EMG20 (PPT Compilation)

INTRODUCTION TO
ENGINEERING MANAGEMENT

MANagement is…
• Getting things done through people.
• The process of achieving organizational goals by
engaging in the four major functions of planning &
decision-making, organizing & staffing,
directing/leading, and controlling.
• Identifying a “force”/group of people whose job is to
direct the effort and activities of other people
towards a common organizational objective.
• The performance of conceiving and achieving desired
results by means of group effort consisting of utilizing
resources, that will determine the success and failure
of an organization.

A Chinese Proverb

“If you are planning for
one year – plant rice. If
you are planning for ten
years – plant trees. But if
you are planning for 100
years – plant people!”

Engineering Management is…
• The process of designing and maintaining an
environment in which, individuals, working together
in groups, efficiently accomplish organizational
goals/objectives.
Management applies to any kind of organization.
It applies to all managers at all organizational levels.
The aim of all managers is the same; to create a
surplus.
Managing is concerned with productivity, which
implies effectiveness and efficiency.

Functions of Management
• Planning & Decision-Making
Involves selecting goals and objectives, as well as the
actions to achieve them; it requires decision-making, that is
choosing the “best” from among alternatives.

• Organizing
Involves establishing an intentional structure of roles for
people to fill in an organization.
The process of allocating and arranging human and nonhuman resources so that plans can be carried out
successfully.

• Staffing
Involves filling, and keeping filled, the positions in the
organization structure.
Process by which managers select, train, promotes, and
retires subordinate.

Functions of Management
• Directing/Leading
Influencing people so that they will contribute to
organizational and group goals.

• Controlling
Measuring and correcting individual and organizational
performance to ensure that events conform to plans
Facilitates the accomplishment of plans.
The process of regulating organizational activities so that
actual performance conforms to expected organizational
standards.

Managerial Skills and the Organizational
Hierarchy

Managerial Levels

TOP

MIDDLE

FIRST-LINE

Strategic Managers who are ultimately responsible
for the entire organization. Typical titles include
CEO, COO, CFO, “President”, “Executive Vice
President”, “Executive Director”, “Senior Vice
President”, or “Vice President”.
Tactical Managers located beneath the top
levels of the hierarchy who are directly
responsible for the work of managers at lower
levels. Titles include “Manager”, “Director of”,
“Chief”, “Department Head”, and “Division Head”.

Operational Managers at the lowest level of
the hierarchy who are directly responsible for
the work of operating (non-managerial)
employees. Often have titles that include the
word “Supervisor”.

Management Skills and Levels
Top Management
Conceptual
and design
skills
Middle
Management
Human
skills

Technical
skills

Supervisors

Percentage of job

What Managers Actually Do?
• Unrelenting Pace
Managers began working the moment they arrived at the office in the
morning and kept working until they left at night. (e.g. Rather than
taking coffee breaks they usually drank their coffee while they
attended meetings, lunches were almost eaten in the course of formal
of informal meetings.

• Brevity, Variety, and Fragmentation
Managers handled a wide variety of issues throughout the day. (e.g.
Awarding a retirement plaque to discussing the bidding on a multimillion-dollar contract.

• Verbal Contacts and Networks
Managers showed a strong preference for verbal communication and
relied heavily on networks. A network is a set of cooperative
relationships with individuals whose help is needed in order for a
manager to function effectively.

Other Management Aspects
• Characteristics of excellent and most admired
managers.
• Productivity, Effectiveness, and Efficiency.
• Managing – Science or Art?
• History/Evolution of Management Thought.

Excellent managers are/have
good communicator
acquire the skills of listening, speaking, reading, and writing

integrity
flexible

“living it myself before leading others”

multi-tasker, imaginative and innovative

focused
try to see the “big picture” within the forest of details

committed
willing to do whatever it takes attain organizational success

people-oriented
gratitude
“give credit where it is due”

knows that people’s feelings are important

Productivity, Effectiveness, and
Efficiency
Productivity is an index that measures output (goods
and services) relative to the input (labor, materials,
energy, and other resources) used to produce them.
Effectiveness means the capability of producing an
effect. (doing the "right" things)
Efficiency is a measure of how well a certain aspect is
performing. (doing the things “right”)

Is Management a Science or an Art?
Definitions according to Webster's College
Dictionary:
Art – “skill in conducting any human activity”
Science – “any skill or technique that reflects a
precise application of facts or a principle”

The Evolution of Management Theory
• Began in the industrial revolution in the late
19th century as:
- Managers of organizations began seeking ways to
better satisfy customer needs.
- Large-scale mechanized manufacturing began to adopt
small-scale craft production in which goods were
produced.
- Social problems were developed in the large groups of
workers employed under the factory system.
- Managers began to focus on increasing the efficiency of
the worker-task mix.

• Adam Smith (18th century economist)
– Observed that firms manufactured pins in one of
two different ways:
• Craft-style - each worker did all steps.
• Production - each worker specialized in one step.

– Realized that job specialization resulted in much
higher efficiency and productivity
• Breaking down the total job allowed for the division of
labor in which workers became very skilled at their
specific tasks.

• Frederick Winslow Taylor
– “Father "of Scientific Management (systematic
study of the relationships between people and
tasks for the purpose of redesigning the work
process for higher efficiency”) in the late 1800’s to
replace informal rule of thumb knowledge.
– Taylor sought to reduce the time a worker spent
on each task by optimizing the way the task was
done.

Taylor’s Four Principles of Scientific Management
1.
2.
3.
4.

Scientifically study each part of a task and develop the
best method for performing it.
Carefully select workers and train them to perform the
task using the scientifically developed method.
Cooperate fully with workers to ensure that they use
the proper method.
Divide work and responsibility so that management is
responsible for planning work methods using scientific
principles and workers are responsible for executing
the work accordingly.

• Frank and Lillian Gilbreth
– Refined Taylor’s work and made many
improvements to the methodologies of time and
motion studies.
– Time and motion studies
• Breaking up each job action into its components.
• Finding better ways to perform the action.
• Reorganizing each job action to be more efficient.

– Also studied worker-related fatigue problems
caused by lighting, heating, and the design of
tools and machines.


• Max Weber
– Developed the concept of bureaucracy as a formal
system of organization and administration
designed to ensure efficiency and effectiveness.

Weber’s Principle of Bureaucracy

Weber’s Five Principles of Bureaucracy
1. Authority is the power to hold people accountable for their
actions.
2. Positions in the firm should be held based on performance,
not social contacts.
3. Position duties are clearly identified so that people know
what is expected of them.
4. Lines of authority should be clearly identified such that
workers know who reports to who.
5. Rules, standard operating procedures (SOPs), and norms
guide the firm’s operations.

• Henri Fayol
– Synthesized various tenets or principles of
organization and management
– He published "The Principles of Scientific
Management" in the USA in 1911

Fayol’s 14 Principles of Management
1. Division of work – divide work into specialized tasks
and assign responsibilities to specific individuals.
2. Authority – delegate authority along with
responsibility.
3. Discipline – make expectations clear and sanction
violations.
4. Unity of command – each employee should be
assigned only to one supervisor.
5. Unity of direction – employees’ efforts focused on
achieving organizational objectives.

6. Subordination of individual interest to the general
interest – the general interest must predominate.
7. Remuneration – systematically reward efforts that
supports the organization’s direction.
8. Centralization – determine the relative importance
of superior and subordinate roles.
9. Scalar chain – keep communications within the
chain of command.
10. Order – order jobs and material so they support
the organization’s direction.

11. Equity – managers should be kind and fair to their
subordinates .
12. Stability of tenure – management should provide
orderly personnel planning and ensure that
replacements are available to fill vacancies.
13. Initiative – employees who are allowed to originate
and carry out plans will exert high levels of effort .
14. “Esprit de corps” – promoting team spirit will build
harmony and unity within the organization.

Approaches to Management
1.

Empirical or Case Approach
Studies experience through cases.
Identifies successes and failures.

2.

Contingency or Situational Approach
Managerial practice depends on circumstances (i.e., a contingency or a
situation).
Contingency theory recognizes the influence of given solutions on
organizational behavior patterns.

3.

Mathematical or “Management Science” Approach
Sees managing as mathematical processes, concepts, symbols, and models.
Looks at management as a purely logical process, expressed in
mathematical symbols and relationships.

4.

Decision Theory Approach
Focuses on the making of decisions, persons or groups making decisions,
and the decision-making process.
Some theorists use decision making as a springboard to study all enterprise
activities. The boundaries are no longer clearly defined.

5.
6.

7.

Re-engineering Approach
Concerned with fundamental re-thinking, process analysis, radical
re-design, and dramatic results.
Systems Approach
Systems have boundaries, but they also interact with the external
environment; that means organization are open systems.
Recognizes the importance of studying interrelatedness of planning,
organizing, and controlling in an organization as well as in the many
subsystems.
Socio-technical Approach
Technical system has a great effect on the social system (personal
attitudes, group behavior).
Focuses on production, office operations, and other areas with
close relationships between the technical system and people.

8.

9.

10.

Group Behavior Approach
Emphasizes behavior of people in groups.
Based on sociology and social psychology.
Primarily studies group behavior patterns.
The study of large groups is often called organizational behavior.
Interpersonal Behavior Approach
Focuses on interpersonal behavior, human relations, leadership,
and motivation.
Based on individual psychology.
Cooperative Social Systems Approach
Concerned with both interpersonal and group behavioral aspects
leading to a system of cooperation.
Expanded concept includes any cooperative group with a clear
purpose.

11.
12.

13.
14.

McKinsey’s 7-S Framework
The seven S’s are (1) strategy, (2) structure, (3) systems, (4) style,
(5) staff, (6) shared values, and (7) skills.
Total Quality Management Approach
Focuses on providing dependable, satisfying products and services
(Deming) or products or services that are fit for use (Juran), as well
as conforming to its quality requirements (Crosby).
Management Process or Operational Approach
Draws together concepts, principles, techniques, and knowledge
from other fields and managerial approaches.
Managerial Roles Approach
Original study consisted of observations of five chief executives.
On the basis of this study, ten managerial roles were identified and
grouped into interpersonal, informational, and decision roles.

The Managerial Roles Approach:
•

Managerial Roles
1. Interpersonal Roles – grow directly out of the
authority of a manager’s position and involve
developing and maintaining positive relationships
with significant others.
2. Informational Roles – pertain to receiving and
transmitting information so that manager can serve
as the nerve centers of their organizational units.
3. Decisional Roles – involve making significant decisions
that affect the organization.

10 Specific Managerial Roles
Interpersonal Roles

Role

Description

Figurehead

Performs symbolic duties of a legal
or social nature.

Leader

Builds relationships with
subordinates and communicates
with help and information.

Liaison

Maintains networks of contacts
outside work unit who provide help
and information.

Informational Roles

Role

Description

Monitor

Seeks internal and external
informational about issues that can
affect organization.

Disseminator

Transmits information internally
that is obtained form either internal
or external sources.

Spokesperson

Transmits information about the
organization to outsiders.

Decisional Roles
Role
Entrepreneur

Description
Acts as initiator, designer, and encourager of
change and innovation.

Disturbance Handler

Takes corrective action when organization
faces important, unexpected difficulties.

Resource Allocator

Distributes resources of all types including
time, funding, equipment, and human
resources.

Negotiator

Represents the organization in major
negotiations affecting the manager’s areas
of responsibility.

Management Styles
• Administrators
Administrators look to company rules and regulations for
solving all problems. They live by the book and are usually
very good employees. They show total loyalty to the
organization and have probably been with the company
for many years.
Administrators are usually not very good communicators,
using the official company channels for all
communications, which are often limited to one level
upwards and downwards.
They are not good in resolving conflict, looking to
company rules for resolving these. In spite of their rather
mechanistic approach.
They are generally respected by their staff, and by peers,
for their organizational loyalty and knowledge.

Management Styles
• Time Servers
These are generally older mangers who have lost interest in their job
and environment, and are marking time until retirement or moving to
another job.
They take all necessary action to avoid stress, and maintain a low
profile within the company.
Although these mangers are not generally lazy, their low motivation
means that they do the minimum amount of work needed to hold
down a job.
Decisions are avoided since they could lead to mistakes.
Personal status is very important to them.
Time servers usually have good management experience, and if
motivated can become a very valuable asset to the organization.
They often consider themselves to be “father or mother figures”.
They understand people and can build an effective team if they try.
They recognize achievements in others and are ready to acknowledge
them.

Management Styles
• Climbers
These manager are driven by extreme personal ambition
and will sacrifice everything, including self and family, to
get to the top of the corporate ladder.
They want to achieve and to be seen to have achieved,
especially by those in a superior position.
Climbers will pursue personal advancement by fair means
or foul. However, they become demotivated if this does
not show quick results, and this can eventually lead to
stress.
Self interests come before those of the organization, and
peers will be fought in order to gain an advantage and to
build an empire.
Status is important but only as a sign of seniority.

Management Styles
• Generals
This is usually a younger person who exhibits lots of energy.
The general likes to rule and manipulate power, but is
achievement oriented: power is used to get tasks done.
Generals work extremely hard, driving themselves and those
around them.
Generals are sociable and mix well at all levels. They usually get
their way with peers by overwhelming, although peers can
resent this if it is done too often.
Status is important to generals, but for the luxury associated
with it, not as a symbol of seniority.
They are strong-willed individuals, often with the same
characteristics as a self-made entrepreneurs.
Usually they are optimistic about the future, sometimes
wrongly.

Management Styles
• Supporters
Supporters maintain a balanced view about the world, the organization,
subordinates, and themselves.
They are usually experience managers who are knowledgeable in
management techniques and apply them where they can.
Supporters work through people in achieving their aims.
They are good at delegation and develop their subordinates by giving them
responsibility.
The people working under them are highly motivated.
Supporters’ personal technical knowledge is usually lacking, but this
compensated for by the support they themselves receive from the specialists
within their department.
Supporters are good facilitators and are very good in managing change.
They recognize achievement and reward it.
They tend to be loners and do not mix well with peers.
This means that they can often miss out on information from the grapevine,
so that they are not always well-briefed on organizational matters.

Management Styles
• Nice Guys
These managers are usually weak-willed and are more
interested in being liked, by peers and subordinates, than
in achieving targets.
They do not criticize their subordinates, even when they
are poor performers, and may in fact support too much, so
unconsciously retarding their development.

Management Styles
• Bosses
Bosses are extremely inflexible and are often mistaken for
strong-minded people.
Usually, they are only strong talkers, and hide behind abusive
language.
They try to terrorize subordinates and peers, creating conflict to
emphasize their own power.
Managers in the boss category are often brought into a
company to act as “Hatchet Men”.
In the short-term, they can show results, but in long-term they
are very destructive, causing more harm than good.
They are insecure in themselves and get security by humiliating
others in public.
They advance by pointing out the mistakes of others, and not by
their own achievements.

Five Filipino Styles of Management
1. Managers by “Kayod”
“Kayod” is a Filipino term which means “to sweat it out or to give oneself to hard
work”.
This manager is action-hungry, highly dedicated, but his manners are rather
formal and that of an introvert.
He is a serious worker and will not give in to bribing or any anomalous deals.

2. Managers by “Lusot”
“Lusot” is another Filipino word which means “capitalizing on a loophole”.
Thus, this manager will be always on the lookout for loophole of anything and will
use them to avoid too much work, or shortcuts and to do unconventional or even
illegal ways to attain objectives. Generally, an extrovert.
He deals with people informally.

3. Managers by “Libro”
“Libro” in English, book.
This type of manger operates by the dictates of the book.
What the manuals other formal documents say.
He is systematic and analytical.
He usually has adequate formal training in management.

Five Filipino Styles of Management
4.

Managers by “Oido”
This manager leaves his managerial skills by oido or by ear.
He has a vast field of practical experiences to compensate for his lack of
formal management education.
He is the opposite of the “Libro” manager.

5.

Managers by “Ugnayan”
He is a hybrid of all type of managers.
Hence, he is one type of manager now, and different in another time,
depending on the situation.
He is a gifted reconciler of all philosophers and beliefs held by various types
of managers.
He integrates various styles of management depending on the need and
conditions of his organization.
He is participatory and coordinative.

Reference : Management - A Global Perspective by Weihrich and Koontz 11th Edition
Prepared by : Prof. E.S.Bio/Prof. J.DC.German

PLANNING AND
DECISION-MAKING
Essentials of Planning and Decision-Making

Planning…







The most fundamental and basic of all management
function
Involves a rational approach in selecting and
achieving goals and objectives and deciding on the
actions to achieve them.
Strongly implies managerial innovation.
Bridges the gap from where we are and to where we
want to go.

Close Relationship of
Planning and Controlling


Planning and Controlling are inseparable.
 They

are the Siamese Twins of Management.
New Plans

Controlling:
Planning

Implementation
of plans

Figure 1:
Close Relationship of Planning and Controlling

Comparing
plans with
results

Corrective action

No undesirable
deviation from
plans

Close Relationship of
Planning and Controlling





Any attempt to control without plans is
meaningless, since there is no way for people to tell
whether they are going where they want to go
(the result of the task of control) unless they first
know where they want to go (part of the task of
planning).
Plans thus furnish the standards of control.

Types of Plans
1.
2.
3.
4.
5.

6.
7.
8.

Visions
Missions or Purposes
Goals or Objectives
Strategies
Procedures
Rules
Programs
Budgets

Types of Plans
1.

Vision





A picture of the state of the desired outcome in
the future usually in the long term from current
time.
It answers the question ―where do we want to
go?‖
It may be a plan or a goal. Like objectives a
vision statement should be specific, measurable,
attainable, realistic and time-bound.

Developing a Vision


Begins with thinking strategically
• About the firm’s future makeup;
• Forming vision of firm’s future in 5-10 years
• Task is to:
 Inject sense of purpose into firm’s activities;
 Provide LONG-TERM DIRECTION;
 Give the firm STRONG IDENTITY;
 Decide ―WHO we are, WHAT we do, & WHERE we are
headed‖

VISION STATEMENTS
FAMOUS COMPANIES

COCA-COLA – vision statement


―To bring to the world a portfolio of beverage
brands that anticipate and satisfy peoples; desires
and needs.‖

NIKE – vision statement


"To bring inspiration and innovation to every athlete
in the world"

AMAZON.COM – vision statement


―To be earth's most customer centric company; to
build a place where people can come to find and
discover anything they might want to buy online.‖

BUDWEISER– vision statement


―To be the world's beer company. Through all of our
products, services and relationships, we will add to
life's enjoyment.

FORD – vision statement


―To become the world's leading Consumer Company
for automotive products and services.‖

BOEING – vision statement


―Become the dominant player in commercial aircraft
and bring the world into the jet age.‖

UNILEVER – vision statement


To touch the lives of over 2 billion people every
day through our products– whether that's through
feeling great because they've got shiny hair and a
brilliant smile, keeping their homes fresh and clean,
or by enjoying a great cup of tea, satisfying meal
or healthy snack.

SONY – vision statement


To continue to be a leading manufacturer of audio,
video, communications, and information technology
products for the consumer and professional markets.

MEDICAL CITY – vision statement


―To always be a leader in shaping how Filipinos
think, feel, and behave about health and how
health services are accessed by and delivered to
them, and to use such leadership to serve equity in
health, life and development.‖

MICROSOFT – vision statement


To create experiences that combine the magic of
software with the power of Internet services across
a world of devices.

GOOGLE – vision statement


To develop a perfect search engine.

APPLE – vision statement


Committed to bringing the best personal computing
experience to students, educators, creative
professionals and consumers around the world
through its innovative hardware, software and
Internet offerings.

BMW – vision statement


To become most successful premium manufacturer in
the car industry.

GMA NETWORK – vision statement




To be the most respected, undisputed leader in the
Philippine broadcast industry and the recognized
media innovator and pacesetter in Asia.
To be the Filipinos’ favorite network.
To be the advertisers’ preferred partner.
To be a key partner in promoting the best in the
Filipino

MC DONALD’S – vision statement


―To be the world's best quick service restaurant.
Being the best means providing outstanding quality,
service, cleanliness, and value, so that we make
every customer in every restaurant smile."

JOLLIBEE – vision statement


To be the best tasting QSR... (quick service restaurant)
To be the most endearing brand that has ever been...
To lead in product taste at all times...
To provide FSC (food, service, cleanliness) excellence
in every encounter...
Happiness in every moment...
By year 2020, with over 4,000 stores worldwide,
truly a GLOBAL BRAND (and the Filipino will be
admired worldwide)

STARBUCKS – vision statement


"To establish as the premier purveyor of the finest
coffee...‖

DISNEYLAND – vision statement



To be the happiest place on earth.

TOY’S R US – vision statement


Our Vision is to put joy in kids’ hearts and a smile
on parents’ faces."

MAPUA – vision statement


Shall be a global center of excellence in education
by providing instructions that are current in content
and state-of-the-art in delivery.

Types of Plans
2.

Purposes or Missions









Identifies the basic purpose or function or tasks of the organization
or any part of it.
In every social system, enterprises have a basic function or task
assigned to them by society.
For example,
business - production and distribution of goods and services
state highway department - design, building, and operation of a
system of state highways
courts - interpretation of laws and their application
university - teaching, research, and providing services to the
community

COCA-COLA – mission statement





To refresh the world...
To inspire moments of optimism and happiness...
To create value and make a difference.

NIKE – mission statement



To lead in corporate citizenship through proactive
programs that reflect caring for the world family of
Nike, our teammates, our consumers, and those who
provide services to Nike"

AMAZON.COM – mission statement


To continue to offer quality products and services
using the best technology available and at a
reasonable price.

MC DONALD’S – mission statement


"be our customers' favorite place and way to eat."

JOLLIBEE – mission statement


To serve great tasting food, bringing the joy of
eating to everyone.

NOKIA – mission statement


―Connecting people.‖

STARBUCKS – mission statement


to inspire and nurture the human spirit – one person,
one cup and one neighborhood at a time.

DISNEYLAND – mission statement


To make people happy.

MAPUA – mission statement


The Institute, using the most effective and efficient
means, provides its students with highly relevant
professional and advanced education in
preparation for and furtherance of global practice.

Types of Plans
3.

Goals or Objectives


Represent not only the end point of planning, but
also the end toward which organizing,
directing/leading, and controlling are aimed.

TYPES OF OBJECTIVES NEEDED by an
Organization:

1.
•

Financial Objectives
Outcomes that relate to improving firm’s financial
performance

SPECIFIC FINACIAL CORPORATE
OBJECTIVES

•
•
•
•

McCORMICK & COMPANY
Improve returns from each of our existing operating groups.
Achieve a 20% return on equity.
Achieve net sales growth rate of 10% per year.
Maintain an average earnings per share growth rate of 15%
per year.

SPECIFIC FINACIAL CORPORATE
OBJECTIVES




QUAKER OATS COMPANY
To achieve return on equity at 20% or above, ―real‖ earnings
growth averaging 5% or better over time, be a leading
marketer of strong consumer brands, and improve the
profitability of low-return businesses or divest them.

TYPES OF OBJECTIVES NEEDED by an
Organization:

2.
•

Strategic Objectives
Outcomes that will result in greater competitiveness &
stronger long-term market position

SPECIFIC STRATEGIC CORPORATE
OBJECTIVES






NIKE
Protect & improve Nike’s position as the number one athletic
brand in America.
Build a strong momentum in growing fitness market.
Intensify the company’s effort to develop products that
customers need and want.

SPECIFIC STRATEGIC CORPORATE
OBJECTIVES




ATLAS CORPORATION
To become a low-cost, medium-size gold producer, producing
in excess of 125,000 ounces of gold a year and building gold
reserves of 1,500,000

Types of Plans
4.

Strategies


It is defined as the determination of the
basic long-term objectives of an enterprise
and the adoption of courses of action and
allocation of resources necessary to
achieve these goals.

WHAT IS A “STRATEGY?”
Consists of competitive moves &
business approaches to produce successful
performance
Management’s “game plan” for:
 Running the business
 Strengthening firm’s competitive position
 Satisfying customers
 Achieving performance targets

A strategy without metrics is just a wish. And metrics
that are not aligned with strategy are a waste of time.

THINKING STRATEGICALLY: THREE BIG
STRATEGIC QUESTIONS
1. WHERE ARE WE NOW?

2. WHERE DO WE WANT TO GO?

3. HOW WILL WE GET THERE?

Types of Plans
4.

Policies





General statements or understandings that guide or
channel thinking in decision making.
They help decide issues before they become
problems.
Make it unnecessary to analyze the same situation
every time it comes up, and
Unify other plans, thus permitting other managers
to delegate authority and still maintain control
over what their subordinates do.

Sample Attendance Policy: No-Fault Point System
The goal of this attendance policy is to reward good attendance and
eliminate people with poor attendance. It uses a point system, and does
not excuse or unexcuse absences.
In a no fault attendance system, absences are recorded thus:
Each absence = 1 point (no multi-day occurrences)
Each late in (tardy) or early out = 1/2 point
Each no-show for work = 2 points
Each return with no prior call = 1 point
 Each absence-free quarter eliminates all points and rewards the
employee with a day off with pay.
 Each employee starts fresh, with no points, each year.
Progressive disciplinary action accompanies a no-fault attendance
system. If an employee earns:
7 points = verbal warning
8 points = written warning
9 points = 3 day suspension
10 points = termination

Types of Plans
5.

Procedures

Plans that establish a chronological sequences of required
actions. In handling future activities;

Details of the exact manner in which certain activities must
be accomplished.;

Company policies may grant employees vacations;
procedures established to implement this policy will provide
for scheduling vacations to avoid disruptions of work, setting
rates of vacation pay and methods for calculating them,
maintaining records to ensure each employee of a vacation,
and spelling out the means for applying for leave.

Sample Procedure for Hiring New Employees
1. Determine the need for a new or replacement position.
2. Develop and prioritize the key requirements needed from the position and
the special qualifications, traits, characteristics, and experience looked for
in a candidate. With HR department assistance, develop the job
description and salary range for the position.
3. Advertise or post the job opportunities in the bulletin board, company
website, print media, etc.
4. Send an all-company email to notify staff that a position has been posted
and that the company is open for hiring employees.
5. Interested candidates shall fill out the Position Application. Schedule an
interview for candidates, with the hiring supervisor, the manager of the
hiring supervisor or a customer of the position and HR. (In all cases, tell
the candidates the timelines you anticipate the interview process will take.)
6. Hold the interviews with each interviewer clear about their role in the
interview process. Interviewers shall fill out the Job Candidate Evaluation
Form.
7. If no candidates are selected for the position, make certain to clearly
communicate with the applicants that they were not selected. If a
candidate is selected for the position, prepare a written job offer that
includes the new job description and salary.

Types of Plans
6.

Rules
 Spell out specific required actions or nonactions.
 Usually the simplest type of plan.
 The essence of rule is that it reflects a
managerial decision that a certain action must –
or must not – be taken.
 Rules are different from policies in that policies
are meant to guide decision making by marking
off areas in which managers can use their
discretion, while rules allow no discretion in their
application.

Sample of Simple Rules

NO

Eating
Drinking
Smoking

No littering

P

Classroom Rules:
1. Everyone deserves respect.
2. Come to class prepared.
3. Do your best.
4. Have a winning attitude.
5. Have fun and learn!

Sample House Rules and Regulations
All tenants as well as all their employees, agents, contractors and guests shall comply
with all the rules and regulations which may be promulgated from time to time by the
Property Management Office (“PMO”), and with all rules and ordinances, laws and
executive orders made by the duly constituted local or national authorities regarding the
use, occupancy, ownership, maintenance, upkeep and sanitation of their corresponding
units and their interest of the common areas.
1.Use of Units
1.1 All of the units, except for the third (3rd) podium and the fourth (4th) podium shall
be used exclusively for office purposes only.
1.2 The tenant shall not permit any unlawful act to be committed in or about the unit;
it shall not be used for dwelling, or residential purposes.
1.3 A Permit to Operate from the PMO shall be obtained by the tenant
before the start of operations.
2.Access and Operating Hours
2.1 The main lobby entrances of the RCBC Plaza are open daily, from 6:00 AM to
11:00 PM for all building occupants and their employees. The drop-off entrance
shall be used beyond this time.
2.2 Office visitors and clients shall be allowed entry from 8:30 AM to 6:00 PM
Monday to Friday and 8:30 AM to 3:00 PM on Saturday. No visitors shall be
allowed beyond these hours except when properly identified and acknowledged
by person/s to be visited and prior processing by building security.

Types of Plans
7.

Programs
 A complex of goal, policies, procedures,
rules, task assignments, steps to be taken,
resources to be employed, and other
elements necessary to carry out a given
course of action;
 They are ordinary supported by budgets.

Sample Program: Emergency Action Program

Types of Plans
8.

Budgets

A statement of expected results expressed in numerical terms; may
be called a “quantified” plan. The financial operating budget is often
called a “profit plan”.

May be expressed in financial terms - in terms of labor-hours, units of
product, or machine-hours; or in any other numerically measurable
terms.

May deal with operation, may reflect capital outlays, or may show
cash flow.

Budgets are also control devices. However, making a budget is clearly
planning. The budget is the fundamental planning instrument in many
companies.

The budget is necessary for control, but it cannot serve as a sensible
standard of control unless it reflects plans.

Examples of Budgets








Business start-up budget – includes a list of all necessary
purchases including tangible assets (for example,
equipment, inventory) and services (for example,
remodeling, insurance), (working capital), sources and
collateral
Corporate budget - a finished budget for the short-term
future, typically one year
Government budget - a summary or plan of the intended
revenues and expenditures of that government
Personal or family budget - all sources of income (inflows)
are identified and expenses (outflows) are planned with the
intent of matching outflows to inflows (making ends meet)

Steps in Planning
Being Aware of Opportunities

1.

•

•

All managers should:
 Take at preliminary look at possible future opportunities
and see them clearly and completely.
 Know where their company stands in the light of its
strengths and weaknesses.
 Understand what problems it has to solve and why.
 Know what it can expect to gain.
Planning requires a realistic diagnosis of the opportunity
situation.

Steps in Planning
2.

Establishing Objectives


To be done for the long-term as well as for the short
range.



Objective specify the expected results and indicate
the end points of what is to be done, where the
primary emphasis is to be placed, and what is to be
accomplished.



Objectives must be SMART.

Steps in Planning
3.

Developing Premises




Establish, circulate, and obtain agreement to
utilize critical planning premises such as
forecasts, applicable basic policies, and existing
company plans.
Premises are assumptions about the environment in
which the plan is to be carried out.

Steps in Planning
4.

Determining Alternative Courses





Search for and examine alternative courses of
action, especially those not apparent.
The more common problem is not finding
alternatives but reducing the number of
alternatives so that the most promising may be
analyzed.
Even with mathematical techniques and the
computer, there is limit of the number of
alternatives that can be thoroughly examined.

Steps in Planning
5.

Evaluating Alternative Courses
 Evaluate the alternatives by weighing them
in the light of premises and goals.

Steps in Planning
6.

Selecting a Course


This is the point at which the plan is adopted – the
real point of decision making.



Occasionally, an analysis and evaluation of
alternative courses will disclose that two or more
are advisable, and the manager may decide to
follow several courses rather than the one best
course.

Steps in Planning
7.

Formulating Derivative Plans
 When a decision is made, planning is
seldom complete, and a seventh step is
indicated.


Derivative or action plans are almost
invariably required to support the basic
plan.

Steps in Planning
8.

Quantifying Plans by Budgeting






Quantify decisions and plan by converting them into
budgets.
The overall budget of an enterprise represents the sum
total of income and expenses, with resultant profit or
surplus, and the budgets of major balance sheet items
such as cash and capital expenditures.
If done well, budgets become a means of adding
various plans and set important standards against which
planning progress can be measured.

Steps in Planning
Being aware of
opportunities
In light of:
The market
Competition
What customer want
Our strengths
Our weaknesses

Setting objectives or goals
Where we want to be and
what we want to accomplish
and when.

Considering planning
premises
In what environment – internal
or external – will our plans
operate?

Identifying alternatives
What are the most promising
alternatives to accomplishing
our objectives?

Figure 2.0
Steps in Planning

Comparing alternatives in
light of goals
Which alternative will give us
the best chance of meeting
our goals at the lowest cost
and highest profit?

Choosing an alternative
Selecting the course of action
we will pursue.

Formulating supporting
plans
Such as plans to:
Buy equipment
Buy materials
Hire and train workers
Develop a new product

Quantifying plans by
making budgets
Developing such budgets as:
Volume and price of sales
Operating expenses
necessary for plans
Expenditures for capital
equipment

PLANNING TOOLS &
TECHNIQUES
•
•

•
•

•

Gantt Chart
Pert-CPM Chart
Flow Process Chart
Cause & Effect Diagram
Other tools

Gantt Chart
•
•

•

first project planning and control technique to emerge
during 1940’s in response to the need to manage
complex defense projects and systems better
a tool for planning and scheduling an Analyst
performance during a systems project and for machine
supplies delivery during the installation phase of a
project
shows the anticipated completion times for various
project activities as bars plotted against time on the
horizontal axis

Gantt Chart – Project Development

Program Evaluation & Review Technique (PERT) /
Critical Path Method (CPM) Charts
•
•

a planning and control tool that graphically portrays the
optimum way to attain some predetermined objective,
generally in terms of time
presents a graphic illustration of a project as a network
diagram consisting of numbered nodes (either circles
or rectangles) representing events, or milestones in the
project linked by labeled vectors (directional lines)
representing tasks in the project. The direction of the
arrows on the lines indicates the sequence of tasks.

Systems Flowchart
• explains how a system works using a diagram.
The diagram shows the flow of data through a
system.
• The different shaped symbols used are:

Deployment
Flowchart
–
New Product
Development

Cause and Effect Diagram
• also known as “fishbone diagram”, developed
by Ishikawa in the early 1950s
• method consists of defining an occurrence of a
typically undesirable event or problem (effect)
and then identifying contributing factors
(causes)

Process Map
•
•
•

visually depicts the sequence of events to build a
product or produce an outcome
shows all the process associated activities, including
volumes of input and output, approvals, exceptions,
and cross-functional hand-offs.
the basic goal is to provide a unifying vision of business
processes so that participating organizations and
individuals can have an understanding of their specific
role in the overall system

SWOT Analysis






a strategic planning method used to evaluate the
Strengths, Weaknesses, Opportunities, and Threats
involved in a project or in a business venture
involves specifying the objective of the business
venture or project and identifying the internal and
external factors that are favorable and unfavorable
to achieve that objective
A SWOT analysis must first start with defining a
desired end state or objective and may be
incorporated into the strategic planning model

SWOT Analysis








Strengths - characteristics of the business or team that
give it an advantage over others in the industry.
Weaknesses - characteristics that place the firm at a
disadvantage relative to others.
Opportunities - external chances to make greater
sales or profits in the environment.
Threats - external elements in the environment that
could cause trouble for the business.

An Illustration: The Procter & Gamble Company
Profile
The Procter & Gamble Company (P&G) boasts boatloads of
brands. The world's #1 maker of household products courts
market share and billion-dollar names. It's divided into three
global units: health and well being, beauty, and household
care. The company also makes pet food and water filters and
produces a soap opera. Some two-dozen of P&G's brands are
billion-dollar sellers, including Fusion, Always/Whisper, Braun,
Bounty, Charmin, Crest, Downy/Lenor, Gillette, Iams, Olay, Pampers,
Pantene, Pringles, Tide, and Wella, among others. P&G shed its
coffee brands in late 2008. Being the acquisitive type, with Clairol
and Wella as notable conquests, P&G's biggest buy in company
history was Gillette in late 2005.

Procter & Gamble SWOT Analysis:
STRENGTHS
New Management
Gross Margin 15 Times the Industry Average
One of the best marketers in the world
Diversified brand portfolio: more than 300 brands with more
than 79 billion in Revenue
Tightly integrated with the largest retailers in the US and
around the world
Product innovation
Talented management
Distribute to 80 Countries
Distribution channels all over the world
New Billion Dollar brands

WEAKNESSESS
Top Brands Losing Market Share
Health and Beauty Women Only
Lagging behind in online media presence & leadership
Missing opportunity: Refuses to manufacture private label
products for its retail customers
Slow Process Heavy Culture
Weak brands (Duracell, Iam, Braun, Pringles)
Views Product Performance only

OPPORTUNITIES
THREATS
Health and Beauty for Men
Substitute brands that have a cheaper price
Doubling Environmental Goals for 2012
Private label growth
Adding Value for the Conspiracy
Slowdown in consumer spending in the US & globally
Utilizing online social networks
Key competitors expanding their product portfolios through
Going Green/Eco Friendly
acquisitions
Capitalizing on online media
Increase in raw material price
Continue to divest brands that don't align with the company's
Commodity cost and currency exchange rate placed tremendous
long-term goals (i.e., Folgers)
pressure on the business
Emerging markets
New acquisition opportunities
Selling directly to consumers
Design for better product experience

The TOWS Matrix: A Modern Tool for
Analysis of the Situation






The TOWS Matrix has been introduced for analyzing
the competitive situation of the company that leads to
the development of the four distinct sets of strategic
alternatives.
The TOWS Matrix has a wider scope and a different
emphasis from the business portfolio matrix and SWOT
analysis.
The TOWS Matrix is a conceptual framework for a
systematic analysis that facilitates matching of the
external threats and opportunities with the internal
weaknesses and strengths of the organization.

The TOWS Matrix: A Modern Tool for
Analysis of the Situation
Internal strengths (S)
e.g., strengths in management,
operations, finance, marketing,
research and development,
engineering.

Internal weaknesses (W)
e.g., weaknesses in areas shown
in the “strengths” box.

External opportunities (O)
(consider risks also) e.g., current
and future economic conditions;
political and social changes; new
products, services, and
technology.

SO strategy: Maxi-Maxi
Potentially the most successful
strategy, utilizing the
organization’s strengths to take
advantage of opportunities.

WO strategy: Mini-Maxi
e.g., development strategy to
overcome weaknesses in order to
take advantage of opportunities.

External threats (T)
e.g., energy shortage,
competition, and areas similar to
those shown in the “opportunities”
box above.

ST strategy: Maxi-Mini
Use of strengths to cope with
threats or to avoid with threats.

WT strategy: Mini-Mini
e.g., retrenchment, liquidation, or
joint venture to minimize both
weaknesses and threats.

Internal
factors
External
factors

Decision Making






It is defined as the selection of a course of action
from among alternatives; it is at the core of planning.
A plan cannot be said to exist unless a decision–a
commitment of resources, direction, or reputation–has
been made.
Managers sometime see decision making as their
central job because they must constantly choose what
is to be done, who is to do it, and when, where, and
occasionally even how it will be done.

Major Steps in Decision Making
Identifying Alternatives and the Limiting Factor

1.


The ability to develop alternatives (by ingenuity, research, and common
sense), is often as important as being able to select correctly among
them.



The manager needs help in this situation, as well as assistance in
choosing the best alternative, is found in the concept of the limiting or
strategic factor.



A limiting factor is something that stands in the way of accomplishing
a desired objective.



The principle of the limiting factor states that, by recognizing and
overcoming those factors that stand critically in the way of a goal,
the best alternative course of action can be selected.

Steps in Decision Making
2.

Evaluation of Alternatives










This is the point of ultimate decision making, although
decisions must also be made in the other steps of
planning—in selecting goals, in choosing critical premises,
and even in selecting alternatives.
Because of complexities in evaluating alternatives, newer
methodologies and applications and analysis are needed:
Advantages/ Disadvantages
Strengths/ Weaknesses
Cost-Benefit Analysis (C.B.A.)
Decision Trees

Steps in Decision Making
3.

Selecting an Alternative: Three Approaches
Bases for selecting from among alternative courses of action

Experimentation

Reliance on the
past

How to select from
among
alternatives?

Research and
analysis

Choice made

Decision Making under Certainty,
Uncertainty, and Risk
1.



2.



3.



Certainty
In a situation involving certainty, people are reasonably sure about what will
happen when they make a decision. The information is reliable and is considered
to be reliable, and the cause and effect relationships are known.

Uncertainty
In a situation of uncertainty, on the other hand, people have only a meager
database, they do not know whether or not the data are reliable, and they very
unsure about whether or not the situation may change.

Risk
In a situation with risks, factual information may exist, but it may be incomplete. To
improve decision making, one may estimate the objective probability of an
outcome by using, for example, mathematical models. On the other hand,
subjective probability, based on judgment and experience, may be used.

Reference : Management - A Global Perspective by Weihrich and Koontz 11th Edition

Organizing and Staffing
E.S. BIO
Source: Management - A Global Perspective
by Weihrich and Koontz 11th Edition

is…
Organizing is…
The identification and classification of required
activities.
The grouping of similar activities necessary to
attain objectives.
The assignment of each group to a manager with the
authority necessary to supervise it.
The provision for coordination horizontally (on
the same or a similar organizational level) and
vertically (e.g., between corporate headquarters,
division, and department) in the organization
structure.

The Logic of Organizing
1. Establishing enterprise objectives
2. Formulating supporting objectives, policies, and
3.
4.
5.
6.

plans
Identifying, analyzing, and classifying the activities
necessary to accomplish these objectives
Grouping these activities in light of the human and
material resources
Delegating to the head of each group the authority
necessary to perform the activities
Tying the groups together horizontally and
vertically, though authority relationships and
information flows.

The Organizing Process
Feasibility studies and feedback
1. Enterprise
Objectives

2. Supporting
objectives,
policies, and
plans

3. Identification and
classification of
required activities

4. Grouping of
activities in light of
resources and
situations

5. Delegation of
authority

6. Horizontal and
vertical coordination
of authority and
information
relationships

7. Staffing

8. Leading

9. Controlling

Part 2
(Planning)

Part 3
(Organizing)

Part 4,5,6
(Other Functions)

Organization
It is a formalized intentional structure of
roles or positions.
It includes all the behaviors of all
participants.
It is the total system of social and cultural
relationships.

Formal Organization
Formal Organization means the intentional
structure of roles in formally organized
enterprise.
A formal organization must be flexible.
Individual effort in group situation must be
channeled toward group and organizational
goals.

Informal Organization
It is a network of interpersonal relationships
that arise when people associate with each other.
It can also be described as any joint personal
activity without conscious joint purpose,
although contributing to joint results.
Thus, informal organizations—relationships
that do not appear on the organization
chart—might include the machine shop group,
the sixth floor crowd, the Friday evening bowling
gang, and the morning coffee “regulars”.

Formal and Informal Organizations

Organizational Division: The Department
One aspect of organizing is the establishment of
departments.
A department is a distinct area, division, or
branch of an organization over which a manager
has authority for the performance of the specified
activities.

Organizational Levels and the Span of
Management*
While the purpose of organizing is to make human
cooperation effective, the reason for levels of organization
is the limitation of the span of management.
In other words, organizational levels exist because the is a
limit to the number of persons a manager can supervise
effectively, even thought this limit varies depending on
situations.
A wide span of management is associated with a few
organizational levels; a narrow span, with many levels.
* In much of the literature on management, this is referred to as the span of control.
Despite the widespread use of this term, in this lecture span of management will be
used, since the span is one of management and not merely of control, which is only
one function of managing.

Organization Structures with Narrow and Wide
Spans

Factors Determining an Effective Span
The number of subordinates a manager can
effectively manage on the impact of underlying
factors.
Aside from such personal capacities as
comprehending quickly, getting along with
people, and commanding loyalty and respect, the
most important determinant is a manager’s
ability to reduce the time he or she spends with
subordinates.

Factors Determining an Effective Span

Organization Structure
1.

Departmentation by Enterprise Function
It is the grouping of activities according to
the functions of the enterprise, such as
production, selling, and financing.

2. Departmentation by Territory or Geography
It is the grouping of activities by area or
territory that is common in enterprises
operating over wide geographic areas.


3.

Departmentation by Customer Group
It is the grouping of activities that reflects a
primary interest in customers.

Customer departmentation (in a large bank)
President

Communitycity banking

Corporate
banking

Real estate and
mortgage loans

Advantages:
Encourages focus on customer needs
Gives customers the feeling that they have an
understanding supplier (banker)
Develops expertness in customer area

Institutional
banking

Agricultural
banking

Disadvantages:
May be difficult to coordinate operations
between competing customer demands
Requires managers and staff expert in
customers’ problems
Customer groups may not always be clearly
defined (e.g., large corporate firms vs. other
corporate business)

4.

Departmentation by Product
It is the grouping of activities according to
products or product line, especially in
multiline, large enterprises.

A product organization grouping (in a manufacturing company)
President

Marketing

Personnel

Purchasing

Finance

Instrument
division

Indicator
Lights
Division

Industrial
Tools
Division

Name
Title

Engineering

Accounting

Engineering

Accounting

Production

Sales

Production

Sales

Advantages:
Places attention and effort on product line
Facilitates use of specialized capital, facilities, skills,
and knowledge
Permits growth and diversity of products and services
Improves coordination of functional activities
Places responsibility for profits at the division level
Furnishes measurable training ground for general
managers
* Product departmentation is also used in in nonmanufacturing companies.

Disadvantages:
Requires more persons with general manager
abilities
Tends to make maintenance of economical central
services difficult
Presents increased problem on top of management
control


5.

Matrix Organization
It is the combining of functional and project
or product patterns of departmentation in the
same organization structure.

Line / Staff Authority and
Decentralization
Authority and Power
Power is the ability of individuals or groups to
induce or influence the beliefs or actions of
other persons or groups.
Authority is the right in a position to exercise
discretion in making decisions affecting others.

Bases of Power
1.

2.

3.

Legitimate Power
It normally arises from and derives from our cultural
system of rights, obligations, and duties whereby a
“position” is accepted by people as being
“legitimate”.
Expertness of a person or a group
This is the power of knowledge. Physicians,
lawyers, and university professors may have
considerable influence on others because they are
respected for their specialized knowledge.
Referent Power
It is an influence that people or groups may exercise
because people believe in them and their ideas.

Bases of Power
4.

Reward Power
It refers to the power that arises from the
ability of some people to grant rewards.

5.

Coercive Power
It is the power to punish, whether by
firing a subordinate or by withholding a
merit pay increase.

Line / Staff Concepts and
Functional Authority
1.

Scalar principle
“The clearer the line of authority, the clearer will be the
responsibility for decision making and the more effective
will be organizational communication.”

2.

Line authority
The relationship in which a superior exercises direct
supervision over a subordinate.

3.

Staff relationship
It’s nature is advisory.

Decentralization of Authority
Decentralization is the tendency to
disperse decision-making authority in
an organized structure.

Delegation of Authority
Authority is delegated when a superior
gives a subordinate discretion to make
decisions.
Clearly, supervisors cannot delegate
authority they do not have, whether they
are members, presidents, vice presidents,
or supervisors.

Delegation of Authority
The process of delegation involves:
1. Determining the results expected from a
position
2. Assigning tasks to the position
3. Delegating authority for accomplishing
these tasks
4. Holding the person in that position
responsible for the accomplishment of the
tasks.

The Art of Delegation
Personal Attitudes toward Delegation
Receptiveness
An underlying attribute of managers who will
delegate authority is a willingness to give
other people’s ideas a chance.
Decision making always involves some
discretion, and a subordinate’s decision is not
exactly the one a superior would have made.

Willingness to let go
A manager who will effectively delegate authority
must be willing to release them to make decisions
to subordinates.
A major fault of some managers who move up the
executive ladder—or of the pioneer who has built
a large business from the small beginning of, say, a
garage machine shop—is that they want to
continue making decisions for the positions they
have left.

Willingness to allow mistakes by subordinates
Although no responsible manager would sit idly by and let
a subordinate make a mistake that would endanger the
company or the subordinate’s position in the company,
continual checking on the subordinate to ensure that no
mistakes are ever made will make true delegation
impossible.
Since everyone makes mistakes, a subordinate must be
allowed to make some, and their cost must considered an
investment in personal development.

Willingness to trust subordinates
Superiors have no alternative to trusting their
subordinates, for delegation implies a trustful attitude
between them.
Willingness to establish and use broad controls
Since superiors cannot delegate responsibility for
performance, they should not delegate authority unless
they are willing to find means of getting feedback, that
is, of assuring themselves that authority is being used to
support enterprise or departmental goals and plans.

Three (3) Elements of Delegation
1. Responsibility – means that a person is assigned

a task that he or she is supposed to carry out.

2. Authority – means that the person has the power
and the right to give orders, draws upon resources,
and do whatever else is necessary to fulfill the
responsibility.
3. Accountability – means that the subordinate’s
manager has the right to expect the subordinate to
perform the job and to take corrective action in
the event the subordinate fails to do so.

Recentralization of Authority and
Balance as the Key to Decentralization
Recentralization is centralization of
authority that was once decentralized;
normally not a complete reversal of
decentralization, as the authority delegated
is not wholly withdrawn.

Staffing
It is defined as filling, and keeping filled, positions in
the organizational structure.
Work specialization – degree to which the work
necessary to achieve organizational goals is broken
down into various jobs.
Job design – specification of task activities
associated with a particular job (e.g. a job as an
administrative assistant may include typing, filing and
photocopying, or it could involve such activities as
coordinating travels and meetings, investigating
trouble spots, and making decisions about a certain
range of issues).

Staffing
Approaches to Job Design
Job simplification – the process of designing jobs so that
jobholders have only a small number of narrow activities
to perform.
Job rotation – practice of periodically shifting workers
through a set of jobs in a planned sequence.
Job enlargement – the allocation of a wider variety of
similar tasks to a job in order to make it more challenging.
Job enrichment – process of upgrading the job-task
mix in order to increase significantly the potential for
growth, achievement, responsibility, and recognition.

Movement of Personnel
RECRUITMENT is the process of encouraging,
inducing, or influencing applicants to apply for a certain
vacant position.
SELECTION is the process of getting the most qualified
applicant from among different job seekers.
TRAINING is the systematic development of the
attitude/knowledge/behaviour patterns for the adequate
performance of a given job or task.
TRANSFER refers to the shifting of an employee from
one position to another without increasing his duties,
responsibilities, or pay.
PROMOTION refers to the shifting of an employee to a
new position to which both his status and
responsibilities are increased.

Movement of Personnel
OUTPLACEMENT is the process of helping people who have been
dismissed from the company to regain employment elsewhere.
LAY-OFF is a type of separation, temporary and involuntary, usually
traceable to a negative business condition
DISCHARGE is a permanent separation of an employee, at the will
of an employer, if a person is not competent in his job, guilty of
breaking rules like delinquency and insubordination, and other
violations
RESIGNATION is voluntary and permanent separation of an
employee due to due to low morale, low salary, etc.
RETIREMENT can either be voluntary or involuntary; if an
employee retires upon reaching the number of years of services in a
company as provided for by its policies or upon reaching the age of 65.
PERFORMANCE APPRAISAL is the process of defining,
measuring, evaluating, and recording expectations from employee
performance.
Jonathan S. Bio 2010

Directing/Leading

E.S. BIO
SOURCE: MANAGEMENT - A GLOBAL PERSPECTIVE
BY WEIHRICH AND KOONTZ 11TH EDITION

Leading/Directing
It is defined as the process of influencing people
so that they will contribute to organizational and
group goals.
Managing requires the creation and
maintenance of an environment in which
individuals work together in groups toward
the accomplishment of common objectives.
The manager’s job is not to manipulate people
but, rather, to recognize what motivates
people.

Human Factors in Managing
Through the function of leading, managers
help people see that they can satisfy their
own needs and utilize potential while
contributing to the aims of the enterprise.
Managers should thus have an
understanding of the roles assumed by
people and the individuality and
personalities of people.

Multiplicity of Roles
Individuals are much more than a productive
factor in management’s plans.
They are members of social systems of many
organizations; they are consumers of goods and
services, schools, churches, trade associations, and
political parties.
In these different roles, they establish laws that
govern managers, ethics that guide behavior, and a
tradition of human dignity that is a major
characteristic of our society.

No Average Person
People act in different roles, but they are also
different themselves.
There is no average person.
It is equally important to acknowledge that
individuals are unique—they have different
needs, different ambitions, different attitudes,
different desires for responsibility, different levels
of knowledge and skills, and different potentials.

The Importance of Personal Dignity

The concept of individual dignity
means that people must be treated
with respect, no matter what their
position is in the organization.

Consideration of the Whole Person
We cannot talk about the nature of people unless
we consider the whole person, not just
separate and distinct characteristics such as
knowledge, attitude, skills, or personality traits.
A person has them all to different degrees.
The human being is a total person affected by
external factors.
People cannot divest themselves of the impact of
these forces when they come to work.
Managers must recognize these facts and be
prepared to deal with them.

Motivation

It is a general term applying to the
entire class of drives, desires, needs,
wishes, and similar forces.

Motivation Models/Theories
1.

McGregor’s Theory X and Theory Y
Two sets of assumptions about the nature of
people.
Theory X is pessimistic, static, and rigid.
Control is primarily external, imposed on
the subordinate by the superior.
In contrast, Theory Y is optimistic, dynamic,
and flexible, with an emphasis on selfdirection and the integration of individual
needs with organizational demands.

2.

Maslow’s
Hierarchy of
Needs Theory
When one set of
needs is satisfied,
this kind of need
ceases to be a
motivator.


3.

Alderfer’s ERG Theory
People are motivated by existence needs
(similar to Maslow’s basic needs),
relatedness needs (pertaining to
satisfactorily relating to others), and growth
needs (referring to self-development,
creativity, growth, and competence).

4. Herzberg’s Motivation-Hygiene

Theory
Dissatisfiers, also called maintenance,
hygiene, or job-context factors, are not
motivators, while satisfiers are
motivators and are related to job
content.

Maintenance factors

Motivators



5.

The Expectancy Theory of Motivation
People will be motivated to do things to
reach a goal if they believe in the worth of
the goal and if they can see that what they
do will help them in achieving it.

6.

The Porter and Lawler Motivation
Porter and Lawler’s
Model
motivation model

Value of
rewards

Perceived
Equitable
rewards

Ability to do a
specified task

Intrinsic
rewards

Satisfaction

Performance
accomplishment

Effort

Extrinsic
rewards
Perception of
task required

Perceived effort
and reward
probability
Adapted from L. W. Porter and E. E. Lawler, Managerial Attitudes and Performance (Homewood, IL: Richard D. Irwin, Inc.,
1968), p. 165.

7.

Equity Theory
Motivation is influenced by an individual’s
subjective judgment about the fairness of the
reward he or she gets, relative to the inputs,
compared with the rewards of others.
Equity Theory

Inequitable
reward

Balance or
imbalance
of rewards

Equitable
reward

More than
Equitable
reward

Dissatisfaction
Reduced
output
Departure from
organization

Continuation
at same level
of output

Harder work
Reward
discounted

8. Goal Setting

Theory for
Motivation
For objectives to be
meaningful, they must
be clear, attainable,
and verifiable;
SMARTly
formulated.

Objective setting for
motivation

Planning
Actions

Control
and
Appraisal


9.

Skinner’s Reinforcement Theory
Individuals can be motivated by proper
design of their work environment and
by praise for their performance, while
punishment for poor performance
produces negative results.


10. McClelland’s Needs Theory of

Motivation
The basic motivating needs are the need
for power, the need for affiliation,
and the need for achievement.

Special Motivational Techniques
1.

Money
It is often more than monetary value; it can also mean
status or power, or other things.

2.

Intrinsic Rewards
It may include a feeling of accomplishment and selfactualization.

3.

Extrinsic Rewards
Include benefits, recognition, status symbols, and
money.

4.

Pay
It may be based on individual, group, and
organizational performance.

Leadership

Leadership is the art or process of
influencing people so that they will strive
willingly and enthusiastically toward
the achievement of group goals.

Ingredients of Leadership

1.
2.
3.
4.
5.

Power
A fundamental understanding of people
The ability to inspire followers to apply
their full capabilities
The leader’s style
The development of a conductive
organizational climate

Trait Approaches to Leadership
Many studies of traits have been made. Ralph M.
Stogdill found that various researchers had
identified specific traits related to leadership
ability: 5 physical traits (such as energy,
appearance, and height), 4 intelligence and
ability traits, 16 personality traits (such as
adaptability, aggressiveness, enthusiasm, and
self-confidence), 6 task-related characteristics
(such as achievement drive, persistence, and
initiative), and 9 social characteristics (such as
cooperativeness, interpersonal skills, and
administrative ability).

Charismatic Leadership Approach
Done by Robert J. House. He and other authors indicate
that charismatic leaders may have certain
characteristics, such as:
being self-confident,
having strong convictions,
articulating a vision,
being able to initiate change,
communicating high expectations,
having a need to influence followers and supporting them,
demonstrating enthusiasm and excitement, and
being in touch with reality.

Leadership Behavior and Styles

Leadership based on the use of authority
2. The Managerial Grid
3. Leadership involving a variety of styles,
ranging from a maximum to a minimum
use of power and influence
1.

Styles Based on Use of Authority
1.

Autocratic Leader
He commands and expects compliance, is
dogmatic and positive, and leads by the ability
to withhold or give rewards and punishment.

2.

Democratic, or Participative Leader
He consults with subordinates and encourages
their participation.

3.

Free-rein Leader
He uses power very little, if at all, giving
subordinates a high degree of independence.

Styles Based on Use of Authority

The Managerial Grid
A well-known approach to defining leadership
styles is the managerial grid, developed decades
ago by Robert Blake and Jane Mouton.
The managerial grid has two dimensions: concern
for people and concern for production.
Blake and Mouton recognizes four extremes of
style: the 1.1 style, the 9.9 style, the 1.9 style,
and the 9.1 style.

Situational, Contingency, Approaches to
Leadership
1.

Fiedler’s Contingency Approach to
Leadership
People become leaders not only because of
their personality attributes but also
because of various situational factors
and the interactions between leaders and
group members.

Leadership
2.

The Path-Goal Approach to Leadership
Effectiveness
The main function of the leaders is to clarify
and set goals with subordinates, help
them find the best path for achieving the
goals, and remove the obstacles.

Leadership
Path-goal approach to leadership effectiveness

Characteristics
of
Subordinates

Functions of
the leader

Leader
behavior

Work
environment

Motivated
subordinates

Effective
organization

Communication

It is the transfer of information
from a sender to a receiver, with the
information being understood by the
receiver.

The Purpose of Communication
1.
2.
3.
4.
5.

6.

To establish and disseminate the goals of
an enterprise.
To develop plans for their achievement.
To organize human and other resources
in the most effective and efficient way.
To select, develop, and appraise members
of an organization.
To lead, direct, motivate, and create a
climate in which people want to
contribute.
To control performance.

Communication in an Organization
1.

Downward Communication
It flow from people at higher levels to those at
lower levels in the organizational hierarchy.

2.

Upward Communication
Travels from subordinates to superiors and
continues up the organizational hierarchy.

3.

Crosswise Communication
It includes the horizontal flow of information,
among people on the same or similar
organizational levels, and the diagonal flow of
information which is among people at different
levels who have no direct reporting relationships with
one another.

Communication in an Organization

Written, Oral, and
Nonverbal Communication

1.

Written Communication
French managers are almost obsessed
with the use of written
communication, not only for formal
messages but also for informal notes. A
French manager stated that something
has no reality unless it is written
down.

Written, Oral, and
2.

Oral Communication
Oral communication can occur in a face-to-face meeting of
two people or in a manager’s presentation to a large
audience, it can be formal or informal, and it can be planned
or accidental.
The principal advantage of oral communication is that it
makes possible speedy interchange with intermediate
feedback. People can ask questions and clarify points. In a
face-to-face interaction, the effect can be noted.
However, oral communication also has disadvantages. It
does not always save time, as any manager knows who has
attended meetings in which no results or agreements
were achieved. These meeting can be costly in terms of
time and money.

Written, Oral, and
3.

Nonverbal Communication:
Facial
Gestures
Postural

What a person says can be reinforced (or contradicted) by nonverbal
communication such as facial expressions and body gestures.
Nonverbal communication is expected to support the verbal, but
it does not always do so. An autocratic manager may pound a fist on the
table while announcing that from now on participative management will be
practiced; such contradictory communications will certainly create a
credibility gap.
Similarly, managers may state that they have an open-door policy, but
then they may have a secretary carefully screen people who want to
see them; this creates incongruence between what they say and what they do.
This is an illustration of “noise” in the communication process model.

Communication Methods
There are different methods and channels for communication: some
are oral, some are written, and some use information technology.

Technology is used for certain types of communication, such as wired
and wireless telephone, fax, voice mail, e-mail, as well as
teleconference and videoconference.
Some of the advantages and disadvantages of various types of
communication, include speed of feedback, ease of use, cost and time,
as well as formality and informality.
You probably do not want to invite an honored guest by email. On the other hand, for informal communication and if time is of
the essence—and technology is available–-you may want to use e-mail
rather than “snail mail” (regular mail).

Tips for Improving Written
Communication
Use simple words and phrases.
Use short and familiar words.
Use personal pronouns (such as “you”) whenever appropriate.
Give illustrations and examples; use charts.
Use short sentences and paragraphs.
Use active verbs, such as “The manager plans…”
Avoid unnecessary words.

Tips for Improving Oral Communication
Communicate with a large audience as you would do in a one-to-one
conversation.
Tell a story, an anecdote, and give examples.
Pause—do not rush. In a discussion, a pause shows that you are
listening.
Use visual aids such as diagrams, charts, overhead slides, and
computer graphic presentations.
Communicate confidence and create trust. This can be done by strong
and clear voice, good posture, and a smile.
Use a colorful, specific language and show through your body
language that you are confident and are in command of the situation.
Jonathan S. Bio 2010

CONTROLLING
E.S. BIO

Source: Management - A Global
Perspective
by Weihrich and Koontz 11th Edition

CONTROLLING
The process of measuring
progress toward planned
performance and, if necessary,
applying corrective measures
to ensure that performance is
on the line with manager’s
objectives.

CONTROLLING
PROCESS
1.
2.
3.

4.

Setting performance
standards
Measuring actual performance
Comparing performance with
the standard vs. actual, and
determining deviations
Remedying unfavorable
deviation by taking corrective
action

ESTABLISHMENT OF
STANDARDS
Standards are simply criteria of
performance.
They are selected points in an entire
planning program, at which
measures of performance are made
so that managers can receive signals
about how things are going and
thus, do not have to watch every
step in the execution of plans.

MEASUREMENT OF
PERFORMANCE
If standards are clearly &
objectively established and made
known to the performer of a job, then
measurement of performance
becomes easy.
The most common means of
measurement are: personal
observations, use of statistical data
and reports, both oral and written.

CORRECTION OF
DEVIATIONS
Managers may correct deviations by:
1.
2.
3.
4.
5.
6.

Redrawing their plans or modifying their
goals;
Exercising their organizing function through
reassignment or clarification of duties;
Additional staffing;
Better selection and training of subordinates;
Ultimate re-staffing measure—firing;
Better leading—fuller explanation of the job
or more effective leadership techniques.

TYPES OF CRITICAL POINT
STANDARDS
1.

Physical Standards
Nonmonetary measurements and are
common at the operating level, where
materials are used, labor is employed,
services are rendered, and goods are
produced.
May reflect quantities, or qualities;
such as labor-hours per unit of output
and fastness of a color, respectively.

TYPES OF CRITICAL
POINT STANDARDS
2.

Cost Standards
Monetary values & measurements
and, like physical standards, are
common at the operating level.
Illustrative of cost standards widely
used are: direct and indirect costs per
unit produced and labor cost per unit
or per hour. ( $5/#; Php380/day; etc…)

TYPES OF CRITICAL
POINT STANDARDS
3.

Capital Standards
Application of monetary
measurements to physical items.
Have to do with the capital invested
in the firm rather than with operating
costs, and are therefore primarily
related to the balance sheet rather
than to the income statement.

TYPES OF CRITICAL
POINT STANDARDS
4.

Revenue Standards
Arise from attaching monetary
values from sales.
May include such standards as
revenue per bus passenger-mile,
average sales per customer, and
sales per capita in a given market
area.

TYPES OF CRITICAL
POINT STANDARDS
5.

Program Standards
A manager may be assigned to install a
variable budget program, a program
for formally following the
development of new products, or a
program improving the quality of
a sales force.
Although some subjective judgment
may have to be applied in appraising
program performance, timing and
other factors can be used as objective
standards.

TYPES OF CONTROL
1.

Preliminary Control (sometimes called
feed forward control) – takes place
before operations begin and includes
policies, procedures, and rules designed
to ensure that planned activities are
carried out properly.

Ex. Inspection of raw materials, proper
selection and training of employees

TYPES OF CONTROL
2.

3.

4.

Concurrent Control – takes place
while plans are being carried out.
Ex. directing, monitoring
Feedback Control – focuses on
the use of information about results
to correct deviations from the
acceptable standard after they
arise.
Multiple Approaches Control

MANAGEMENT AUDITS
They are means for evaluating the
effectiveness and efficiency of various
systems within the organization, from
social responsibility to accounting
control.

BUDGETING
Budgeting (or budgetary
control) – the process of finding
out what’s being done and
comparing the results with
corresponding budget data to
verify accomplishments or to
remedy differences.

TYPES OF BUDGET
1.

2.

3.

Sales Budget
Usually data for the sales budget that are
prepared by month, sale area, and product.
Production Budget
Commonly expressed in physical units,
required information include types and
capacities of machines, economic quantities to
produce, and availability of materials.
Cost Production Budget
Information is sometimes included in
production budgets, comparing production
cost with sales price shows whether or not
profit margins are adequate.

TYPES OF BUDGET
4. Cash Budget
Prepared after all other budget estimates
are completed, shows the anticipated
receipts and expenditures, the amount of
working capital available, the extent to
which outside financing may be required,
and the periods and amounts of cash
available.

5. Master Budget
Includes all major activities of the business,
brings together and coordinates all the
activities of the other budgets and can be
thought of as a “budget of budgets”.

FINANCIAL CONTROL –
FINANCIAL STATEMENTS
It shows the financial picture of a company at a
given time. Itemizes 3 elements:
1.
2.
3.

Assets – values of the various items the
corporation owns.
Liabilities – amounts the corporation owes to
various creditors.
Stockholder’s Equity – amount accruing to the
corporation’s owners.

Balance Sheet Equation:
Assets = Liabilities + Stockholder’s Equity

Profit and Loss Statement
An itemized financial statement of the income and
expenses of the company’s operations during the
accounting period.

BALANCE SHEET – AN EXAMPLE
New Creations Landscaping
Consolidated Balance Sheet
December 31, 2007
Assets
Current assets:
Cash
Accounts receivable
Inventory
Total current assets
Fixed assets:
Land
Buildings and fixtures
Less depreciation
Total fixed assets

Liabilities and Owners' Equity
$25,000
75,000
500,000
$600,000

Current liabilities:
Accounts payable
Accrued expenses
Income taxes payable
Total current liabilities
Long-term liabilities:
Mortgages payable
Bonds outstanding

250,000
1,000,000
200,000
1,050,000

Total long-term liabilities
Owners' equity:
Common stock
Retained earnings
Total owners' equity

Total assets

$1,650,000

Total liablities and net worth

$200,000
20,000
30,000
$250,000

350,000
250,000
$600,000
540,000
260,000
800,000

$1,650,000

INCOME STATEMENT – AN
EXAMPLE
Gross sales
Less sale returns
Net sales
Less expenses amd cost of good sold
Cost of goods sold
Depreciation
Sales expenses
Administrative expenses
Operating profit
Other income
Gross income
Less interest expense
Income before taxes
Less taxes
Net income

New Creations Landscaping
Statement of Income
For the Year Ended December 31, 2007
$3,100,000
200,000

2,110,000
60,000
200,000
90,000

2,900,000

2,460,000
440,000
20,000
460,000

80,000
380,000
165,000
$215,000

CHARACTERISTICS OF AN
EFFECTIVE CONTROL
SYSTEM
1.

Valid Performance Standards
Standards should be expressed in
quantitative terms, should be objective
rather than subjective.

2.

Adequate Information to Employees
Information should be accessible as possible,
particularly when people must make
decisions quickly and frequently.

3.

Acceptability to Employees
Control systems should emphasize positive
behavior rather than trying to control
negative behavior alone.

The Changing Environment of
Management

Prepared by:
Prof. Emilia. S. Bio
Source:
Principles of Management
by Krietner, 11th Edition

The Changing Workplace
• Young people from age 18-25 (better known as
Generation Y) comprise most of companies’
workforces.
• This growing trend tends to create a brewing conflict
of work ethics with the older higher-ups of the
management.
• Demands for Gen Y greatly exceeds supply; hence,
they are in a strong position to dictate terms to their
prospective employers.

“The best way to predict the future is to create it.”
-Alan Kaye

• Companies successfully integrating members of the
new generation in to their operations do more than
merely cope with change; they thrive on it.
• Accordingly, present and future managers need to
be aware of how things are changing in the world
around them.
• To aid in further understanding these, we must study
the demographics of the new workforce.

-Alan Kaye

The Social Environment
• Demographics are statistical profiles of population
charateristics.
• These are a valuable tool for managers; those with
foresight who study demographics can make
appropriate adjustments in their strategic, human
resource, and marketing plans.

-Alan Kaye

The Changing Workforce

-Alan Kaye

The Changing Workforce
• In summary, the U.S. workforce demonstrates the
following trends:
– It is getting larger.
• The workforce will be expected to grow more than the national
population. The resulting labor shortage will continue to be
magnet for legal and illegal immigration.

– It is becoming increasingly female.
– It is becoming more racially and ethnically diverse.
– It is becoming older.
• This applies to the Gen Y people that are continuing to stabilize
the median age to 39 years old.
“Knowledge is entry ticket to today’s computerized service
economy.”
-Modern adage

Myths about Older Workers
• Myth: Older workers are less productive than the
average worker.
• Fact: Research shows that productivity does not
decline with age. Older employees perform as
well as younger workers in most jobs.
Moreover, older workers meet the
productivity expectations.

economy.”
-Modern adage

• Myth: The costs of employee benefits outweigh any
possible gain from hiring older workers.
• Fact: The costs of health insurance increase with
age, but most other fringe benefits do not,
because they are tied to length of service and
level of salary.

economy.”
-Modern adage

• Myth: Older workers are prone to frequent absences
because of age-related infirmities and aboveaverage rates of sickness.
• Fact: Data show that workers age 65 and over have
attendance record equal to or better than
most other age groups of workers. Older
people who are not working may have
dropped out of the workforce because of their
health. Older workers who stay in the labor
force may well represent a self-selected
healthier group of older people.
economy.”
-Modern adage

• Myth: Older workers have an unacceptably high
rates of accidents at work.
• Fact: Data show that older workers account for only
9.7 percent of all workplace injuries, whereas
they make up 13.6 percent of the labor force.

economy.”
-Modern adage

A New Social Contract Between
Employer and Employee
• Until the 1970’s: “Be loyal to the company and the
company will take care of you until retirement.”
• Today: The employer-employee relationship will be a
shorter-term one based on convenience and mutual
benefit, rather than for life.
“There was a time when someone would come to the front
door of AT&T and see and invisible sign that said, AT&T: a job
for life… That’s over. Now it’s a shared kind of thing. Come to
us. We’ll invest in you, and you invest in us. Together, we’ll
face the market, and the degree to which we succeed will
determine how things work out.”
-Harold Burlingame, AT&T Senior VP of HR

Under The Glass Ceiling
• According to a recent study, lifetime earnings for
women in the U.S. equal, on average, 44 percent of
the lifetime earnings for their male counterparts.
• As such, the gender pay gap can be summed up in
two words: large and persistent.
• In addition to suffering a wage gap, women (and
other minorities) bump up against the so-called glass
ceiling when climbing the managerial ladder.
glass ceiling: the transparent but strong barrier keeping women
and minorities from moving up the management barrier

Part-timer Promises and Problems
• An increasing percentage of the U.S. (and the
Philippines) labor force is now made up of
contingent workers.
• This “just-in-time” or “flexible” workforce includes a
diverse array of part-timers, temporary workers, oncall employees, and independent contractors.
• Their common denominator is that they do not have
a long-term implicit contract with their ultimate
employers, the purchasers of the labor they provide.
contingent workers: part-timers and other employees who do not
have a long-term implicit contract with their ultimate employers

Part-timer Promises and Problems
• Employees are relying more on part-timers for two
basic reasons:
– First, they are paid in lower rates and often do not receive
the full range of employer-paid benefits, part-timers are
much less costly to employ than full-time employees.
– Second, as a flexible workforce, they can be let go when
times are bad, without the usual repercussions of a geneal
layoff.

contingent workers: part-timers and other employees who do not
have a long-term implicit contract with their ultimate employers

The Politicization of Management
• Prepared or not and willing or not, today’s managers
often find themselves embroiled in issues with
clearly political overtones.
• As in the case of Google:
The online search giant is taking a novel approach to the
problem by asking U.S. trade officials to treat Internet
restrictions as international trade barriers, similar to other
hurdles to global commerce, such as tariffs.
Google sees the dramatic increase in government Net
censorship, paritcularly in Asia and the Middle East, as a
potential threat to its advertising-driven business model, and
wants government officials to consider the issue in economic,
rather than just polictical terms.

The Current Job Outlook in Today’s
Service Economy
• As in other important aspects of life, you have no
guarantee of landing your dream job. However, as
you move on through college and into the labor
force, you will probably end up with a job in the
service sector.
Occupations that require a bachelor’s degree are projected to
grow the fastest, nearly twice as fast as the average for all
occupations. All of the 20 occupations with the highest
earnings require at least a bachelor’s degree… Education is
essential in getting a high paying job.

“Education is essential in getting a high paying job.”
-U.S. Bureau of Labor Statistics

Coping with Business Cycles:
Cycle-senstitive Decisions
• The business cycle is the up-and-down movement of
an economy’s ability to generate wealth; it has
predictable structure but variable timing.
• Important decisions depend on the ebb and flow of
the business cycle. These decisions include ordering
inventory, borrowing funds, increasing staff, and
spending capital for land, equipment, and energy.

“Timing is everything.”
-Popular business adage

The Business Cycle

“Timing is everything.”
-Popular business adage

International Management and
Cross-Cultural Competence

Prepared by:
Source:
Principles of Management
by Krietner, 11th Edition

The Global Economy:
A Brief History
• It was in 1571 that modern global commerce began.
That year, the Spanish empire founded the city of Manila
in the Philippines to receive its silver-laden galleons that
made their way across the vast Pacific Ocean from the
New World.
• The metal was bound not for Spain, but for imperial
China. For the first time, all of the world’s populated
continents were trading directly—Asia with the Americas,
Europe, and Africa. They were highly interdependent:
when silver depreciated in later decades, worldwide
inflation ensued.

“I’ve always thought of travel as a university without walls.”
-Anita Roddick, Founder of The Body Shop

The Global Economy
• Like any other productive venture, an
international corporation must be effectively and
efficiently managed. Consequently,
international management, the pursuit of
organizational objectives in international and
intercultural settings, has become an important
discipline.

“Managing the global enterprise and modern business
management have become synonymous.”
-Nancy Adler

Global Organizations for a Global
Economy

Global and Transnational
Companies
• The difference between these two types of international
ventures is the difference between actual and theoretical.
That is to say, transnational companies are evolving
and represent a futuristic concept. Meanwhile, global
companies do business in many countries
simultaneously.
• By definition:
– Global Company: a multinational venture centrally managed
from a specific country.
– Transnational Company: a futuristic model of a global,
decentralized network with no distinct
national identity.

-Alan Kaye

Global and Transnational
Companies
• Desktopfig7.TIF

Corporate Giants Worldwide

-Alan Kaye

Culture by Focus
• People in individualistic cultures focus primarily on
individual rights, roles, and achievements. The
United States and Canada are highly individualistic
cultures.
• People in collectivist cultures—such as Egypt,
Mexico, India, and Japan—rank duty and loyalty to
family, friends organization, and country above selfinterests. Group goals are shared achievements are
paramount to collectivists; personals goals and
desires are suppressed.

-Alan Kaye

Time
•
•

It is the silent language of culture.
It can be distinguished into:
1.

Monochronic Time
–

–

2.

It is based on the perception that time is a
unidimensional straight line divided into standard units,
such as seconds, minutes, hours, and days.
Everyone is assumed to be on the same clock, as
such, it adopts the concept of “Time is Gold.”

Polychronic Time
–

It involves the perception of time as flexible, elastic,
and multidimensional. Managers tend to view
schedules and deadlines in relative rather thana
absolute terms.

Competencies Needed to Work
Effectively Across Cultures
• Desktopfig7.TIF

-Alan Kaye

Management’s Social and Ethical
Responsibilities

Prepared by:
Source:
Principles of
Management by Krietner,
11th Edition

• As the social, political, economic, and
technological environments of
management have changed, the practice
of management itself has changed. This is
especially true for managers in the private
business sector.

“I find a universal belief in fairness, kindness, dignity, charity,
integrity, honesty, quality, and patience.”
-Stephen R. Covey

• Today, it is far less acceptable for someone in
business to stand before the public and declare
that his or her sole job is to make as much profit
as possible.
• The public is wary of the abuse of power and the
betrayal of trust, and business managers—
indeed, managers of all types of organizations—
are expected to make a wide variety of
economic and social contributions.
-Stephen R. Covey

• Demands on business that would have been
considered patently unreasonable 30 or 40
years ago have become the norm today.
“The future is that there will be no letup in the demands of
shareholders for financial performance. There will also be
no letup in the demands of society that businesses behave
responsibly. Management just has to better.”
-Stuart Graham, CEO of Skanska

-Stephen R. Covey

Social Responsibility:
Definition and Perspectives

Corporate Social Responsibility
• It is the notion that corporations have an
obligation to constituent groups in society other
than stockholders and beyond that prescribed by
law or union contract.
• In other terms, it is the idea that business has
social obligations above and beyond making a
profit.

-Stephen R. Covey

Carroll’s Global Corporate Social
Responsibility Pyramid

Be ethical

Be a good global citizen

Obey the law

Be profitable

Do what is desired by
global stockholders

Do what is expected by
global stockholders
Do what is required by
global stockholders
Do what is required by
global capitalism

• From the previous figure, global and
transnational companies have four main areas
of responsibility: economic, legal, ethical, and
philanthropic.

-Stephen R. Covey

• Working from bottom to top, this means that the
global corporation should:
Make a profit consistent with expectations for
international businesses
Obey the law of host countries as well as international
law
Be ethical in its practices, taking host-country and
global standards into consideration
Be a good corporate citizen, especially as defined by
the host country’s expectations
-Stephen R. Covey

CSR Requires Voluntary Action
• An implicit feature of the above definition and
perspective is that an action must be voluntary
to qualify as socially responsible.
“All businesses should commit to the triple bottom line—a
measure of corporate success that takes int oaccount not
just profit and loss but also social and environmental
impact.”
-Paul Dolan, “True to Our Roots: Fermenting
a Business Revolution”

-Stephen R. Covey

What is the Role of Business in
Society?
• Much of the disagreement over what social
responsibility involves can be traced to a
fundamental debate about the exact purpose of
a business.
• “Is business an economic entity responsible only
for making a profit for its stockholders? Or is it a
socioeconomic entity obligated to make both
economic and social contributions to society?”

-Stephen R. Covey

The Stockholder Audit—the identification of all
parties that might be affected by the
organization.

(for)
Wal-Mart

Customers
Neighbors of stores
and facilities
(homeowners’
association)
All levels of
domestic and
foreign
government
Domestic and
Foreign suppliers
and distributors

WAL-MART

Stockholders
Public-at-large

Political Parties

Competitors

Stockholders
Financial
Community
(bankers,
brokers, and
investors)

Public-at-large
Political Parties
Customers

Arguments For Social
Responsibility
1.
2.
3.
4.

Business is unavoidably involved in social issues.
Business has the resources to tackle today’s
complex societal problems.
A better society means a better environment for
doing business.
Corporate social action will prevent government
intervention.

-Stephen R. Covey

Arguments Against Social
Responsibility
1.
2.
3.
4.

Profit maximization ensures the efficient use of
society’s resources.
As an economic institiution, business lacks the
ability to pursue social goals.
Business already has enough power.
Because managers are not elected, they are not
directly accountable to the people.

-Stephen R. Covey

Toward Greater Social
Responsibility

The Iron Law of Responsibility
•

Is it inevitable that management will assume
greater social responsibility? Some scholars
believe so. It has been said that business Is bound
by an iron law of responsibility, which states
that “in the long run, those who do not use power
in a way that society considers responsible will
tend to lose it.

-Stephen R. Covey

Who Benefits from Corporate
Social Responsibility?
•

•

Is it accurate to say of social responsibility what
used be said about home medicine, “It has to taste
bad to be good”? In other words, does social
responsibility have to be a hardship for the
organization? Those who answer yes believe that
it should be motivated by altruism, an unselfish
devotion to the interests of others.
This implies that businesses that are not socially
responsible are motivated strictly by self-interest.

-Stephen R. Covey

•

On the basis of evidence alone, one would hard
pressed to say that social responsibility pays. But
research paints a brighter picture:
–

–

A study of 243 companies for two years found a positive
correlation between industry leadership in environmental
protection/pollution control and profitability. The
researchers concluded, “It pays to be green.”
A second study found agood reputation for corporate
social responsibility to be a competitive advantage in
recruiting talented people.

-Stephen R. Covey

•

•

Enlightened self-interest, the realization that
business ultimately helps itself by helping to solve
societal problems, involves balancing short-run
costs and long-run benefits. Advocates of
enlightened self-interest contend that social
responsbility expenditures are motivated by profit.
Research into corporate philanthropy, the
charitable donation of company resources ($12.7
billion in US in 2006), supports this contention.

-Stephen R. Covey

An Array of Benefits for the
Organization
• In addition to the advertising effect, other possible
long-run benefits include:
–
–
–
–
–
–
–

Tax-free incentives to employees.
Retention of talented employees by satisfying their altruistic
motives.
Help in recruiting talented and socially conscious personnel.
Swaying public opinion against government intervention.
Improved community living standards for employees.
Attracting socially conscious investors.
A nontaxable benefit for employees in which company funds
are donated to their favorite causes.

-Stephen R. Covey

The Ethical Dimension of
Management

The Ethical Dimension of
Management
•

Ethics is the study of moral obligation involving the
distinction between right and wrong.
Moral
Immoral
Amoral Managers – managers who are neither moral nor
immoral, but ethically lazy.

•

Business ethics, sometimes referred to as
management ethics or organizational ethics, narrows
the frame of reference to productive organizations.

-Stephen R. Covey

Practical Lessons from
Business Ethics Research
•

Ethical Hot Spots.
–

–

In a survey of 1,324 US employees from all levels across
several industries, 48 percent admitted to having
performed at least one illegal or unethical act from a list
of 25 questionable practices.
The list included everything from calling in sick when
feeling well through cheating on expense accounts,
forging signatures, and giving or accepting kickbacks, to
ignoring violations of environmental laws.

-Stephen R. Covey

Practical Lessons from
Business Ethics Research
•

The top ten workplace hot spots responsible for
triggering unethical conduct are:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Balancing work and family
Poor internal communications
Poor leadership
Work hours, workload
Lack of management support
Need to meet sales, budget, or profit goals
Little or no recognition of achievements
Company politics
Personal financial worries
Insufficient resources

-Stephen R. Covey

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