees are concerned with both the absolute
and relative nature of organizational rewards.PDM MBA 129
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Expectancy Theory
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p y y
States that an individual tends to act in a certain way based on theexpectation that the act will be followed by a given outcome and on the
attractiveness of that outcome to the individual.
Key to the theory is understanding and managing employee goals and
the linkages among and between effort, performance and rewards.
Effort: employee abilities and training/development
Performance: valid appraisal systems
Rewards (goals): understanding employee needs
PDM MBA 131
Simplified Expectancy
Model
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Model
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Contd.
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Expectancy RelationshipsExpectancy (effort-performance linkage)
The perceived probability that an individuals effort will
result in a certain level of performance.
Instrumentality
The perception that a particular level of performance
will result in the attaining a desired outcome (reward).
Valence The attractiveness/importance of the performance
reward (outcome) to the individual.
PDM MBA 133
Integrating Contemporary Theories
of Motivation
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PDM MBA 134
Current Issues in
Motivation
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Motivation
Cross-Cultural Challenges Motivational programs are most applicable in cultures where
individualism and achievement are cultural characteristics
Uncertainty avoidance of some cultures inverts Maslows needshierarchy.
The need for achievement (nAch) is lacking in other cultures.
Collectivist cultures view rewards as entitlements to bedistributed based on individual needs, not individual performance.
Cross-Cultural Consistencies
Interesting work is widely desired, as is growth, achievement, and
responsibility.
PDM MBA 135
Current Issues in
Motivation
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Motivation
Designing Appropriate Rewards Programs Open-book management
Involving employees in workplace decision by opening up the
financial statements of the employer.
Employee recognition programs
Giving personal attention and expressing interest, approval, and
appreciation for a job well done.
Pay-for-performance
Variable compensation plans that reward employees on the basis of
their performance: Piece rates, wage incentives, profit-sharing, and lump-sum
bonuses
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Contd.
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Stock option programs Using financial instruments (in lieu of monetary
compensation) that give employees the right to purchase
shares of company stock at a set (option) price.
Options have value if the stock price rises above the
option price; they become worthless if the stock price
falls below the option price.
PDM MBA 137
From Theory to Practice:Guidelines for
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Motivating Employees Recognize individual
differences
Match people to jobs
Use goals
Ensure that goals are
perceived as attainable
Individualize rewards
Link rewards toperformance
Check the system for equity Use recognition
Show care and concern for
employees
Dont ignore money
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