MGMT1001 NOTES

Chapter 1: Introductions to organisations and

management

Explain why managers are important

Managerial skills and abilities are very important in guiding
organisations through challenging times.
o They are critical to getting things done.
o They monitor progress, and rectify and problems that may
arise in the organisation.
o Further evidence has shown the impact of managers on
organisations:
o Gallup organisation found that the most important variable in
employee productivity and loyalty was not pay or benefits or
even workplace environment, but rather the relationship
between employees and their direct supervisors.
o Towers Watson found that the way a company manages and
engages its people can have a profound effect on the financial
performance of the organisation, although only 42% of the
responders thought their leaders inspired & engaged them.
o Managerial ability is important in creating organisational value

Describe the characteristics of an organisation

o An organisation has 3 key characteristics:
o They have a distinct purpose
o They are composed of people
o They have developed some deliberate structure
The structure can be open and flexible, with no clear
and precise job duties or explicit job arrangements i.e.
it may be a simple network of loose work relationships,
or it could be more traditional, with clearly defined rules,
regulations & job descriptions with some members
defined as bosses who have authority over other
members.
More and more organisational structures have
transformed into the loose network structure in the
recent decades.

Classify managers and non-managerial employees

o A manager is someone who co-ordinates and oversees the work
of other people so that organisational goals can be accomplished.
o Managing is not about achieving personal goals, but rather
about helping others to do their work and achieve.
 o In the modern business environment, it has become harder to
classify managers from non-managerial employees, as many non-
managerial employees can also have managerial roles when
working in teams.
o There are 3 types of managers:
o First-line
Lowest level of management
Manage the work of non-managerial employees
o Middle
All levels of management between the 1st-line & top
level.
Manage the work of 1st line managers
o Top
At or near the top of the organisation
Responsible for making organisation-wide decisions &
establishing the goals/plans that affect the entire
organisation.

Define the terms management, efficiency & effectiveness

o Management is the process of co-ordinating and overseeing the
work activities of others so that their activities are completed
efficiently & effectively.
o Efficiency: Getting the most output from the least amount of inputs
o Effectiveness: Doing the right things, or completing activities so
that organisational goals are attained.

Describe the functions, roles & skills of managers

o 4 key functions
o Planning
Setting goals, establishing strategies for achieving those
goals, & developing plans to integrate & coordinate
activities.
o Organising
Arranging & structuring work that employees do to
accomplish the organisations goals
o Leading
Working with and through people to accomplish
organisational goals
o Controlling
Monitoring, comparing and correcting work
performance.
o CLOP
o Roles (Mintzberg)
o Interpersonal (figurehead, leader, liaison)
 Managerial roles that involve people and other duties
that are ceremonial & symbolic in nature
o Informational (Monitor, Disseminator, Spokesperson)
Managerial roles that involve receiving, collecting, and
disseminating information
o Decisional (Entrepreneur, Disturbance handler, Resource
allocator, Negotiator)
Managerial roles that revolve around making decisions
o DII
o Skills (Katz)
o Technical
Knowledge of & proficiency in a certain specialised field
Most important in first-line managers
o Human
Ability to work well with other people individual & in a
group
Human skills are equally important in all levels of
management.
o Conceptual
Ability to thing and to conceptualise about abstract &
complex situations.
Most important for top managers because they need to
have a helicopter perspective to plan for the future. This
involves dealing with abstract ideas.
o THC
Discuss whether the managers job is universal
o All managers have to plan, lead, organise and control.
o The time they give to each function depends on whether they
are 1st line, middle or top managers.

o
o The differences in the mangers job between different organisational
levels are of degree & emphasis but not function.
o The importance of different managerial roles varies in small & large
firms.
 o Small businesses: Independently owned & operated, profit-
seeking enterprise with less than 20 employees.
o Roles played by managers in small firms in order of
importance:
1. Spokesperson
2. Entrepreneur, Figurehead, Leader
3. Disseminator
o Large firms:
1. Resource allocator
2. Liaison, Monitor, Disturbance handler, negotiator
3. Entrepreneur
o There are some major differences in preferred managerial practises
between countries, which means that, in this area, the managers
job is less universal.

Outline the factors that are reshaping & redefining the managers
job
o Most significant impacts are made by the increasing importance of
customers, social media, innovation & sustainability.
o It has become more important to establish an innovative culture
within organisations
o Maintain sustainability
o companys ability to achieve its own business goals & increase
long-term shareholder value by integrating economic,
environmental & social opportunities into business strategy.
Chapter 2: Evolution of Management Theory
Provide some examples of early management practise
o In 1776, Adam Smith argued the economic advantages that
organisations & society would gain from the division of labour, the
breakdown of jobs into narrow and repetitive tasks (job
specialisation)
o The Industrial Revolution had a strong influence on management.
o Started in 18th century. It was period in which human power
was replaced by machine power, making it more economical
to manufacture goods in factories rather than at home.
o Because of this, managers were required to forecast demand,
ensure enough materials were on hand, assign tasks, direct
daily activity, co-ordinate tasks, ensure machines were kept in
good working condition & that work standards were
maintained. Planning, Organising, Leading & Controlling
became necessary, as large corporations developed.

Discuss the important contributions of scientific management

within the classical approach
Classical approach
o First studies of management, which emphasised rationality &
making organisations & works as efficient as possible.
o Scientific management:
o Main contributors to scientific management theory: Frederick
Taylor and Frank & Lillian Gilbert
o Taylors 4 principles of management:
Develop a science for each element of an individuals
work with standardised work implements & efficient
methods for all to follow
Scientifically select workers with skills and abilities that
match each job and train them in the most efficient
ways to accomplish tasks
Ensure cooperation through incentives, and provide the
work environment that reinforces optimal work results in
a scientific manner
Divide responsibility for managing and for working, while
supporting individuals in work groups doing what they
do best
o Frank & Lillian Gilbert
Studied how to eliminate wasteful hand & body motions
Experimented with the design & use of the proper tools
and equipment for optimising work performance.
First researchers to use motion pictures to study hand-&-
body motions. Frank used these to analyse the motions
 of brick-layers & showed how to reduce the number of
motions in laying exterior & interior bricks from 18 to 5
& 2 respectively.
Invented a device that recorder workers motions &
amount of time spent doing each motion.

Explain the influences of general administrative theorists within

the classical approach
o General administrative theory: An approach to management that
focuses on describing what managers do and what constituted good
management practise
o Henry Fayol: wrote around same time as Taylor:
o Identified 5 functions that mangers perform: Planning,
commanding, coordinating, organising and controlling
o Argued management was an activity common to all human
endeavours in business, government and even in the home
o Outlined 14 principles of management fundamental rules of
management that could be taught in schools & applied in all
organisational situations:
1. Division of work: Specialisation increases output by making
employees more efficient
2. Authority: Managers must to able to give orders.
3. Discipline. Employees must obey & respect the rules that
govern the organisation
4. Unity of command. Every employee should receive orders
from only 1 superior.
5. Unity of direction. Organisation should have a single plan of
action to guide managers & workers.
6. Subordination of individual interests to the general interest:
Interests of any one/group of employees should not take
precedence over the interests of the organisation as a
whole.
7. Remuneration: Workers must be paid fair wages for their
services.
8. Centralisation: Degree to which workers are involved in
decision making.
9. Scalar chain: The line of authority from top management to
the lower ranks
10. Order. People and materials should be in the right place
at the right time
11. Equity: Managers should be kind and fair
12. Stability of tenure of personnel: Management should
provide orderly personnel planning & 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. Espirit de corps: Promoting team spirit will build
harmony and unity
o Weber (early 1900s) developed a theory of authority structures and
relations based on an ideal type of organisation he called a
bureaucracy a form of organisation characterised by division of
labour, a clearly defined hierarchy, detailed rules & regulations,
impersonal relationships and career advancements based on merit.
o Webers bureaucracy is very similar to scientific in its
ideology, as both emphasise rationality, predictability,
impersonality, technical competence and authoritarianism.
o Webers bureaucracy is not as popular today as it was
throughout the 20th century, as the strict rules & regulations,
and impersonal applications of rules and control takes away
the individual employees creativity.
Describe the quantitative approach
o The quantitative approach to management relies on using
quantitative techniques to improve decision making.
o It involves using techniques such as data collection & mathematical
manipulation to improve decision making.
o involves application of statistics, optimisation and information
models, and computer simulations to management activities.
o Total Quality Management: A philosophy of management driven by
continual improvement and responding to customer needs and
expectations.
o Intense focus on the customer
o Concern for continual improvement
o Process focussed
o Improvement in the quality of everything the organisation
does
o Accurate measurement
o Empowerment of employees
o Quantitative approaches are key in management decision areas of
planning and control.
o E.g. budgeting, queuing, scheduling, quality control & similar
decisions
o Availability of sophisticated computer programs to aid in
developing models, equations and formulas has made the use
of quantitative techniques less intimidating for managers, but
they still need to be able to interpret the results
Discuss the development and uses of the organisational
behaviour approach
Organisational behaviour: A field of study concerned with the actions
(behaviours) of people at work.
 o 1800s & early 1900s: Robert Owen, Hugo Munsterberg, Mary
Parker Follett and Chester Barnard had a common belief that people
were the most important asset of the organisation and should be
managed accordingly.
Hawthorne studies: A series of studies during the 1920s and 1930s that
provided new insights into individual and group behaviour.
o Wanted to examine the effect of various illumination levels in the
factory on worker productivity
o Found that both increasing & decreasing illumination levels in the
factory increased worker productivity & so concluded that
illumination intensity was not directly related to group productivity &
something else must be affecting worker productivity.
o 1927-1932: Professor Elton Mayo and his associates joined an OB
study as consultants:
o Concluded that social norms or group standards were the key
determinants of individual work behaviour.
o Mayo concluded that peoples behaviour and attitudes are
closely related, and that group factors significantly effect that
peoples behaviour, that group standards establish individual
worker output and that money is less a factor in determining
output that are group standards, attitudes and security.
o Human relations movement: The belief, for the most part
unsubstantiated by research, that a satisfied worker will be
productive.
o Behavioural science theorists: Psychologists and sociologists who
relied on scientific method for the study of organisational behaviour.
o Maslows Hierarchy of needs:
o Maslow argued that each step in the hierarchy must be
satisfied before the next can be activated, and that once a
need was substantially satisfied, it no onger motivated
behaviour (e.g. for high salary employees, increasing salary
will give less and less motivation)

o
o McGregors 2 theories about human nature:
o Theory X which is pessimistic and negative and is how
scientific managers perceive their workers:
 Average employee is lazy, dislikes work, and will try to
do as little as possible
To ensure that employees work hard, managers should
closely supervise them
Managers should create strict work works and
implement well-defined system of rewards &
punishments to control employees
o Theory Y which is a more modernised approach:
Employees are inherently not lazy employees will do
what is good for the organisation
managers must create a work setting that provides
opportunities for workers to exercise initiative and self-
direction
Managers should decentralised authority & make sure
they have the resources necessary to achieve
organisational goals
Explain the systems and contingency theories in the
contemporary approach
Systems theory
o System: A set of interrelated and independent parts arranged in a
manner that produces a unified whole. A system is either:
o Closed: not influenced by, and do not interact with, their
environment
o Open: dynamically interact with their environment
o This approach sees organisations as an open system: an
organisation takes in inputs (recourse) from the environment and
transforms or processes these resources to outputs that are
redistributed into the environment. Thus, the organisation is open
to and interacts with the environment.
o Systems researchers envisioned an organisation as being made up
of interdependent factors, including individuals, groups, attitudes,
motives, formal structure, interactions, goals, status and authority.
o As managers coordinate the work activities of the various parts of
the organisation, they ensure that all these parts are working
together so that the organisations goals can be achieved.
o Systems theory implies that decisions and actions taken in one
organisational area will affect others, and vice versa, recognises that
organisations are not self-contained (they rely on their environment
for essential and as outlets to absorb their outputs)
Contingency theory
o Says that all organisations are different, face different situations
(contingencies) and so require different ways of managing.
o A single approach to management does not apply to all
organisations.
 o A good way to describe the contingency theory is like: if this is my
situation then this is the best way for me to manage in this
situation.
o Contingency approach to management is intuitively logical.
o Popular contingency variables
o Organisation size
o Routines of task technology
o Environment uncertainty
o Individual differences
Provide examples of current trends and issues that are
influencing management today
Globalisation
o The workforce has become more and more diverse in the recent
decades, which means that the values of individuals within a
workforce are becoming more and more diverse.
o Due to cultural differences, there may be differences in motivation,
preferred communication style and many other factors within a work
force.
o Thus, to work effectively with a group of diverse people, we need to
be aware of how their culture, geography and religion have shaped
their values, attitudes and beliefs, and adjust our management style
accordingly.
o Management practises need to be modified to reflect the values of
different countries in which an organisation operates.
o Globalisation has also resulted in service-intensive economies of
countries such as Australia and NZ to become vulnerable to outflows
of information-based jobs and unskilled jobs to countries such as
India and Philippines where the labour cost is considerably lower.
o Such moves have been criticised by both unions & customers, and
the implication for managers is that they need to be prepared to
deal with the difficult task of balancing the interests of their
organisation (minimising costs) with their responsibilities to the
communities within which they operate.
Ethics
o ETHICS vs SELF-INTEREST
o Managers are continually faced with situations in which they have to
make ethical decisions.
o In the past, there have been cases where managers have
established Cartels with other managers the act of colluding to fix
prices. This raised the profits of both the organisations, leading to
higher incomes for the managers but had a negative impact on the
wider society as a whole.
Workforce diversity
o A workforce that is more heterogeneous in terms of gender, race,
ethnicity, age and other characteristics that reflect differences.
 o Having a more diverse workforce increase the flow of ideas.
o The workforce is also aging.
o Workforce diversity has become a more current issue facing
managers because diverse individuals only made up a small
percentage of the workforce.
o More women in the workforce now.
Entrepreneurship
o Process whereby an individual or a group of individuals uses
organised efforts and means to pursue opportunities to create value
and grow by fulfilling wants and needs through innovation and
uniqueness, no matter what resources are currently controlled.
o Important themes in the definition of entrepreneurship:
- Pursuit of opportunities
- Innovation
- Growth
Learning organisation and knowledge management
o Leaning organisation: have developed the capacity to learn, adapt
and change continuously
o Knowledge management: Cultivating a learning culture where
organisational members systematically gather knowledge and share
it with others in the organisation so as to achieve better
performance.
Sustainability
o The responsibility of all organisations to ensure that their operations
use all forms of capital human, natural and financial in such a
way that all stakeholders receive value, and that the capital required
by future generations is maintained.
o Focus is not just on profits anymore but also businesses ability to
maximise environmental, social and economic sustainability.
o Studies have shown that some of the organisations who followed
this approach discovered that waste reduction, energy efficiency,
pollution prevention and a better social engagement with the
communities actually made economic sense.
Chapter 3: Attitudes, perception and personality
Identify the focus and goals of organisational behaviour
o Organisational behaviour is concerned with the actions (behaviours)
of people at work
o OB focusses on 2 main areas:
1. Individual behaviour
o Attitudes, personality, perception, learning and motivation
2. Group behaviour
o Norms, roles, team building and conflict.
o Goals of OB
- To explain, predict and influence behaviour

Describe the six important employee behaviours that managers

want to explain, predict and influence
1. Employee productivity
A performance measure of both efficiency and effectiveness
2. Absenteeism
The failure to report to work
3. Turnover
The voluntary and involuntary permanent withdrawal from an
organisation
4. Organisational citizenship behaviour
Discretionary behaviour that is not part of an employees
formal job requirements, but that nevertheless promotes the
effective functioning of the organisation.
5. Job Satisfaction
An employees general attitude towards his or her job
An attitude rather than a behaviour, but the level of job
satisfaction affects other behaviours (productivity,
absenteeism, OCB)
6. Workplace misbehaviour
Any form of intentional behaviour that has negative
consequences for the organisation or individuals within the
organisation

Explain the role that attitudes play in job performance

o Attitudes are evaluative statements, either favourable or
unfavourable, concerning objects, people or events.
o 3 components to an attitude:
1. Cognitive
o Refers to beliefs, opinions, knowledge and information held
by a person
2. Affect
o Part of an attitude that is the emotional or feeling part
3. Behaviour
o Refers to an intention to act in a certain way towards
someone or something
 o Note that the term attitude only refers to the affective component.

Summary table
Cognition Beliefs and opinions Discrimination is
wrong
Affect Feelings and emotions I dont like Matt
because he
discriminates against
women.
Behaviour Intention Im going to avoid
Matt.

4 job related attitudes and their impacts on job performance are:

1. Job Satisfaction
Productivity higher job satisfaction generally results in
higher productivity
Absenteeism research has shown satisfied employees have
lower levels of absenteeism but the correlation is not strong.
Relationship between satisfaction and turn over is much
stronger: Satisfied employees have lower levels of turnover.
Customer satisfaction True for front line managers. Job
satisfaction is positively related to customer satisfaction for
front-line managers. No evidence to show the same between
higher management and customers.
Organisation Citizenship Behaviour Logical to assume that
job satisfaction should be a major determinant of an
employees OCB
Workplace misbehaviour Job dissatisfaction may lead to
workplace misbehaviour
2. Job Involvement and organisational commitment
Job involvement is the degree to which an employee identifies
with his/her job, actively participates in it, and considers
his/her job performance to be important to self-worth.
Organisational commitment is an employees orientation
towards the organisation in terms of his/her loyalty to,
identification with and involvement in the organisation
3. Employee engagement
Employees being connected to, satisfied with and enthusiastic
about their jobs
4. Attitudes and consistency
Research has shown that people seek consistency among their
attitudes and between their attitudes and behaviour.
They try to reconcile differing attitudes and align their
attitudes and behaviour so they appear rational and
consistent.
 Cognitive dissonance theory:
o Cognitive dissonance: Any incompatibility or inconsistency
between attitudes, or between behaviour and attitudes
o The theory argues that any form of inconsistency is
uncomfortable and that individuals will try to reduce the
dissonance and thus the discomfort.
o The theory says that how hard we will try to reduce the
dissonance depends on 3 factors:
1. The importance of the factors creating the dissonance.
Important More pressure to correct imbalance
2. the degree of influence the individual believes he/she
has over those factors
If they think they have no control over the
dissonance, they wont bother changing their
attitude.
3. the rewards that may be involved in dissonance.
If high rewards are associated with high
dissonance, the discomfort felt by the individual
from the dissonance will be low, so they wont feel
as pressured to change.

Describe the various personality theories

o Personality is the unique combination of emotional, thought and
behavioural patterns that affect how a person reacts and interacts
with others.
MBTI
o The MBTI is a model for classifying personalities which measures 4
personality dimensions:
1. Social interaction
o Extroverted
Outgoing, dominant, need a work environment that is
varied & action oriented, lets them be with others
o Introverted
Reserved, shy, want to understand the world, prefer
work environments that is quiet and concentrated, let
them be alone and think deeply
2. Preference for gathering data
o Sensing
dislike new problems unless there is a standard way
to solve it
like an established routine
patient with routine details
tend to be good at precise work
o Intuitive
dont like repetitive tasks
like to solve new problems
 impatient with routine details
dislike taking time for precision
3. Preference for decision making
o Feeling
rely on personal values and emotions
aware of other people and their feelings
like harmony and relate to most people
dislike telling people unpleasant things
sympathetic
o Thinking
unemotional & uninterested in others feelings
use reason & logic to handle problems
like analysis and putting things into logical order
4. Style of making decisions
o Perceptive
curious
spontaneous
flexible
adaptable
tolerant
o Judging
control and prefer their world to be ordered and
structured
good planners
decisive, purposeful and exacting
Big 5 model
o The big 5 model is a model which classifies personality through 5
dimensions:
1. Extraversion
o degree to which some is sociable, talking, assertive and
comfortable in relationships with others
2. Agreeableness
o degree to which someone is good-natured, cooperative and
trusting
3. Openness to experience
o degree to which someone has a wide range of interests, is
imaginative, fascinated with novelty, artistically sensitive
and intellectual
4. Conscientiousness
o responsible, dependable, persistent, achievement oriented
5. Emotional stability
o calm, enthusiastic & secure (positive)
o tense, nervous, depressed, insecure (negative)
Additional personality insights
o Locus of control
o degree to which a person believes they have control over their
own fate
o Machiavellianism
o degree to which people are pragmatic, maintain emotional
distance, believe that ends can justify means
o Self-esteem
o degree of like/dislike for himself/herself
o Self-monitoring
o ability to adjust his/her behaviour to external situational
factors
o Risk taking
o degree to which a person avoids events which have uncertain
outcomes
o Other personality traits
Emotional Intelligence
o The ability to notice and manage emotional cues and information
o Composed of 5 dimensions
1. Self-awareness
Being aware of what you are feeling
2. Self-management
Being able to manage your emotions and impulses
3. Self-motivation
Being able to persist in the face of setbacks and failures
4. Empathy
Being aware of how others are feeling
5. Social skills
Being able to handle the emotions of others
o EI positively related to job performance at all levels

Describe perception and factors that influence it

o Perception is the process of organising and interpreting sensory
impressions in order to give meaning to the environment.
o No one actually sees reality. We interpret what we see and call it
reality.
Attribution theory
o A theory that explains how we judge people different depending on
the meaning we attribute to a given behaviour
o Theory suggests that when we observe someones behaviour we
want to know whether it was internally caused (under personal
control) or externally cause (person forced into behaviour by
situation)
o Depends on 3 factors:
1. Distinctiveness
2. Consensus
3. Consistency
DCC

Summary table
Observation Interpretation Attribution
Does person behave Yes: Low Internal attribution
this way in other distinctiveness External attribution
situations? No: High
distinctiveness
Do other people Yes: High consensus External attribution
behave the same way No: Low consensus Internal attribution
in similar situations?
Does person behave Yes: High consistency Internal attribution
this way consistently No: Low consistency External attribution
Common errors
o Fundamental attribution theory: (INTERNAL OVER EXTERNAL)
 o Tendency to underestimate the influence of external factors
and overestimate the influence of internal factors when
making judgements about the behaviours of others
o Self-serving bias:
o The tendency for individuals to attribute their own successes
to internal factors while putting blame for failures on external
factors
Shortcuts used in judging others
o Assumed similarity
o The belief that others are like oneself
o Stereotyping
o Judging a person on the basis of ones perception of a group to
which he or she belongs
o Halo effect
o A general impression of an individual based on a single
characteristic
Chapter 4: Groups and teams
Define the term group, and describe the stages of group
development
o Group: 2 or more interacting and independent individuals who come
together to achieve specific goals
o Formal (established by organisation) and informal (established
voluntarily)
o There are 5 stages of group development, as per the Tuckman and
Jensen group model:
1. Forming
o People join the group
o Define the groups purpose, structure & leadership
2. Storming
o characterised by intragroup conflict
3. Norming
o characterised by close relationships and cohesiveness
4. Performing
o Group is fully functional
5. Adjourning
o Concerned with wrapping-up activities rather than task
performance

Punctuated equilibrium
Discuss the main components that determine group performance
and satisfaction

o
o External conditions imposed on the group
- A formal work group does not exist on its own, it is a subset of a
larger organisation.
- External conditions such as the organisations strategy, authority
structures, formal rules and regulations, availability of
organisational resources, the organisations culture, employee
selection criteria etc will have an impact on group member
resources & group structures.
o Group member resources
- Knowledge, abilities, skills and personality characteristics of
group members affect both group processes and performance.
- Interpersonal skills particularly conflict management and
resolution, collaborative problem solving and communication is
important.
o Group structure
- Roles: behaviour patterns expected of someone occupying a
given position in a social unit
o Task-related roles: roles that help the group to focus on the
task at hand
o Maintenance-related roles: roles that help to maintain good
interpersonal relationships within the group
o Self-oriented roles: roles that may hinder or even
undermine the teams progress
- Norms: standards or expectations that are accepted and shared
by groups members
- Conformity: Individuals want to be accepted by groups to which
they belong, they are susceptible to conformity pressures.
- Groupthink: A form of conformity in which group members feel
extensive pressure to align their opinions with others opinions
 - Status systems: A prestige, grading, position or rank within a
group
- Group size: how big or small a group is. different projects require
different group sizes
o Social loafing: tendency for individuals to expend less effort
when collectively than when working individual (related to
group size)
- Group cohesiveness
o The degree to which group members are attracted to a
group and share its goals
o Group processes
- Group decision making
Criteria of effectiveness Groups Individuals
Accuracy
Speed
Creativity
Degree of acceptance
Efficiency
- Conflict management
o Peterson and Harveys conflict classification

o
Differentiate between work groups and work teams, and describe
4 common types of work teams
Q Groups Q Teams
Q
A group is 2 or more people Q A team is 2 or more people
with a common goal, but there psychologically contracted
is no psychological contract together to achieve a common Q
between them the outcomes goal in which all individuals
Q are less dependent on all the involved share at least some
members working together and level of responsibility and
there is usually no shared accountability for the
responsibility and outcome.
accountability for outcomes.

Q The combined individual efforts

result in a level of performance
that is greater than the sum of
those individual levels.
4 types of work teams are:
1. Problem-solving teams
A work team from the same department or functional area
that is involved in efforts to improve work activities or to solve
specific problems
2. Self-managed work team
A type of work team that operates without a manager and is
responsible for a complete work process or segment
3. Cross-functional teams
Work team composed of individuals from various specialties
4. Virtual teams
A team of people who work together largely through
computer-together largely through computer-based rather
than face-to-face interactions.

Identify the characteristics of an effective work team

o Clear goals
o Relevant skills
o Mutual trust
o Unified commitment
o Good communication
o Negotiating skills
o Appropriate leadership
o Internal and external support
Managing work teams
o Planning (goals)
o Goal determination
o Good way to make sure everyone has a common goal is to get
everyone to write down the goals, and look at their
statements
o Organising (structural stuff)
o Clarifying authority and structural issues
o Structural issues need to be resolved
o Controlling (performance stuff)
o evaluating performance
o establishing reward systems
o Leading (people stuff)
o Handling conflict
o Determining what communication processes will be used
o Directing efforts of the team
Discuss contemporary issues in managing work teams
Managing global work teams
o Group member resources in global teams:
Managers need to recognise team members abilities, skills,
knowledge and personality.
They need to be clearly understand the cultural characteristics
of the teams and the team members they manage.
 GLOBE or Hofstedes frameworks would be very helpful to
provide information about cultural differences between team
members.
o Group structure
Conformity to social norms tends to be higher in collectivist
cultures than individualistic cultures.
Groupthink however tends to be less of a problem in
global teams because members are less likely to feel
pressured to conform to ideas, conclusions and
decisions of the group.
Cultural differences can affect status. The importance of
status varies between cultures.
Status in Asian countries tends to come from family
position and formal roles held in organisations.
Status in US and Australia tends to be based on
accomplishments, rather than on titles and family
history.
Managers should be sure to understand who and what
holds status when interacting with people from a culture
different to their own, to prevent offending others.
Social loafing has a Western bias:
Seems to be more of a problem in individualistic
cultures, such as US and Australia which are dominated
by self-interest.
Less of a problem in Asian countries with collectivistic
cultures which focus on in-group goals.
Group processes
Communication problems can arise due to language
barriers which can lead to inaccuracies,
misunderstandings and inefficiencies.
Managers role
Managers can increase the efficiency and effectiveness
of global work teams by developing their communication
skills.
Managers should consider cultural differences when
deciding what type of global team to use (self-
managing, problem-solving, cross-functional, virtual)
Building team skills
o Participating in exercises that help build teamwork skills
o Exercises that help team members bond or connect and learn to rely
on one another.
Understanding social networks
o Social network structure: the patterns of informal connections
among individuals within a group
o Managers need to understand the social networks and social
relationships of work groups because these networks can either
hinder or help the teams effectiveness.
Chapter 5: Communication
Define the nature and function of communication
o Communication is the transfer and understanding of meaning.
o Interpersonal communication: communication between 2 or more
people
o Organisational communication: all the patterns, networks and
systems of communication within an organisation
o Communication serves 4 main functions:
1. Control
2. Motivation
3. Emotional expression
4. Information
ICEM

Identify the 7 components of the communication process

o Before communication can take place, a purpose, expressed as a
message to be conveyed must exist.
o It passes between a source (the sender) and a receiver. The
message is converted to symbolic form (called encoding) and
passed by a way of some medium (channel) to the receiver, who
retranslates the senders message (called decoding)
o The result is the transfer of meaning from 1 person to another.
7 components of communication:
1. the communication source
2. the message
3. encoding
4. the channel
5. decoding
6. receiver
7. feedback
o Note that the entire process is susceptible to noise
o Noise: any disturbances that interfere with the transmission, receipt
or feedback of a message
Linear model of communication
o Consists of sender encoding a
message and channelling it to
a receiver in the presence of
noise. The noise only exists in
the channelling component of
communication.
 o 1-way form of communication, as there is no feedback/response.

Transactional model of communication

o Similar to linear model except that there is noise in each stage of
communication.
o It is a model for 2-way communication - the receiver gives the
sender feedback.

Compare and contrast methods of interpersonal communication

(search up table in textbook)
o Managers need to decide which methods/forms of communication
are the most effective for different circumstances.
o There are a number of parts to interpersonal communication:
1. Non-verbal communication
o Communication transmitted without words
Eyes glazed over, not paying attention: bored
students put paper, laptops, notes, books away: class times
nearly over
2. Body language
o Gestures, facial expression and other body movements that
convey meaning
Frowning
smiling
other gestures can convey emotions or temperaments
such as aggression, fear, shyness, arrogance, joy and
anger
3. Verbal intonation
o An emphasis given to words or phrases that conveys meaning
e.g. lecturer asks what do you mean by that
soft, smooth vocal tone would communicate
sincere interest
abrasive tone and emphasis on last word would
communicate aggression and defensiveness
Identify barriers to effective interpersonal communication, and
describe how to overcome them
The barriers
o Filtering
o The deliberate manipulation of information to make it appear
more favourable to the receiver
o Emotions
o How the receiver feels when a message is received influences
how he/she interprets
it.
 o Extreme emotions such as jubilation or depression are most
likely to hinder effective communication
o Information overload
o When the information a person has to work with exceeds
his/her processing capacity
o People tend to ignore, pass over, forget or selective choose
information when this happens
o Defensiveness
o When people feel threatened, they tend to react in ways that
reduce their ability to achieve mutual understanding
o Language
o The language a person uses is greatly affected by their age,
education, cultural background.
o People of a particular age group, cultural background,
education level tend to use different jargon in contrast to
another group.
o National culture
o Forms of communication vary among nations
o E.g. Chinese people prefer not to use voice mail, while voice
mails are widely used in Australia
Overcoming the barriers
o Use feedback
o Feedbacks reduce the likelihood of misunderstandings and
inaccuracies.
o Restating the message back to the person in their own words
helps in ensuring both parties have achieved a mutual
understanding
o Simplify language
o Managers should consider the audience to whom the message
is directed and tailor the language to them
o Listen actively
o Active listening is listening for full meaning without making
premature judgements or interpretations
o Constrain emotions
o When experiencing strong emotions, it is best to refrain from
communicating until you have regained composure and
calmed down
o Watch non-verbal cues
o Non-verbal cues communicate just as well as verbal cues.
Explain how communication can flow most effectively in
organisations
o Formal communication
o Communication that follows the official chain of command or
which is required to do ones job
o E.g. a manager asking an employee to complete a task is
communicating formally or an employee clarifying their work
with their manager
o Informal communication
 o Communication that is not defined by the organisations
structural hierarchy
o E.g. speaking to employees on the lift, passing by hallways.
o Informal communication is important as it fills 2 purposes:
1. permits employees to satisfy their need for social
interaction
2. can improve an organisations performance by creating
alternative, and frequently faster and more efficient
channels of communication
o Downward communication
o Communication that flows downward from a manager to
employees
o Downward communication takes place in situations like town
hall meetings where managers discuss issues or recognise
accomplishments.
o town hall meeting: Informal public meetings where
information can be relayed, issues can be discussed, or
employees can be brought together to celebrate
accomplishments
o Upward communication
o Communication that flows upwards from employees to
managers
o Reports are given to managers to inform them of progress
towards goals or any current problems.
o Employee attitude surveys
o Lateral communication
o Communication that takes place between any employees on
the same organisational level
o Can promote employee engagement
o Can create problems if employees dont keep managers
informed
o Diagonal communication
o Communication that cuts across both work areas and
organisational levels
o Quicker and more efficient
o Can create problems if employees dont keep managers
informed

Organisational communication networks

o Communication networks: variety of patterns of vertical and
horizontal flows of organisational communication
o Grapevine: informal organizational communication network

Describe how information technology affects managerial

communication
o Improved managers ability to monitor individual or team
performance
 o Allowed employees to have more complete information in order to
make faster decisions
o Provided employees with more opportunities to collaborate and
share information
Networked systems
o In a networked system, an organisations computers are linked.
o Organisational members can communicate with each other and tap
into information whether they are down the hall, across town or
halfway across the world.

Discuss contemporary issues in communication

Managing communication in an internet world
o Legal and security issues
o Legal issues can arise as emails and instant messaging
applications can be used as evidence to battle legal cases.
o E.g. Chevron paid $2m to settle a sexual harassment legal
action stemming from inappropriate jokes being send by
employees over company email.
o Security issues: Emails can get leaked and so should not be
used to communicate confidential information.
o Corporate computer and email systems should be protected
against hackers.
o lack of personal interaction
o potential for cyber bullying
The role of communication in customer service
o Quality of communication with customers has a large impact on
their satisfaction
o Organisations with a strong service culture need to find out what
their customers needs are, how to meet those needs, and to follow
up to make sure their needs are met satisfactorily. Each of these
activities involve communication.
o Ability of front-line employees to communicate accordingly when a
customer expresses dissatisfaction is very important.
Getting employee input
o Employees in organisations have innovative ideas which should be
expressed
o A possible way to get employee input is through a suggestion box
Communication ethically
o Ethical communication is communication that includes all relevant
information, which is true in every sense and not deceptive in any
way.
Chapter 6: Decision making
Identify the eight steps in the decision-making process
1. Identification of a problem
o Problem: A discrepancy between an existing & a desired state
of affairs
o Problems are not always trivial, and can be confused with
symptoms of the problem rather than the actual problem.
o Managers can be better at identifying problems if they know
the 3 characteristics of problems:
Awareness of the problem by knowing where things
currently stand and comparing it to where things should
be or where they are desired to be.
Be under pressure to act (pressure might come from
organisational policies, deadlines, financial crises,
competitor actions, customer complaints, expectations
from the boss, or an upcoming performance evaluation).
Have the resources to take action (managers wont
characterise something as a problem, if adequate
resources arent available and managers dont have the
authority, information or resources necessary to act on
it.
o Problem: Currently Jody is working as a sales manager in a
corporate environment but she wants to be an entrepreneur.
She is deciding what the best franchise to purchase is.
2. Identification of decision criteria
o Determining what is relevant in making a decision.
o Jody has to assess what factors are relevant to her decision.
These might include:
Start up costs
Financial availability
failure rate
Growth potential
Open geographical locations
Franchisor history
Financial qualifications
Franchisor support
3. Allocation of weights to criteria
o Prioritising the elements in the decision criteria by allocating
weights to their importance. E.g. could scale from 1-10 10
most important, 5 would be half as important and so on.

4. Development of alternatives
o In this step, different alternatives for choices are developed,
but are not yet evaluated.
5. Analysis of alternatives
 o The alternatives are evaluated based on the identified criteria.
Scores for the degree of fulfilment of each criterion are given
to each alternative. The scores in each criterion are then
multiplied by the weights of the criteria and summed to give
an overall score for each alternative.
o These scores allocated are personal evaluations made by the
decision maker. While some evaluations can be done
objectively such as start up costs and financial qualifications,
others cannot and are more influenced by personal
judgement, such as franchisor support in Jodies case.
6. Selection of alternatives
o Choosing the alternative with the highest score given in step
5.
7. Implementation of alternatives
o Putting the decision into action.
o Reassessing the environment for any changes, especially if
the decision is one that takes a longer period of time to
implement. Ensuring that the criteria, alternatives & choice
are still the best ones.
8. Evaluation of decision effectiveness
o Determining whether or not the decision in step 6 and the
implementation in step 7 accomplished the desired result.
o If not, managers need to assess what went wrong.
o Managers may need to go back a few steps and fix any errors
in their decisions.
Discuss the three ways managers make decisions
1. Rationality
o Managers make logical and consistent choices to maximise
organisational value.
o A key assumption of rationality is that mangers want to
maximise the organisations interests not their own interests
o Other assumptions are:
Problem is clear and unambiguous
Single, well-defined goal is to be achieved
All alternatives and consequences are known
Preferences are clear
Preferences are constant and stable
No time or cost constraints exist
Final choice will maximise payoff
2. Bounded rationality
o Behaviour that is rational within the parameters of a simplified
decision making process that is limited (or bounded) by an
individuals ability to process information.
o Managers satisfice (choose solutions that are good enough
rather than maximise
 3. Intuitive decision making
o Intuitive decision making is decisions on the basis of
experience, feelings, and accumulated judgement.
o Making a decision based on intuition/gut-feeling doesnt
happen independently of rational analysis, they complement
each other.
Explain the two types of problems and decisions
1. Structured problems & Programmed decisions
o Structured problem - Straight-forward, familiar and easily
defined problems
o A programmed decision a repetitive decision that can be
handled by a routine approach.
o Can be tackled through a procedure a series of interrelated
sequential steps that a manager can use to respond to a
structured problem.
o May be tackled by following a rule an explicit statement that
tells a manager what they can or cannot do.
o Another guide is a policy a guideline that establishes
parameters for making decisions.
2. Unstructured problems & non-programmed decisions.
o Unstructured problems that are new or unusual and for
which information is ambiguous or incomplete.
o Non-programmed decisions Unique decisions that require
custom-made solutions
SUMMARY TABLE
Characteristics Programmed Non-programmed
decisions decisions
Type of problem Structured Unstructured
Managerial Level Low High
Frequency Repetitive, routine New, unusual
Information Readily available Ambiguous or
incomplete
Goals Clear, specific Vague
Time frame or solution Short Relatively long
Solution relies on Procedures, rules, Judgement and
policies creativity
Contrast the three decision-making conditions
Certainty Risk Uncertainty
A situation in which a Those conditions in A situation in which a
manager can make which the decision decision maker has
accurate decisions maker is able to neither certainty nor
because the outcome estimate the likelihood reasonable probability
of every alternative is of certain outcomes estimates available.
known

Describe two different decision-making styles

o Thinking style reflects:
1. What sources of information you prefer
2. How you process that information
Linear Non-linear
o Preference for using external o Preference for internal
data and facts sources of information
o Processing this information (feelings and intuition)
through rational, logical o Processing this information
thinking with internal sights, feelings
and hunches.

Identify some common decision-making errors and biases

o When managers make decisions, not only do they implement their
particular style but many use rules of thumb or heuristics to
simplify their decision making process.
o While heuristics simplify complex/ambiguous information, they may
be unreliable leading to errors and biases in processing and
evaluating information.

There are 12 common decision-making errors and biases:

1. The immediate gratification bias describes decision makers who tend
to want immediate rewards and to avoid immediate costs
2. The Anchoring effect described when decision maker fixates on initial
information as a starting point and fail to adjust adequately for
subsequent information
3. When decision makers selectively organize and interpret events
based on their biased perceptions they are using selective perception
bias
4. Decision makers who seek out information that reaffirms their past
choices and discount information contradicts past judgments exhibit
confirmation bias
5. Framing Bias is when decision makers select and highlight certain
aspects of a situation while excluding others
6. Availability bias is when decision makers tend to remember events
that are the most recent
 7. When decision makers assess the likelihood of an event based on how
closely it resembles other events or sets of events, that is
representation bias
8. Randomness bias is when decision makers try to create meaning out
of random events
9. Sunk costs error is when decision members forget that current
choices cannot correct the past
10. Decision makers that are quick to take credit for their successes and
to blame failure on outside factors are exhibiting the self-serving bias
11. Hindsight bias is the tendency for decision makers falsely to believe
that they would have accurately predicted the outcome of an event
once the outcome is known

Describe some effective decision-making techniques for todays

world
o Understand cultural differences
o Be aware of the fact that there is no one best way worldwide
to make decisions.
o The best way tends to depend on the values, beliefs, attitudes
and behavioural patterns of the people involved
o Create standards for good decision making
o Good decisions are forward looking, use available information,
consider all available and viable options, and do not create
conflicts of interest.
o Know when it is time to call it quits
o When it is evident that a decision is not working, do not be
afraid to pull the plug. Many decision makers block or distort
negative information because they refuse to believe that their
decision was bad.
o Use an effective decision-making process.
1. Focus on whats important allocate weights accordingly
2. Process should be logical and consistent
3. Acknowledges both subjective and objective thinking and blends
analytical with intuitive thinking
4. Requires only as much information analysis as necessary to
resolve a particular dilemma.
5. Encourages and guides the gathering of relevant information and
informed opinion
6. Is straightforward, reliable, easy to use and flexible

o Karl Wiecks Habits of Highly Reliable Organisations

1. Are not tricked by their success preoccupied with their failures
2. They defer to the experts on the frontline
3. They let unexpected circumstances provide the solution
4. They embrace complexity
5. HROs anticipate but also anticipate their limits.
o Thinking by acting.
Chapter 7: Leadership
Define leader and leadership
Leader: someone who can influence others and who has managerial
authority
Leadership: The process of influencing a group to achieve goals
Compare and contrast early theories of leadership
Trait theories:
Leadership theories that tried to isolate characteristics that
differentiated leaders from non-leaders
7 traits associated with leadership:
1. Drive
2. Desire to lead
3. Honesty and integrity
4. Self-confidence
5. Intelligence
6. Job-relevant knowledge
7. Extraversion
Behavioural theories
Leadership theories that identified behaviours that differentiated
effective leaders from ineffective leaders
4 main leader behaviour studies:
1. University of Lowe studies explored 3 leadership styles
1. Autocratic style: A leader who tended to centralise
authority, dictate work methods, make unilateral decisions
& limit employee participation
2. Democratic style: A leader who tended to involve
employees in decision making, delegate authority,
encourage participation in deciding work methods and
goals, and use feedback as an opportunity for coaching
employees
3. Lassiez-faire style: A leader who generally gives the group
complete freedom to make decisions and complete the
work in whatever way it saw fit
The research was however inconclusive about which leadership
style was the best approach
2. The Ohio State studies identified 2 important dimensions to
leader behaviour
1. Initiating structure: the extent to which a leader was likely to
define and structure his or her role and the roles of group
members in the search for goal attainment
2. Consideration: The extent to which a leader has job
relationships characterised by mutual trust and respect for
group members ideas and feelings
 However, there was still no conclusion about what combinations
of these dimensions were the best approaches to leadership
3. The University of Michigan studies also identified 2 dimensions of
leadership behaviour:
1. Employee oriented: emphasis on interpersonal relations
2. Production oriented: Emphasis on the technical or task aspects
of the job
The Michigan researches concluded that leaders who were
employee oriented achieved high group productivity and high
member satisfaction
4. The managerial grid
- Developed by Blake and Mouton
- 2 dimensional grid:
1. Concern for people
2. Concern for production
- These dimensions get rated on a scale from 1-9, and the
managers style of leadership would be represented by co-
ordinates.
- No answers to what makes a manger an effective leader; just a
framework for conceptualising leadership style.

Describe the 3 main contingency theories of leadership

1. Fiedler model
Effective group performance depends on the proper match
between a leaders style of interacting with his/her followers
 and the degree to which the situation allows the leader to
control and influence
Used a LPC (least preferred co-worker) questionnaire (A
questionnaire that measures whether a leader is task (low
score) or relationship (high scores) oriented)
Model assumed that a person cannot change his/her
leadership style to fit a situation.
3 contingency dimensions that defined key situational factors
for determining leader effectiveness:
1. Leader-member relations: the degree of confidence, trust
and respect employees had for their leader; rated as either
good or poor
2. Task structure: degree to which the job assignments were
formalised and procedurised; rated as either high or low
3. Position power: degree of influence a leader had over
power-based activities such as hiring, firing, discipline,
promotions and salary increases; rated as either strong or
weak
Findings on the Fiedler model:
 2. The Hersey Situational Model
Successful leadership is achieved by selecting the right
leadership style which is contingent on the level of the
followers readiness
Readiness: the extent to which people have the ability and
willingness to accomplish a specific task.
2 leadership dimensions: task and relationship
combinations of which describe the 4 specific leadership
styles:
1. Telling: (high task-low relationship): Leader defines roles
and tells people what to do, and how, when and where to
do the various tasks
2. Selling (high task-high relationship): The leader provides
both directive and supportive behaviour
3. Participating (low task high relationship): The leader and
follower share in decision making; the main role of the
leader is facilitating and communicating
4. Delegating (low task low relationship): The leader
provides little direction or support.
Task behaviour: directive behaviour or providing guidance to
employees
Relationship behaviour: supportive behaviour that entails 2-
way communication, facilitating behaviour, active listening
and socio-emotional support
The final component in Herseys model s defining the 4 stages
of readiness:
1. R1: People are both unable and unwilling to take
responsibility for doing something.
2. R2: People are unable but willing to do the necessary job
tasks.
3. R3: People are able but unwilling
4. R4: People are able and willing
Suggestions of the model:
Readiness Leadership style
R1 Telling
R2 Selling
R3 Participating
R4 Delegating

3. Path Goal theory (House)

4 types of leaders in the theory:
1. Directive: Let subordinates know whats expected of them,
schedules work to be done, and gives specific guidance as
to how to accomplish tasks
 2. Supportive: is friendly and shows concern for the needs of
followers
3. Participative leader: consults with group members and uses
their suggestions before making a decision
4. Achievement oriented leader: sets challenging goals and
expects followers to perform at their highest level
In contrast to Fiedlers model, House assumed that leaders are
flexible and can display any or all of these leadership styles,
depending on the situation.
Theory proposes 2 contingency variables:
1. Environmental
Task structure
Formal authority system
Work group
2. Personal characteristics of follower
Locus of control
Experience
Perceived ability
Some predictions from path-goal theory are:
- Directive leadership leads to greater satisfaction when
tasks are ambiguous or stressful
- Supportive leadership results in high employee
performance and satisfaction when subordinates are
performing structured tasks
- Directive leadership is perceived as redundant among
subordinates with high perceived ability or with
considerable experience
- The clearer and more bureaucratic the formal authority
relationships, the more leaders should exhibit supportive
behaviour and de-emphasise directive behaviour
- Directive leadership will lead to higher employee
satisfaction when there is substantive conflict within a
work group
- Subordinates with an internal locus of control will be
more satisfied with a participative style
- Subordinates with an external locus of control will be
more satisfied with a directive style
- Achievement-oriented leadership will increase
subordinates expectancies that effort will lead to high
performance when tasks are ambiguously structured.
Describe contemporary views of leadership
Leader-member exchange theory
Leaders create in-groups and out-groups, and those in the in-group
will have higher performance ratings, less turnover and greater job
satisfaction.
Transformation-transactional leadership
Transactional leaders: Leaders who guide primarily by using social
exchanges (or transactions)
o Exchange rewards for employee productivity
Transformational leaders: Leaders who stimulate and inspire
(transform) followers to achieve extraordinary outcomes.
They are not opposites transformational leadership is built on top
of transactional leadership.
Charismatic-visionary leadership
Charismatic leader: An enthusiastic, self-confident leader whose
personality and actions influence people to behave in certain ways
Visionary leadership
The ability to create and articulate a realistic, credible and attractive
vision of the future that improves upon the current situation.
Team leadership
Team leadership focuses on 2 priorities:
1. managing the teams external boundary
2. facilitating the team process
These priorities can be grouped into 4 specific leadership roles:
1. Team leaders are liaisons with external constituencies.
2. Team leaders are trouble shooters.
3. Team leaders are conflict managers
4. Team leaders are coaches

Explain the five sources of a leaders power

Legitimate power: The power a leader has as a result of his or her
position in the organisation
Coercive power: The power a leader has because of his or her ability
to punish or control
Reward power: the power a leader has because of his or ability to
give positive benefits or rewards
Expert power: Influence that is based on expertise, special skills
Referent power: Power that arises because of a persons desirable
resources or personal traits

Discuss issues affecting leadership in the 21st century

Developing trust
Credibility: The degree to which followers perceive someone as
honest, competent and able to inspire
Trust: The belief in the integrity, character and ability of a leader
o 5 dimensions that make up the concept of trust:
1. Integrity: honesty and truthfulness
2. Competence: technical and interpersonal knowledge and
skills
 3. Consistency: reliability, predictability and good judgement
in handling situations
4. Loyalty: willingness to protect, physically and emotionally
5. Openness: willingness to share ideas and information freely
Developing trust has become increasingly important due to the
trends towards empowerment and self-managed work teams. This
has reduced or eliminated many of the traditional control
mechanisms used to control employees.
Leaders have to increasingly lead others who may not be in their
immediate work group (cross-functional teams, people who
represent other organisations through strategic alliances).
Providing ethical leadership
Some suggestions about being an effective ethical leader:
1. Give people a reason to come to work.
2. Be loyal to the organisations people.
3. Spend time with people who do the real work of the organisation.
4. Be more open and more candid about what business practices
are acceptable and proper and how the unacceptable ones
should be fixed.
Empowering employees
Empowerment: increasing the decision-making discretion of
workers.
Gets some work off managers shoulders while increasing employee
satisfaction and engagement
Sustainability initiatives and ethical transformational leadership
Sustainability initiatives are integral in todays business world, as
the world faces severe environmental problems such as natural
resource depletion, pollution, global warming. Initiatives such as
switching to renewable sources of energy (photovoltaic, solar,
energy from plants) have thus become increasingly important. To
successfully implement these sustainability initiatives, the world
requires ethical transformational leadership, as these
transformational leaders are able to envision a healthy environment,
and motivate their followers to reach this vision. Toyota is an
example of an organisation which has successfully implanted
sustainability initiatives such as using photovoltaic energy and
producing hybrid cars. To reduce the level of pollution near the
manufacturing factories, the organisation has also planted many
trees surrounding the area to counteract the carbon emissions and
balance the ecosystem.
Leadership training
Leadership training is helpful in learning leadership behaviours.
 Not everyone can be a leader, and leadership training is more
effective for some people than others.
Those with low self-monitoring struggle to learn leadership
behaviours than those with high self-monitoring
Cross-cultural leadership
National culture is an important situational variable in determining
which leadership style will be most effective. This is because
national culture influences how followers will respond.
American leaders emphasise follower responsibilities rather than
rights; assume self-gratification rather than commitment to
duty/altruistic motivation; assume centrality of work and democratic
value orientation; stress rationality over spirituality.
Some leadership elements are however universal particularly
those associated with transformational leadership. These elements
include:
o Vision
o Foresight
o Encouragement
o Trustworthiness
o Dynamism
o Positiveness
o Proactiveness
Gender differences and leadership
General trends:
Women Men
Democratic/participative style Directive, command and
Encourage participation control style
Share power and information Rely on formal position
Attempt to enhance authority for their influence
followers self worth Use transactional leadership
Lead through inclusion
Rely on their charisma,
expertise, contacts and
interpersonal skills to
influence others
Tend to use transformational
leadership
Substitutes for leadership
In some situations, leaders are not needed.
Follower characteristics such as experience, training, professional
orientation or need for independence can neutralise the effect of
leadership.
Jobs that are inherently unambiguous and routine, or that are
intrinsically satisfying may place fewer demands on the leader.
 Organisational characteristics such as explicit formalised goals, rigid
rules and procedures, or cohesive work groups can substitute for
formal leadership.
Chapter 8: Strategic Human Resource
Management
Explain why HRM is important
o HRM is important for 3 reasons:
1. Significant source of competitive advantage
2. Important part of organisational strategies
o Achieving competitive success through people means
managers must work with people and treat them as partners,
not just as costs to be minimised or avoided.
3. How organisations treat their people has found to significantly
affect organisational performance
Identify the eight HRM activities and the three outcomes they aim
to achieve
1. Human resource planning
2. Recruitment (or decruitment)
3. Selection
Identify and select competent employees
4. Orientation
5. Training
Provide employees with up-to-date skills and knowledge
6. Performance management
7. Compensation and benefits
8. Career development
Retain competent and high-performing employees
Describe the important external influences on the HRM process
The economys effect on HRM
o During economic downturns, there are sudden falls in demand for
goods/services which can result in organisations having a tighter
budget. This means that they may have to decruit employees.
Labour unions
o A labour union an an organisation that represents workers and seeks
to protect their interest through collective bargaining.
o IN Australia & NZ, various laws, regulations and union agreements
usually define such things such as wages and conditions, work
practices, criteria for hiring, promotions and lay-offs, training
eligibility and disciplinary practices.

Industrial relations laws and regulations

o Industrial relations: the formal interactions between unions and an
organisations management.
o Minimum wage laws
Discuss the tasks associated with identifying and selecting
competent employees
Human resource planning
o The process by which managers ensure they have the right number
and kinds of people in the right places, and at the right times, who
are capable of performing assigned tasks effectively and efficiently.
o Current assessment of HR
o Human resource inventory
Filled out by employees that include information such as
their name, education, training prior employment,
languages spoken, special capabilities, and specialised
skills.
o HR needs to clearly outline the following things (they need to know
what kind of job needs to be fulfilled) and communicate them to
potential employees:
o Job analysis (behaviours necessary to perform job)
An assessment that defines jobs and the behaviours
necessary to perform them
o Job description (what how and why: they do their job)
A written statement of what a job holder does, how it is
done and why it is done
o Job specification (qualifications)
A statement of the minimum qualifications that a person
must possess to perform a given job successfully
o Meeting future HR needs:
o Future Human Resources needs are determined by the
organisations missions, goals and strategies.
o Demand for HR is a result of demand for the organisations
products or services.
o On the basis of its estimate of total revenue, managers can
attempt to establish the number and mix of HR needed to
reach that revenue.
Recruitment and Decruitment (add photo later)
o Recruitment: the process of locating, identifying and attracting
capable applicants
o If job vacancies exist, managers can recruit using the
information gathered through job analysis.
o There are many options on how to get potential job
candidates:

o Decruitment: techniques for reducing the labour supply within an

organisation
o If HR planning indicates a surplus of employees, management
may want to decruit.
Selection
 Selection process: The process of screening job applicants to ensure
that the most appropriate candidates are hired.
Hiring the wrong person for a job can be very costly for businesses
due to costs arising from: training, lost sale opportunities, poor staff
morale and poor customer service (all of which are common by-
products of poor selection for a job)
Selection decision outcomes:

o
The costs of reject errors include:
- Additional screening needed to find acceptable candidates
- Rejected candidates could also expose the organisations to
charges of discrimination if they can prove that they would be
successful in the job.
The costs of accept errors include:
- Profits lost due to employees incompetence
- cost of severance & subsequent costs of further recruiting and
screening.
Validity and Reliability
To reduce the probability of making decision errors, we need to maximise
the validity and reliability of the selection process.
Validity: proven relationship that exists between a selection device
and some relevant job criterion.
Reliability: the ability of a selection device to measure the same
thing consistently
Types of Selection Devices: Application Forms, written tests,
performance simulation tests (work sampling - miniature replica of a
job, assessment centres - performance simulation tests), interviews
(realistic job preview), background investigations (verifications and
reference checks), physical examinations
Explain the different types of orientation and training
Orientation
 o Introducing a new employee to his/her job and the
organization
o Work unit orientation
Familiarizes new employees with the goals of their unit,
clarifies how their job contributes to the units goals,
and includes the introduction to their new co-workers
o Organization orientation
Informs the new employee about the organizations
mission, history, philosophy, procedures and rules.
o Successful orientation, whether formal or informal, results in
an outsider-insider transition that makes the new member feel
comfortable and fairly well adjusted, lowers the likelihood of
poor work performance, and reduces the probability of a
surprise resignation by the new employee only a week or 2
into the job.
Employee training
o Types of training:
Type Includes
Genera Communication skills, computer systems
l application and programming, customer service,
executive development, management skills and
development, personal growth, sales, supervisory
skills, and technological skills and knowledge
Specifi Basic life/work skills, creativity, customer
c education, diversity/cultural awareness, remedial
writing, managing change, leadership, product
knowledge, public speaking/presentation skills,
safety, ethics, sexual harassment, team building,
wellness and others.

Describe strategies for retaining competent, high-performing

employees
3 HRM activities that play a role in retaining competent, high
performing employees are:
1. Managing employee performance
o A performance management system is a process of
establishing performance standards that are used to evaluate
employee performance
o Performance appraisals are used to decide who gets merit pay
increases and other rewards
o Performance management provides input into HR planning,
guide promotion, transfer and termination decisions.
o Providing feedback
2. Developing an appropriate compensation and benefits program
 o Skill-based pay: A pay system that rewards employees for the
job skills they can demonstrate
o Variable pay: A pay system in which an individuals
compensation is contingent on performance
o Types of compensation:
Base wage or salary
Wage and salary add-ons
Performance related pay: merit pay, incentive pay, profit
sharing, ownership, skills-based, group incentives
3. Career development
o Career: sequence of positions held by a person during their
lifetime
o In the past, career development programs were typically
designed by organisations to help employees advance their
work lives within a specific organisation and way to retain
highly talented employees
o Downsizing, restructuring, etc has meant that now the
individual, not the organisation, is responsible for his or her
own career
Discuss contemporary issues in managing human resources
Managing downsizing
Downsizing (or lay-offs) is the planned elimination of jobs in an
organisation. Organisations may need to downsize if it faces one of the
following problems:
1. Economic recession
2. Declining market share
3. Grown too aggressively
4. Has been poorly managed
One way to recover profits after experiencing these problems is to
eliminate some excess workers.
Workforce diversity and inclusion
The workforce is becoming more diverse in the sense that there are
growing numbers of:
o Employees born overseas
o Women in the workforce
o Employees with disabilities
o Older employees
As such it is important to form an inclusive environment in the
workplace. Diversity should be encouraged because it increases the
flow of ideas and encourages new ways of thinking which can be
valuable to organisations.
To increase diversity in the workplace, HR managers should consider
non-traditional recruitment sources, such as womens networks,
training centres for people with disabilities and ethnic newspapers.
 Because the outsider-insider transition is more challenging for
women and minority groups, a strong orientation and training
program should be implemented to reduce their anxieties. This will
help them feel more included.
Sexual harassment
Sexual harassment is any unwanted activity of a sexual nature that
affects an individuals employment, performance or work.
To avoid cases of sexual harassment and to deal with them
appropriately if they occur, organisations should:
1. Develop a strict policy on sexual harassment
2. Educate employees on that policy
3. Create a procedure that employees are to follow if they feel they
have been victims of sexual harassment
4. Investigate any complaints or allegations of sexual harassment
Work-life balance
Maintaining a work-life balance is a challenge for many employees
especially as women have entered the workforce. (Dual-career
couples) The responsibilities employees have at home can
negatively affect their performance at work. To minimise this,
organisations can offer family-friendly benefits at work, which
includes benefits such as flexitime, onsite child care, part-time
employment, job sharing, relocation programs, time off for school
functions, parental leave and adoption benefits.
Occupational health and safety
Organisations should aim to eliminate all conditions that could result
in personal injury or health problems for its employees.
Organisations should aim to eliminate the complacency that exists
in their workplaces among managers and employees complacency
is a dominant factor in many workplace accidents.
Chapter 9: Strategic management
Define strategic management and explain why it is important
Strategic management is what managers do to develop the
organisations strategies.
A strategy is the plans for how the organisation will do what it is in
business to do, how it will compete successfully, and how it will
attract and satisfy its customers to achieve its goal.
A business model is how a company is going to make money; a
strategic design for how a company intends to profit from its broad
array of strategies, processes and activities.
Strategic management is important because of 3 key reasons:
1. It can make a difference on how well an organisation performs
2. It is important for helping managers cope with continually
changing situations
o By examining relevant factors and deciding what actions to
take.
3. It helps coordinate and focus employee efforts on what is
important

Explain what managers do during the 6 steps of the strategic

management process
1. Identifying the organisations current mission, goals and strategies
Mission: A statement of the purpose of an organisation
Steps 2 & 3 can be combined into a SWOT analysis
2. Doing an external analysis (OT)
Opportunities: Positive trends in the external environment
o New technology increase in productive capacity
o Reduction in prices of supplies/resources
Threats: Negative trends in the external environment
o Opportunities may arise for competitors
o New competitors in the market
3. Doing an internal analysis
Gather information about the organisations specific resources
and capabilities
Resources: An organisations assets that are used to develop,
manufacture and deliver products or services to its customers
Capabilities: An organisations skills and abilities in doing work
activities needed in its business
Core competencies: The organisations major value-creating
capabilities that determine its competitive weapons.
Strengths: Any activities the organisation does well, or any
unique resources that it has
Weaknesses: Activities the organisation does not do well, or
resources it needs but does not possess.
 Important to evaluate an organisations intangible assets as
well: employees skills, talents and knowledge; databases and
other IT assets; organisational culture.
4. Formulating strategies
Based on the internal/external analysis, managers should
formulate strategies. There are 3 levels of strategies
o Corporate
o Business (competitive)
o Functional
5. Implementing strategies
6. Evaluating results

Describe the 3 main types of corporate strategies

Corporate strategy: An organisational strategy that determines what
businesses a company is in, and what it wants to do with those
businesses.
3 main types of corporate strategies:
1. Growth strategy
o A corporate strategy that is used when a organisation
wants to expand the number of markets served or products
offered, either through its current business(es) or through
new business(es)
2. Stability strategy
o A corporate strategy in which an organisation continues to
do what is currently doing
3. Renewal strategy
o A corporate strategy designed to address declining
performance
o A retrenchment strategy is a short-term renewal strategy
o A turnaround strategy is a renewal strategy for situations
where the organisations performance problems are more
serious
Discuss how corporate strategies can be managed using the BCG
matrix
The BCG matrix is a strategy that guides resource allocation
decisions on the basis of market share and growth rate of strategic

business units.
Cash cows: Businesses in this category generate large amounts of
cash, but their prospects for future growth is limited
Stars: These business are in a fast-growing market and hold a
dominant share of that market. Their contribution to cash flow
depends on their need for resources.
Question marks: These business are in an attractive industry but
hold a small market share percentage
Dogs: Businesses in this category do not produce or consume much
cash. They have a low market share in a low-growth industry.

Describe the role of competitive advantage in developing a

competitive strategy
Competitive strategy: An organisational strategy for how an
organisation will compete it its business(es)
Strategic business units: Single businesses of an organisation have
several different businesses that are independent and formulate
their own strategies.
 Competitive advantage: What sets an organisation apart; its
distinctive edge
Distinctive edge comes from an organisations core competencies
its ability to do something that others cannot do, or do it better than
others can do it.
A competitive advantage that an organisation possesses might be
the quality of their goods/services.
A sustainable competitive advantage enables the company to
continually attract its customers. It is through this the company can
attract and satisfy its customers and fulfil the objective of strategic
management.
Five forces model:
o This model says that in any industry, there are 5 competitive
forces that determine industry attractiveness and profitability.
Managers assess an industrys attractiveness using the following
5 factors:
1. Threat of new entrants
2. Threat of substitutes
3. Bargaining power of buyers
4. Bargaining power of suppliers
5. Existing rivalry
Identify Porters three competitive strategies
Porter explained that there are 3 competitive strategies that
managers can choose to create a competitive advantage:
1. Cost leadership
A competitive strategy in which the organisation is the
lowest-cost producer in its industry
2. Differentiation
A competitive strategy in which a company offers unique
products that are widely valued by customers
3. Focus
A competitive strategy in which a company pursues a cost
or differentiation advantage in a narrow industry segment
(niche)
Stuck in the middle: A situation in which an organisation has not
been able to develop either a low-cost or differentiation competitive
advantage.
o Difficult to be successful in this situation but is possible (e.g.
ALDI, Target, IKEA)
Functional strategy
A functional strategy is an organisational strategy that seeks to
determine how to support the competitive strategy
 The strategies implemented in the functional departments such as
manufacturing, marketing, HR, research & development and finance
need to support the competitive strategy
Discuss current strategic management issues
The need for strategic leadership
Strategic leadership: Ability to anticipate, envision, maintain
flexibility, think strategically, and work with others in the
organisation to initiate change that will create a viable and valuable
future for the organisation and includes 8 key dimensions:
1. Exploiting and maintain the organisations core competencies
2. Developing the organisations human capital
3. Establishing appropriately balanced organisational controls
4. Reframing prevailing views by asking penetrating questions and
questioning assumptions
5. Emphasis ethical organisational decisions and practices
6. Creating and maintaining organisational relationships
7. Creating and sustaining a strong organisational culture
8. Determining the organisations purpose or vision
The need for strategic flexibility
Strategic flexibility: Ability to recognise major external
environmental changes, to quickly commit resources, and to
recognise when a strategic decision is not working.
This is important, because managers oftentimes face highly
uncertain environments.
Important organisational strategies for todays environment
e-business strategies:
o cost-leadership: online operations could eliminate the need for
sales calls & decrease sales force expenses; can use web-based
inventory control systems that reduce storage costs; could use
online testing and evaluation of job applicants
o differentiation: could use internet-based knowledge systems to
short customer response times; provide rapid online responses to
service requests; clicks and bricks
Customer service strategies
o Giving customers what they want
o Communicating effectively with them
o Having a culture that emphasises customer service
Innovation strategy
o Deciding organisations innovative emphasis (basic scientific
research, product development or process development)
o Innovating timing (first mover or follower)
Sustainability strategy
o Environmental strategies such as maximising energy
efficiency has economic rewards.
Chapter 10: Managing in the Global Environment
Explain how the global economy creates both opportunities and
threats for managers
The global economy creates opportunities for organisations to
operate internationally. This means organisation can generate
profits not only domestically but globally.
The global economy however intensifies competition. Organisations
have to compete with not only their domestic competitors but also
global competitors, which means that no organisation is immune to
global competition.
Explain parochialism, and contrast ethnocentric and geocentric
attitudes towards global businesses.
Parochialism refers to viewing the world solely through your own
perspectives, leading to an inability to recognise differences
between people
This is a significant obstacle for managers operating in a global
business world.
Ethnocentric attitude Polycentric attitude
An ethnocentric attitude The polycentric attitude
refers to the parochialistic takes the view that the
belief that the best work managers in the host country
approaches and practices are (the foreign country in which
those of a home country. the organisation is doing
business) know the best
work approaches and
practices for running their
operations.

Managers with an Home country managers

ethnocentric attitude would
not trust foreign employees
with key decisions or
technology.
with a polycentric attitude
acknowledge every foreign
operation as different and
hard to understand, so these
managers are likely to leave
their foreign facilities alone
and let foreign employees
figure out how best to do
things.

The risk of cross-cultural blunders

Managers need to be sensitive to global differences.
 Because there are large cultural differences in different countries,
managers will have a stark advantage in operating in global
environments if they are aware of the social cues in that country.
Discuss the importance of regional trading alliances and global
trade mechanisms
Global competition is shaped by the creation of bilateral
agreements or regional trading and cooperating (plurilateral)
agreements.
Regional trading alliances and global trade mechanisms are useful
for Australia because they allow free access to a larger market (the
domestic markets in Australia are small).
Australia-NZ closer economic relations agreement
Australia has free trade arrangements (FTAs) with Singapore,
Thailand, the US, Chile, the Association of South East Asian Nations
(ASEAN) (with NZ) and Malaysia
An FTA is an agreement between countries to reduce or eliminate
trade barriers such as import quotas and tariffs
Regional trading Alliances
Americas
- North American Free Trade Agreement (NAFTA)
- Southern common market (Mercosur)
Argentina, Brazil, Paraguay, Uruguay, Venezuela; with
Bolivia
- Free Trade Area of the Americas
European Union (EU)
- A unified economic and trade entity
Belgium, Denmark, France, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Portugal, Spain, the UK,
Germany, Austria, Finland, and Sweden
- Economic and monetary union (Euro)
Africa
- African Union
Asia
- Association of Southeast Asian Nations (ASEAN)
Initial members: Indonesia, Malaysia, the Philippines,
Singapore and Thailand.
Membership has expanded to include Brunei, Burma
(Myanmar), Cambodia, Laos, and Vietnam
Multilateral agreements World Trade Organisation (WTO)
Functions as the only global organisation dealing with the rules of
trade among nations
Monitors and promotes world trade
Helps businesses in these countries conduct efficient and effective
trade relationships
 Contrast multinational, multidomestic, global and transnational
organisations
Multinational Multidomestic Global company Transnational or
corporations corporations borderless
(MNC) organisation
A broad term that An international An international A global type of
refers to any and company that company that organisation in
all types of decentralises centralises which artificial
international management management geographical
companies that and other and other barriers are
maintain decisions to the decisions in the eliminated
operations in local country home country
multiple countries
These
companies treat
the world
market as an
integrated
whole and focus
on the need for
global efficiency.

Reflects the Reflects the

polycentric ethnocentric
attitude attitude
Nestle, Sony, Deutsche
McDonalds, Taco Bank
Bell
Describe the structures and techniques organisations use as they
go international
Global-sourcing: Purchasing materials or labour from around the
world wherever it is cheapest
Exporting: Making products domestically and selling them overseas
Importing: Acquiring products made overseas and selling them
domestically
Licensing: An organisation gives another organisation the right to
make or sell its products using its technology or product
specifications
Franchising: An organisation gives another organisation the right to
use its name and operating methods
Strategic alliances: Partnerships between an organisation and a
foreign company partner(s) in which both share resources and
knowledge in developing new products or building production
facilities
Join venture: A specific type of strategic alliance in which the
partners agree to form a separate, independent organisation for
some business purpose
Foreign subsidiary: Directly investing in a foreign country by setting
up a separate and independent production facility or office

Explain the relevance of the legal-political and economic

environments to global business
Legal-Political Environment
While the legal-political environment is very stable in Australia, the
same cannot be said for other countries.
Managers need to stay aware of the specific laws of the country in
which they do business
Afghanistan, Belarus, Bissau, Democratic Republic of Congo, Iran,
Iraq, Pakistan, Somalia, South Sudan, Sudan Syria, Venezuela,
 Yemen, and Zimbabwe all have very volatile legal-political
environments.
Doing business in countries which have different social and political
systems from Australia can be a difficult situation in itself. Managers
need to be well aware of these differences if they are to understand
the constraints under which they operate and the opportunities that
exist.
Economic environment
Free-market economy: An economic system in which resources are
primarily owned and controlled by the private sector.
Planned economy: An economic system in which all economic
decisions are planned by a central government
Managers need to understand the type of economies in which they
operate in because this can present constraints on their decisions
and actions.
Other economic issues managers need to understand are:
- Currency Exchange rates
- Inflation rates
- Diverse tax policies
 Discuss how Hofstedes and the GLOBE framework assist in
understanding country cultures
National culture: the values and attitudes shared by individuals from
a specific country that shape their behaviour and beliefs about what
is important
National culture is more important (influential) than organisational
culture.
Hofstedes 5 dimensions of national culture:
Individualistic: people look after their own and family interests (Aus,
Canada, US)
Collectivistic: people expect group to look after and protect them
(China, Thailand, Mexico)
High power distance: accepts wide differences in power, great deal of
respect for those in authority (Mexico, Singapore, Indonesia, France)
Low power distance: plays down inequalities; employees are not afraid
to approach nor are in awe of the boss (US, Aus, Sweden)
High uncertainty avoidance: threatened with ambiguity and experience
high levels of anxiety (Japan, Italy, Mexico, France)
Low uncertainty avoidance: comfortable with risks; tolerant of different
behaviours and opinions (Canada, US, Singapore)
Achievement: values such as assertiveness, acquiring money and
goods, and competition prevail (US, Japan, Aus, Mexico)
Nurturing: values such as relationships and concern for others prevail
(France, Sweden)
Long-term orientation: people look to the future and value thrift and
persistence (China, Taiwan, Japan)
Short-term: people value tradition and the past (Germany, Australia,
US, Canada)
GLOBE framework research program extended Hofstedes work by
investigating cross-cultural leadership behaviours and gives
managers additional information to help them identify and manage
cultural differences.
The GLOBE framework measures cultural differences
Assertiveness: The extent to which a society encourages people to be
tough, confrontational, assertive and competitive, rather than modest
and tender.
Future orientation: Extent to which a society encourages rewards
future-oriented behaviours such as planning, investing in the future
and delaying gratification
Gender differentiation: Extent to which a society maximises gender-role
differences as measured by how much status and decision-making
responsibilities women have
 Uncertainty avoidance: A societys reliance on social norms and
procedures to alleviate the unpredictability of future events
Power distance: Extent to which a society accepts that power in
institutions and organisations is distributed unequally different to
Hofstedes model
Institutional collectivism: degree to which individuals are encouraged
by societal institutions to be integrated into groups within
organisations
In-group collectivism: Extent to which members of a society take pride
in membership in small groups, such as their family and circle of close
friends and organisations in which they are employed
Power orientation: Degree to which a society encourages and rewards
group members for performance improvement and excellence
Humane orientation: Degree to which a society encourages and
rewards individuals for being fair, altruistic, generous, caring and kind
to others.
GLOBE frame extended, not replaced Hofstedes framework
These frameworks can give managers insights about how the
countries in which they are operating in differ from their own. This
will allow them to adjust their attitudes and behaviour to suit the
country they are in.
Evaluate the challenges of global business and sustainability in
todays world
The challenge of openness
Risk of terrorist attacks
Being open to the intense underlying and fundamental cultural
differences differences which encompass traditions, history,
religious beliefs and deep-seat values can be very difficult.
Some people believe globalisation is only a means through which
countries have become Westernised.
While managers can be open to different cultural values, the same
may not be reciprocated by the country in which they are operating
in.
Those who do not like what Westerners do, say or belief,
globalisation can lead to resentment, dislike, distrust and even
outright hatred.
Challenges of managing in a global workforce
To successfully manage in a global workforce, managers need
cultural intelligence (cultural awareness and sensitivity skills).
Cultural intelligence encompasses 3 main dimensions:
1. knowledge of culture as a concept how cultures vary and affect
behaviour
 2. Mindfulness the ability to pay attention to signals and reactions
in different cross-cultural situations
3. Behavioural skills using ones knowledge and mindfulness to
choose appropriate behaviours in those situations
Managers need to have a global mind-set (attributes that allow a
leader to be effective in cross-cultural environments)
3 components of those attributes are:
1. Intellectual capital: knowledge of international business and the
capacity to understand how business works on a global scale
2. Openness to new ideas and experiences
3. Ability to form connections and building trust relationships with
people who are different from you
Chapter 11: Corporate social responsibility and
ethics
Contrast the classical and socioeconomic views, and evaluate to
whom managers could be responsible
Classical view
The view that managements
only social responsibility is to
maximise profits
Expending the firms
resources on doing social
good unjustifiably increases
cost that lowers profits to the
owners and raises prices to
the consumers
Maximising value for
shareholders or owners is the
only legitimate concern
Socioeconomic view
The view that managements
social responsibility goes
beyond making profits to
include protecting and
improving societys welfare
Firms have a moral
responsibility to larger
society to become involved
in social, legal and political
issues
Corporations are not
independent entities
responsible only to their
shareholders organisations
are responsible for any group
affected by the
organisations decisions and
actions its stakeholders

Lesser
4 stages of social responsibility
1. Owners and management
2. Employees
3. Constituents in the specific environment
4. Broader society
Greater
Discuss what it means to be socially responsible, and describe
factors which influence that decision

Social obligation: The obligation of a business to meet its economic and

legal responsibilities
Social responsiveness: The capacity of a firm to adapt to changing societal
conditions
Social responsibility: A businesss intention, beyond that required by law
or economics, to pursue long-term goals that are good for society
organisations have to differentiate between right and wrong.

Arguments for an against social responsibility include:

For Against
Public expectations: Public opinion Violation of profit maximisation:
now supports business pursuing Business is being socially
economic and social goals responsible only when it pursuers
its economic interests
Long-run profits: Socially Dilution of purpose: Pursuing social
responsible companies tend to goals dilutes businesss primary
have more secure long-run profits purpose economic productivity
(however the direction of causation
is blurred)
Ethical obligation: Responsible Costs: Many socially responsible
actions are the right thing to do actions do not cover their costs,
and someone must pay those costs
Better environment: Business Too much power: Businesses have
involvement can help solve difficult a lot of power already, and if they
social problems pursue social goals they will have
even more
Discouragement of further Lack of skill: Business leaders lack
government regulation: By the necessary skills to address
becoming socially responsible, social issues
businesses can expect less
government regulation
Balance of responsibility and Lack of accountability: There are
power: Businesses have a lot of no lines of accountability for social
power and an equally large amount actions
of responsibility is needed to
balance it
Shareholder interests:
Improvement of share price in the
long run
Possession of resources: They have
resources to support
public/charitable projects that need
assistance
Superiority of prevention over
cure: Should address social
problems before they become
serious and costly to correct

Social responsibility Social responsiveness

Major consideration Ethical Pragmatic
Focus Ends Means
Emphasis Obligation Reponses
Decision framework Long term Medium and short
term
Social screening: Applying social criteria (screens) to investment decisions

Explain ecologically sustainable management and discuss how

organisations can go green
Ecologically sustainable management: The recognition of the close
link between an organisations decisions and activities and its
impact on natural environment
Our world is facing large environment issues. Some of the more
serious ones include:
- natural resource depletion
- global warming
- pollution
- industrial accidents
- toxic wastes
The activities of large industries are the main contributors to these
problems.
4 stages of ecologically sustainable management are:

Legal: simply doing whats required legally

Market: responding to environment preference of their customers
Stakeholder: working to meet the environment demands of multiple
stakeholders
Activist: looking for ways to respect and preserve the earth and its
natural resources
Discuss the factors that lead to ethical and unethical behaviour
3 views of managerial ethics:
Utilitarian Rights Theory of justice
Decisions are made Decisions are made Decision makers seek to
solely on the basis of with concerning and impose and enforce rules
their outcomes and protecting individual fairly and impartially and
consequences liberties and do so by following legal
privileges rules and regulations
Believes that it is Immanuel Kants Rational individuals choose
always right to do view principles of justice
the greatest good Each of us has a Principles of fairness and
for the greatest worth or dignity that justice are then presumed
number must be respected to be fair (unbiased)
Humanity must
always be treated
as an end, not
merely as a means
The good is Types of justice:
whatever yields the Procedural
greatest utility Outcome/distributive
Interactional/Interper
sonal

Ethics: Rules and principles that define right and wrong conduct
Whether a person acts ethically or unethically is a result of a
complex interaction between:
- the individuals stage of moral development
- the individuals characteristics
- organisations structural design
- organisations culture
- intensity of the ethical issue
 Stages of moral development:

Individual characteristics
- Values: Basic convictions about what is right or wrong
- Ego strength: A personality measure of the strength of a persons
convictions
- Locus of control: A personality attribute that reflects the degree
to which people believe they control their own fate
Note: conviction a firmly held belief or opinion
Structural variables
- Some structures provide strong guidance, whereas others create
ambiguity and uncertainty
- Strong guidance (formal rules & obligations; code of ethics)
encourages ethical behaviour
- Emphasis of achieving goals can cause unethical behaviour
employees may go to unethical measures to achieve these goals
to avoid looking incapable
Organisational culture
- Value based management: the organisations values guide
employees in the way they do their jobs
Issue intensity
- Concentration of effect how many people are affected?
- Consensus belief about whether this is a good or a bad thing
- Probability of harm
- Immediacy of consequences
- Proximity to victim
 - Magnitude of consequences

Describe managements role in encouraging ethical behaviour

Behaviour of managers is the single most important influence on an
individuals decision to act ethically or unethically
Some specific ways managers can encourage ethical behaviour is by
paying attention to:
- Employee selection
- Having and using a code of ethics
- Recognising the importance of the ethical leadership role they
play and how what they do is far more important than what they
say
- Making sure that goals and the performance appraisals process
to not reward goal achievement without taking into account how
those goals were achieved
- Using ethics training and independent social audits (if there is a
fear of getting caught, they wont act unethically)
- Establishing protective mechanisms
Discuss current social responsibility and ethics issues
Managing ethical lapses and social irresponsibility
- Mangers can do this by being strong ethical leaders and by
protecting employees who raise ethical issues. The example set
by managers have a strong influence on whether employees
behave ethically.
- Ethical leaders also are honest, share their values, stress
important shared values, and use the reward system
appropriately.
- Managers can protect whistle-blowers (employees who raise
ethical issues or concerns) by encouraging them to come
forward, by setting up ethics hotlines, and by establishing a
culture where employees can complain and be heard without fear
of reprisal
Social entrepreneurs play an important role in solving social
problems, as they are individuals/organisations who seek out
opportunities to improve society by using practical, innovative and
sustainable approaches. They want to make the world a better
place and have a driving passion to make that happen.
Businesses can promote positive social change through corporate
philanthropy (desire to promote the welfare of others) and employee
volunteering efforts.