LESSON 1

Introduction to Management

TOPICS
Management defined
Functions of Management
Types of Managers and their Roles
Management Roles
The Advantage of Managing Peoples Will

LEARNING OUTCOMES
At the end of the lesson, you should be able to:

Describe management
Explain the primary functions of management
Differentiate between the planning organizing, lending and controlling functions of
management.
Differentiate between leadership, informational and decision-making roles.
Explain the advantages that arise from managing people well.

TOPIC 1: MANAGEMENT DEFINED

Introduction

Management is everywhere. Any time people work to achieve a goal, they are
engaging in management. At least as far back as the building of pyramids in
ancient Egypt or Mesoamerica, people have used principles of management to
achieve goals. Today, organizations of all types—social, political, and economic
—use management techniques to plan and organize their activities.
Constructing a pyramid was one of history’s earliest management goals.

Two Aspects of Management

When people talk about management, they may be referring to very different
aspects. They may be talking about the people who are the managers,
especially those people in strategic positions who make important decisions
for the organization, such as the executive officers, president, or general
manager. Or, they may be referring to the activities and functions of an
organization to achieve organizational goals.

Management As People

The people with the responsibility and authority to determine the overall
direction of the organization are often referred to as the management of the
organization. Management has the authority to decide what the goals of the
organization should be and how those goals will be achieved. Individuals in
upper management must be aware of conditions in the organization’s environment and have knowledge of the
total resources of the organization. They put these two together to determine the most promising path for the
organization to pursue.

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Let’s look at a small-scale illustration. Imagine a family considering their vacation plans. They have a goal: to
get away from home and work to spend an enjoyable week or two together. To achieve their goal they must first
make a number of related decisions such as these: Where will we go? How will we get there? Where will we
stay? What will we do while we are there?

These decisions cannot be made without considering the resources they have available for the trip. Perhaps they
have saved money for the trip or they decide to take out a small loan. Maybe they will rent an RV and camping
equipment or buy into a timeshare. They might be experienced backpackers or they might enjoy just chilling at
the beach. The family’s decision makers must plan on how to use their resources—both material resources,
such as money and equipment, and intellectual resources, such as knowledge and experience—to create a
successful vacation. But deciding what they are going to do is not enough; they need to actually do things to get
ready for their trip. They may need to make reservations, schedule time off work, get their car serviced, or buy a
new camera and appropriate clothing and gear. Finally, if they have made all the right decisions and all the
necessary arrangements, they can go on their trip and have a great time.

Management As Process

As we saw in the earlier example, decision making and planning are required before actions are taken. Defining
the goals of the organization, planning the actions to meet the goals, and organizing the resources needed to
carry out the actions are all vital functions of management. Planning and organizing ensure that everyone in the
organization is working together toward meeting goals.

Organizations, like families, also have goals. In large organizations, the goals are usually formally defined. A
corporate goal may be to increase market share by 12 percent in two years or to provide 250 free meals per
week to a local shelter. In small organizations or family businesses, the goals may be more general and
informal, such as to provide a unique dining experience to patrons or to be able to retire comfortably in five
years.

All organizations—businesses, the military, government departments, non profit service providers, or public
school systems—require management because they all are trying to achieve goals. And although it may seem
straightforward, the management process is complex. In most cases, management functions include:

 applying and distributing organizational resources effectively

 acquiring new resources when necessary
 analyzing and adapting to the ever-changing environment in which the organization operates
 complying with legal, ethical, and social responsibilities of the community
 developing relationships with and among people to execute the strategies and plans

Management Defined

Perhaps the most critical of all the management processes listed earlier is creating the systems and processes that allow
people to work effectively toward organizational goals. In fact, many people define management as the art of getting
things done through people. Although technology and data are increasingly important in modern organizations, people
continue to be a primary focus of management.

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Putting this all together, we can propose a definition of management: management is the process of planning,
organizing, leading, and controlling people in the organization to effectively use resources to meet
organizational goals.

TOPIC 2: FUNCTIONS OF MANAGEMENT

The activities of successful businesses can be analyzed by looking at four key roles or tasks: planning,
organizing, leading, and controlling. These primary functions are the foundation of effective management.

We have defined management as a process to achieve organizational goals. A process is a set of activities that
are ongoing and interrelated. Ongoing means that the activities are not done in a linear, step-by-step fashion
where responsibility is passed from one activity to the next. Instead, the activities are continued as new
activities are started. Interrelated means that the results of each activity influence the other activities and tasks.
It is the responsibility of management to see that essential activities are done efficiently (in the best possible
way) and effectively (doing the right thing).

The management process consists of four primary functions that managers must perform: planning,
organizing, leading, and controlling. It is important to realize that the management process is not always linear.
It does not always start with planning and continue through each step until organizational goals are achieved
because it is not possible to plan for every problem the organization will face. As the management process
proceeds, changes and modifications are made when unforeseen events arise. Managers make sure the
necessary changes are implemented and that the unity and integrity of the entire process is maintained.

The key functions in the management process are connected,

but not always linear.

Planning

Planning means defining performance goals for the

organization and determining what actions and resources are
needed to achieve the goals. Through planning, management
defines what the future of the organization should be and how
to get there. Strategic plans are long-term and affect the entire
organization. A strategic plan bridges the gap between what an
organization is and what it will become. Tactical plans
translate strategic plans into specific actions that need to be
implemented by departments throughout the organization. The
tactical plan defines what has to be done, who will do it, and the
resources needed to do it.

Organizing

Once plans are made, decisions must be made about how to best implement the plans. The organizing
function involves deciding how the organization will be structured (by departments, matrix teams, job
responsibilities, etc.). Organizing involves assigning authority and responsibility to various departments,
allocating resources across the organization, and defining how the activities of groups and individuals will be
coordinated.

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Leading

Nearly everything that is accomplished in an organization is done by people. The best planning and organizing
will not be effective if the people in the organization are not willing to support the plan. Leaders use
knowledge, character, and charisma to generate enthusiasm and inspire effort to achieve goals. Managers must
also lead by communicating goals throughout the organization, by building commitment to a common vision,
by creating shared values and culture, and by encouraging high performance. Managers can use the power of
reward and punishment to make people support plans and goals. Leaders inspire people to support plans,
creating belief and commitment. Leadership and management skills are not the same, but they can and do
appear in the most effective people.

It is very difficult to motivate people when plans involve radical change, particularly if they include downsizing
and layoffs. Many people are naturally resistant to change. When the change means loss of jobs or status,
people will be very resistant.

Controlling

There is a well-known military saying that says no battle plan survives contact with the enemy. This implies
that planning is necessary for making preparations, but when it’s time to implement the plan, everything will
not go as planned. Unexpected things will happen. Observing and responding to what actually happens is called
controlling. Controlling is the process of monitoring activities, measuring performance, comparing results to
objectives, and making modifications and corrections when needed. This is often described as a feedback loop,
as shown in the illustration of a product design feedback loop

Product design feedback loop

Controlling may be the most important of the four management

functions. It provides the information that keeps the corporate
goal on track. By controlling their organizations, managers keep
informed of what is happening; what is working and what isn’t;
and what needs to be continued, improved, or changed.

Who Directs Each Function?

Although these functions have been introduced in a particular

order, it should be apparent that the different activities happen at
the same time in any one organization. The control function
ensures that new plans must be created. Leaders often step up as
needed when a crisis or unexpected bump demands immediate
action. All managers perform all of these functions at different
times, although a manager’s position or level in the organization
will affect how much of his or her time is spent planning as
opposed to leading or to controlling. We will look more closely
at different types of managers in the next section.

TOPIC 3: TYPES OF MANAGERS AND THEIR ROLES

Managers function in a number of roles including leading, sharing information, and making decisions. How often they
play a particular role depends on the level they occupy and the type of organization. We’ll talk about the differences
between top managers, middle managers, first- line managers, and team leaders.

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Vertical Management

Vertical management, also called top-down management, refers to the various levels of management within an
organization. Managers at different levels are free to focus on different aspects of the business, from strategic
thinking to communicating information to operational efficiency. During the nineteenth century and much of
the twentieth century, vertical management was highly structured with many layers of management (as depicted
by a pyramid). In industries where processes and conditions are stable and where ongoing innovation is less
critical, the vertical structure of management can still be very efficient. Workers in labor-intensive industries
such as manufacturing, transportation, and construction need to follow established procedures and meet
specific goals. Everyone knows who is in charge and assumes the job they do today will be the same next year
or in five years.

Vertical management in a traditional organizational structure

A main disadvantage of vertical management is that it limits

information flow from the lower levels of the organization to the upper
levels (like water, information flows downhill easily). Without easy
two-way communication, top management can become isolated and out
of touch with how its plans affect core processes in the organization. It
also fosters vertical thinking. Vertical thinking refers to using
traditional and recognized methods to solve particular problems. It is
the opposite of “thinking outside of the box.” The digital age exposed
the shortcomings of management that addressed problems in formal or
bureaucratic approaches at the expense of creativity and innovation.
Today, many organizations use “flatter” structures, with fewer levels
between the company’s chief executives and the employee base. Most
organizations, however, still have four basic levels of management: top,
middle, first line, and team leaders.

Top-Level Managers

As you would expect, top-level managers (or top managers) are the “bosses” of the organization. They have
titles such as chief executive officer (CEO), chief operations officer (COO), chief marketing officer (CMO),
chief technology officer (CTO), and chief financial officer (CFO). A new executive position known as the chief
compliance officer (CCO) is showing up on many organizational charts in response to the demands of the
government to comply with complex rules and regulations. Depending on the size and type of organization,
executive vice presidents and division heads would also be part of the top management team. The relative
importance of these positions varies according to the type of organization they head. For example, in a
pharmaceutical firm, the CCO may report directly to the CEO or to the board of directors.

Top managers are ultimately responsible for the long-term success of the organization. They set long-term goals
and define strategies to achieve them. They pay careful attention to the external environment of the
organization: the economy, proposals for laws that would affect profits, stakeholder demands, and consumer
and public relations. They will make the decisions that affect the whole company such as financial
investments, mergers and acquisitions, partnerships and strategic alliances, and changes to the brand or
product line of the organization.

Middle Managers
Middle managers have titles like department head, director, and chief supervisor. They are links between the top
managers and the first-line managers and have one or two levels below them. Middle managers receive broad
strategic plans from top managers and turn them into operational blueprints with specific objectives and
programs for first-line managers. They also encourage, support, and foster talented employees within the
organization. An important function of middle managers is providing leadership, both in implementing top
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manager directives and in enabling first-line managers to support teams and effectively report both positive
performances and obstacles to meeting objectives.
First-Line Managers
First-line managers are the entry level of management, the individuals “on the line” and in the closest contact
with the workers. They are directly responsible for making sure that organizational objectives and plans are
implemented effectively. They may be called assistant managers, shift managers, foremen, section chiefs, or
office managers. First-line managers are focused almost exclusively on the internal issues of the organization
and are the first to see problems with the operation of the business, such as untrained labor, poor quality
materials, machinery breakdowns, or new procedures that slow down production. It is essential that they
communicate regularly with middle management.
Team Leaders
A team leader is a special kind of manager who may be appointed to manage a particular task or activity. The
team leader reports to a first-line or middle manager. Responsibilities of the team leader include developing
timelines, making specific work assignments, providing needed training to team members, communicating clear
instructions, and generally ensuring that the team is operating at peak efficiency. Once the task is complete,
the team leader position may be eliminated and a new team may be formed to complete a different task.

TOPIC 4: Management Roles

Roles and functions of managers in a top-down

organizational structure

We have discussed the types (levels) of managers and

some of their responsibilities but not their specific
activities. All managers must be comfortable with
three main types of activities or roles. To do their jobs,
managers assume these different roles. No manager
stays in any one role all of the time, but shifts back
and forth. These roles are leadership (or
interpersonal), informational, and decision making.
They were written about in detail in the 1970s by
Henry Mintzberg, a professor at McGill University in
Canada. His classifications are still one of the most
studied descriptors of management roles today.

Leadership and Interpersonal Roles

Which type of manager spends more time in
leadership activities? The short answer is all effective managers display leadership characteristics. Leadership
is the ability to communicate a vision and inspire people to embrace that vision.
Top managers are often required to fulfil what Mintzberg described as figurehead activities. They are the public
face of the management team and represent the business in legal, economic, and social forums. Middle
managers are also leaders, although their focus may be more on interpersonal skills, such as motivating
employees, negotiating salaries, and encouraging innovation and creativity. First-line managers lead both by
example when they actively participate in the tasks assigned to their workers and by modelling the policies and
work ethics of the organization.
Informational Roles
Informational roles involve the receiving and sending of information—whether as a spokesperson, a mentor, a
trainer, or an administrator. A top manager is a voice of the organization and has to be aware that even personal
opinions will reflect (for better or worse) on the business. With the free flow of information on the Internet, it is
very difficult for top managers to separate their personal identities from their corporate positions. For example,
there was a consumer backlash in 2017 when Uber CEO Travis Kalanick accepted a seat on President Trump’s
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economic advisory council. Kalanick initially said that he was “going to use [his] position on the council to
stand up for what’s right.” He resigned a few days later in response to the protest.
Middle managers must skilfully determine what information from top management should be shared with
others, how it should be interpreted, and how it should be presented. Similarly, they must weigh the value of
information they receive from first-line managers and employees in order to decide what to forward to top
management. If transmitted information tends to be untrue or trivial, then the manager will be viewed as a no
reliable source and his or her opinions discounted.
The informational role for first-line managers is primarily one of disseminating what they have been given and
helping the employees to see how their own contributions further organizational goals. They have a
responsibility to see that the employees understand what they need to be successful in their jobs.
Decision Making Roles

All managers are required to make decisions, but managers at different levels make different kinds of decisions.
According to Mintzberg, there are four primary types of management decision roles. These include the
following:

a. Entrepreneur. The entrepreneurs in a firm are usually top-level managers. They identify economic
opportunities, lead the initiative for change, and make product decisions.

b. Disturbance handler. Top and middle managers will react to disturbances (unexpected events) in the
organization—whether internal or external. They will decide what corrective actions should be taken to
resolve the problems.

c. Resource allocator. All levels of management will make resource allocation decisions, depending upon
whether the decision affects the entire organization, a single department, or a particular task or activity.

d. Negotiator. Depending on the effect on the organization, most negotiation is done by top and middle-
level managers. Top managers will handle negotiations that affect the entire organization, such as union
contracts or trade agreements. Middle-level managers negotiate most salary and hiring decisions.

To summarize, managers must play many roles. Some are better than others in particular roles and will tend to
be called on for those jobs. Putting a diverse management team in place will ensure that the organization has
enough managers to meet most challenges.

TOPIC 5: THE ADVANTAGES OF MANAGING PEOPLE WELL

An organization—especially a for-profit business—needs something that drives customers to buy its
products or services over a competitor’s. How do managers ensure that employees embrace that advantage
so that the company not only survives but thrives?

What Makes a Good Manager?

We have discussed details about managers and what they do, but we haven’t considered what makes a good
manager. Briefly, a good manager helps an organization succeed. Success means the following:

An organization is effective: it is accomplishing things that support the vision and mission. An organization is
efficient: it is doing things in the best possible manner.
An organization is sustainable: it is generating revenue to support its continued operation.
In the definition of management, we recognized that managers achieve results by working with people to meet
organizational goals. This implies that a good manager achieves effectiveness, efficiency, and sustainability
through the people in the organization. In this section, we will look more at how managing people well
contributes to organizational success.

Why People Are Important

People are considered resources because well-trained and experienced employees are the main source of
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effectiveness, efficiency, and sustainability. They provide effectiveness when they understand the goals of the
organization and focus their energy on tasks that support the goals. Second, people provide efficiency by being
very good at doing the tasks that support the goals. They provide sustainability because the people in an
organization are both unique and lasting. Most of the resources an organization has are not unique and can be
copied by competitors. Equipment, technology, and methods can all be copied by competitors. It may take time,
but eventually competitors can duplicate most of the things an organization has or does. But competitors cannot
copy people. The skills and experience of people and the way they are managed to achieve high performance is
very difficult for competitors to reproduce.

Name : Subject: Intro To Management And Leadership

Year & Section: Instructor: CHENIE MAY R. SUMANDE

Task/Activity No. 1:

Simon Sinek, fascinated by leaders with the capacity to inspire and have an impact in the world, bases this
discussion on a TED Talk, Sinek has discovered some remarkable patterns in how these leaders think, act, and
communicate. He wrote Start With Why: How Great Leaders Inspire Everyone to Take Action to explore the
idea of the “golden circle,” which is what he calls “a naturally occurring pattern, grounded in the biology of
human decision-making, that explains why we are inspired by some people, leaders, messages, and
organizations over others.”
Watch the full video on Sinek’s TED Talk, then answer the following questions: (10 points each).
1. Think about the management roles discussed in your reading (leadership, informational, and
decision-making). How might Sinek’s assertion that “People don’t buy what you do; they buy why
you do it” influence how a manager performs these roles?
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2. How do you think the four management functions of planning, organizing, leading, and controlling fit
in with the ideas Sinek expresses in his talk? Which function do you think he would say is most
important? Why?
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3. Sinek uses the Wright Brothers and Dr. Martin Luther King Jr. as examples of people who were
successful because they believed deeply in what they were doing and communicated from the “why”
portion of his “golden circle.” Can you identify any other examples of this type of leader? Explain your
example, and define their “why.”
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 LESSON 2
History of Management

TOPICS
Introduction to Scientific Management
Introduction to Bureaucratic Management
Introduction to Humanistic Management
Introduction to Current Developments in Management Practices
Current Developments in Management Practices

LEARNING OUTCOMES
At the end of the lesson, you should be able to:

Explain the concepts of scientific management, bureaucratic management, humanistic

management and operations management, system management, information
management, and contingency management.
Summarize the work of Frederick W, Taylor, Frank and Lilian Gilbreth, Henry Gantt,
Max Weber, Henri Fayol, Mary Parker Follete.
Explain the significance of Elton Mayo’s work.

TOPIC 1: Introduction to Scientific Management

Introduction

Scientific management is the term used to describe the works produced by the earliest theorists and researchers
in management. This section will examine some of the key contributions of pioneers in this field.

Prior to the early 1900s, there was no management theory as we think of it today. Work happened as it always
had—those with the skills did the work in the way they thought best (usually the way it had always been done).
The concept that work could be studied and the work process improved did not formally exist before the ideas
of Frederick Winslow Taylor.
The scientific management movement produced revolutionary ideas for the time—ideas such as employee
training and implementing standardized best practices to improve productivity. Taylor’s theory was called
scientific because to develop it, he employed techniques borrowed from botanists and chemists, such as
analysis, observation, synthesis, rationality, and logic. You may decide as you read more about Taylor that by
today’s criteria he was not the worker’s “friend.” However, Taylor must be given credit for creating the concept
of an organization being run “as a business” or in a “businesslike manner,” meaning efficiently and
productively.

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Frederick W. Taylor

Frederick Taylor (1856–1915) is called the Father of Scientific

Management.

Before the Industrial Revolution, most businesses were small operations,

averaging three or
four people. Owners frequently labored next to employees, knew what they
were capable of, and closely directed their work. The dynamics of the
workplace changed dramatically in the United States with the Industrial
Revolution. Factory owners and managers did not possess close relationships
with their employees. The workers “on the floor” controlled the work process
and generally worked only hard enough to make sure they would not be fired.
There was little or no incentive to work harder than the next man (or woman).

Taylor was a mechanical engineer who was primarily interested in the type of
work done in factories and mechanical shops. He observed that the owners
and managers of
the factories knew little about what actually took place in the workshops.
Taylor believed that the system could be improved, and he looked around for
an incentive. He settled on money. He believed a worker should get “a fair day’s pay for a fair day’s work”—no
more, no less. If the worker couldn’t work to the target, then the person shouldn’t be working at all. Taylor also
believed that management and labor should cooperate and work together to meet goals. He was the first to
suggest that the primary functions of managers should be planning and training.

In 1909, Taylor published The Principles of Scientific Management. In this book, he suggested that productivity
would increase if jobs were optimized and simplified. He also proposed matching a worker to a particular job
that suited the person’s skill level and then training the worker to do that job in a specific way. Taylor first
developed the idea of breaking down each job into component parts and timing each part to determine the most
efficient method of working. Soon afterward, two management theorists, Frank and Lillian Gilbreth, came up
with the idea of filming workers to analyze their motions. Their ideas have since been combined into one
process (called time and motion studies) for analyzing the most productive way to complete a task.

Scientific management has at its heart four core principles that also apply to organizations today. They include
the following: Look at each job or task scientifically to determine the “one best way” to perform the job. This
is a change from the previous “rule of thumb” method where workers devised their own ways to do the job.

 Hire the right workers for each job, and train them to work at maximum efficiency.
 Monitor worker performance, and provide instruction and training when needed.
 Divide the work between management and labor so that management can plan and train, and workers
can execute the task efficiently.

Taylor designed his approach for use in places where the work could be quantified, systemized, and standardized, such as
in factories. In scientific management, there is one right way to do a task; workers were not encouraged (in fact, they were
forbidden) to make decisions or evaluate actions that might produce a better result. Taylor was concerned about the output
more than worker satisfaction or motivation. Taylor’s work introduced for the first time the idea of systematic training
and selection, and it encouraged business owners to work with employees to increase productivity and efficiency. And he
introduced a “first-class worker” concept to set the standard for what a worker should be able to produce in a set period of
time. Scientific management grew in popularity among big businesses because productivity rose, proving that it worked.

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Today, an updated version of his original theory is used by such companies as FedEx and Amazon.
Digital Taylorism is based on maximizing efficiency by standardizing the tools and techniques for completing
each task involved with a given job. Every task is broken down to the smallest motion and translated into an
exact procedure that must be followed to complete that task. Because everyone is operating in the same
mechanistic way, it increases predictability and consistency while reducing errors. It is relatively easy for
managers to replace workers and retain the same productivity. The criticism of this type of management
approach is similar to that of Taylor’s original theory: It reduces worker creativity; it requires management to
monitor all aspects of employee behavior; and it is unforgiving to workers who don’t meet the standard.

Frank and Lillian Gilbreth

Two more pioneers in the field of management theory were Frank and
Lillian Gilbreth, who conducted research about the same time as Taylor.
Like Taylor, the Gilbreths were interested in worker productivity,
specifically how movement and motion affected efficiency. Lillian
Gilbreth. The book and film Cheaper By
the Dozen were based on her and Frank’s experiences raising twelve
children according to their theories of time and motion studies.

As stated above, the Gilbreths used films to analyze worker activity.

They would break the tasks into discrete elements and movements and
record the time it took to complete one element. In this way, they were
able to predict the most efficient workflow for a particular job. The
films the Gilbreths made were also useful for creating training videos to
instruct employees in how to work productively.

Taylor and the Gilbreths belonged to the classical school of

management, which emphasized increasing worker productivity by
scientific analysis. They differed, however, on the importance of the worker. Taylor’s emphasis was on
profitability and productivity; the Gilbreths were also focused on worker welfare and motivation. They believed
that by reducing the amount of motions associated with a particular task, they could also increase the worker’s
well-being. Their research, along with Taylor’s, provided many important principles later incorporated into
quality assurance and quality control programs begun in the 1920s and 1930s. Eventually, their work led to the
science of ergonomics and industrial psychology. (Ergonomics is the scientific discipline concerned with
understanding the interactions of humans with other elements of a system.)

Henry Gantt

Henry Gantt (1861–1919) was also an associate of Taylor. He is probably best known for two key contributions
to classical management theory: the Gantt chart and the task and bonus system.

The Gantt chart is a tool that provides a visual (graphic) representation of what occurs over the course of a
project. The focus of the chart is the sequential performance of tasks that make up a project. It identifies key
tasks, assigns an estimated time to complete the task, and determines a starting date for each element of a task.
Gantt differentiated between a terminal element that must be completed as part of a larger task. The related
terminal elements together created what he called the summary element.

The Gantt chart has multiple benefits for project management:

 It aids in the breakdown of tasks into specific elements.

 It allows for the monitoring of projected timelines.
 It identifies which tasks are dependent upon a prior task or element and which are independent and can
be completed at any time.
Gantt also promoted the task and bonus plan that modified Taylor’s “a fair day’s pay for a fair day’s work”
premise. Gantt wanted to establish a standard (average) time for a piece of work or task. Then, if a worker took
more that the standard time, his pay was docked. But if he took less time, he was paid for the additional pieces
of work and a bonus of up to 20 percent more. Also known as the progressive rate system, this plan was
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preferred by workers who were willing to work harder for additional wages.

Although Gantt is not the best known of the classic management theorists, many of his ideas are still being
used in project management.

TOPIC 2: Introduction to Bureaucratic Management

Bureaucratic management looks at how large organizations with layers of management can operate in an
efficient, rational manner. Weber and Fayol, the original proponents of this style of management, were fighting
favoritism and incompetence, common in large organizations at the time. Unfortunately, when taken to
extremes, the same concepts became associated with red tape and obstructionism.

Scientific management was concerned with individual tasks and how workers could do those tasks most
efficiently. Around the same time that Frederick Taylor was developing his theory of scientific management,
other theorists were considering entire systems, such as government departments and large businesses, and
trying to figure out how to manage them more effectively. The most influential of these theorists were Max
Weber (pronounced Vay’- ber), and Henri Fayol. Between them, they defined the characteristics of
organizations and the functions of managers that we still accept today.

Max Weber and Bureaucratic Theory

Weber was born in Germany in 1864 and grew up during the
time
when
industrialization
government, business, and society.

Weber was interested in industrial capitalism, an economic system

where
industry is privately controlled and operated for profit. Weber wanted
to know why industrial capitalism was successful in some countries and
not in others. He believed that large- scale organizations such as
factories and government departments were a
characteristic
capitalist economies.

Weber visited the United States in 1904 to study the

U.S. economy. It was here that he observed the spirit of capitalism. He noted that capitalism in the United States
encouraged competition and innovation. He also realized that businesses were run by professional managers and
that they were linked through economic relationships. He contrasted this with capitalistic practices in Germany
where a small group of powerful people controlled the economy. In Germany, tradition dictated behaviors.
People were given positions of authority based on their social standing and connections, and businesses were
linked by family and social relationships.

Weber was concerned that authority was not a function of experience and ability, but won by social status.
Because of this, managers were not loyal to the organization. Organizational resources were used for the benefit
of owners and managers rather than to meet organizational goals. Weber was convinced that organizations
based on rational authority, where authority was given to the most competent and qualified people, would be
more efficient than those based on who you knew. Weber called this type of rational organization a
bureaucracy.

Weber thought bureaucracy would result in the highest level of efficiency, rationality, and worker satisfaction.
In fact, he felt that bureaucracy was so logical that it would transform all of society. Unfortunately, Weber did
not anticipate that each of the bureaucratic characteristics could also have a negative result. For example,
division of labor leads to specialized and highly skilled workers, but it also can lead to tedium and boredom.
Formal rules and regulations lead to uniformity and predictability, but they also can lead to excessive
procedures and “red tape.” In spite of its potential problems, some form of bureaucracy is the dominant form of
most large organizations today. The “pyramid” organizational structure, with responsibility split into divisions,
departments, and teams, is based on principles of bureaucracy. It is used by nearly all large corporations.
Weber’s idea that hiring and promotion should be based on qualifications, not social standing, is built into U.S.
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labor laws.

Today, the term “bureaucracy” has taken on negative connotations. It is associated with excessive paperwork,
apathy, unresponsiveness, and inflexibility. This is unfortunate, as Weber’s ideas have spread throughout the
industrial world and transformed the way organizations are run and structured. Your school is probably
structured as a bureaucracy. If you have shopped at a department store, it is a bureaucracy, and your city
government is also a bureaucracy.

Henri Fayol and Administrative Theory

Henri Fayol was born in France in 1841. Although older than Weber, he
witnessed many of the same organizational developments in Europe that
interested Weber. Fayol was a mining engineer who became the head of a
large mining company. He wanted managers to be responsible for more
than just increasing production. The story goes that he came to this insight
when a mine was shut down after a horse broke a leg and no one at the
mine had authority to purchase another. Fayol saw this as a direct failure
of management to plan and organize the work. Following this, Fayol
began experimenting with different management structures.

He condensed his ideas and experiences into a set of management

duties and principles, which he published in 1916 in the book General and
Industrial Management. Fayol incorporated some of Weber’s ideas in his
theories. However, unlike Weber, Fayol was concerned with how workers
were managed and how they contributed to the organization. He felt that
successful organizations, and therefore successful management, were
linked to satisfied and motivated employees.

Fayol’s five duties of management were as follows:

 Foresight: Create a plan of action for the future.
 Organization: Provide resources to implement the plan.
 Command: Select and lead the best workers through clear instructions and orders.
 Coordinate: Make sure the diverse efforts fit together through clear communication.
 Control: Verify whether things are going according to plan and make corrections where needed.

These duties evolved into the four functions of management: planning (foresight), organizing (organization),
leading (command and coordinate), and controlling (control).

Fayol also proposed a set of fourteen principles that he felt could guide management behavior, but he did not
think the principles were rigid or exhaustive. He thought management principles needed to be flexible and
adaptable and that they would be expanded through experience and experimentation. Some of Fayol’s principles
are still included in management theory and practice, including the following:

1. Scalar chain: An unbroken chain of command extends from the top to the bottom of the organization.
2. Unity of command: Employees receive orders from only one superior.
3. Unity of direction: Activities that are similar should be the responsibility of one person.
4. Division of work: Workers specialize in a few tasks to become more proficient.

TOPIC 3: Introduction to Humanistic Management

As you’ve probably deduced from the name, humanistic management theory places a great emphasis on
interpersonal relationships. An earlier section discussed scientific management and how it focused on
productivity and reducing costs by developing efficiency standards based on time and motion studies. Its
critics took issue with scientific management’s emphasis on quotas and standards that were the same for all
workers.

Very little evidence exists that the new quotas set for workers were unreasonable or that laborers who could not
meet that quota were routinely fired. But concern was expressed by workers who complained about lower
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standards of workmanship and lower wages under what was called the set-piece system. Labor unions began
addressing the growing fear of the workers that all but an elite few would soon be out of work. Even the U.S.
government got involved in the conflict between managers and workers, calling on Frederick Taylor to testify
before Congress about the aims of his proposals. It was out of this context that a new management theory
evolved that examined social rather than economic factors. The humanistic approach looked to the individual
worker and group dynamics rather than to authoritative managers for effective control.

Mary Parker Follett

Mary Parker Follett is now considered the “MOTHER OF MODERN

MANAGEMENT.”

Mary Parker Follett’s teachings, many of which were published as articles in

well-known women’s magazines, were popular with businesspeople during her
lifetime. But she was virtually ignored by the male-dominated academic
establishment,even though she attended Radcliffe University
and Yale and was asked to address the London School of Economics. In recent
years her writings have been “rediscovered” by American management
academics, and she is now considered the “Mother of Modern
Management.”Follett developed many concepts that she applied to business
and management, including the following:

A better understanding of lateral processes within organizational hierarchies.

These concepts were applied by DuPont Chemical Company in the 1920s in the first matrix-style organization.
A matrix organizational structure uses a grid rather than a pyramidal system to illustrate reporting paths. An
individual may report both to a functional manager (such as sales or finance) and to a product manager.

The importance of informal processes within organizations. This is related to the idea of authority deriving from
expertise rather than position or status. For example, an informal group may form in an organization (during or
outside of official work hours) to socialize, form a union, or discuss work processes without management
overhearing.

Noncoercive power sharing, which she called INTEGRATION, to describe how power operates in an effective
organization. She wrote about the “group principle” that characterized the whole of the organization,
describing how workers and managers have equal importance and make equal contributions.

Coining the term “win-win” to describe cooperation between managers and workers. She also talked about
empowerment and facilitation rather than control.
Promoting conflict resolution in a group based on constructive consultation of equals rather than
compromise, submission, or struggle. This is known as the CONSTRUCTIVE CONFLICT concept.

Follett devoted her life’s work to the idea that social cooperation is better than individual competition. In her
1924 book Creative Experience, Follett wrote “Labor and [management] can never be reconciled as long as
labor persists in thinking that there is a [management] point of view and [management] thinks there is a labor
point of view. These are imaginary wholes which must be broken up before [management] and labor can
cooperate.”

Elton Mayo and the Hawthorne Experiments

The Hawthorne experiments were a series of studies that took place in a Western Electric plant near Chicago
during the late 1920s and early 1930s—the heyday of scientific management. The original experiment was
designed to isolate factors in the workplace that affected productivity. The researchers alternatively offered and
then took away benefits such as better lighting, breaks, shortened work schedules, meals, and savings and stock
plans. But regardless of whether the change was positive or negative, the productivity of the test subjects
increased. For example, when lighting was increased, productivity increased—as expected. What was not
expected was that as lighting was diminished, productivity still increased. It was not until the lighting levels
were near candlelight luminosity and the women could not see their work that productivity decreased. At this
point, an Australian-born sociologist named Elton Mayo became involved.

Mayo visited the Hawthorne facility and advised the researchers to adjust how they interacted with the workers
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(subjects). A new trial was started with a smaller group of subjects. Again, benefits were both added and
subtracted. Previous experiments had gathered data from the subjects by asking simple “yes or no” questions to
more easily quantify their responses. But instead of “yes or no” questions, Mayo advised the researchers to
employ the nondirective interview method. This allowed the researchers to be more informal and social and to
develop relationships with the workers. Mayo discovered that there were several reasons why productivity
increased despite the withdrawal of benefits, including the following:
 A feeling of group cohesion
 The friendlier attitude of the researchers (supervisors)
 The attention that being part of the study brought to the individuals

In interviews with the test subjects, it was discovered that the reason productivity increased was because the
subjects were simply “having more fun.” Mayo theorized that workers were motivated more by social dynamics
than by economic or environmental factors.

Mayo published his findings in 1933 in “The Human Problems of an Industrialized Civilization.” In this
treatise, Mayo predicted that a group with negative behaviors and few social bonds would have very little
chance of succeeding at the task. A group with a high sense of mission and close team awareness would be
the most likely to achieve its goals. The remaining teams would have mixed degrees of success. The implication
for organizations, of course, is to foster groups with a sense of mission and strong interpersonal relationships.

TOPIC 4: Introduction to Current Developments in Management

In the twenty-first century, organizations face many new

challenges. Some people would argue that society and the
economy have changed so radically that the last century’s
management practices and theories are no longer relevant.
The truth is management has become more important than
ever. Almost everything we do today as individuals or
organizations requires us to interact with large-scale
institutions, such as government agencies, banks, health-care
providers, insurance
companies, school systems, universities, online retailers, and
technology service providers. How has management theory
and practice evolved to manage this new organizational and
business environment? Interestingly, it has become both more specific and more general.

Forces Shaping Management

Several forces are significantly shaping management practices today, including the pace of change, technology,
globalization, diversity, and social expectations. Let’s look at each of these in more detail.

1. The Pace of Change

Managers must understand that society, politics, the economy, and technology are changing at an unprecedented
rate. In 2001, Ray Kurzweil proposed that in the twenty-first century our rate of progress would double every
decade.[1] This means that over the next one hundred years, we will experience changes that would have taken
twenty thousand years in the past. This presents a vexing problem for management. On one hand, managers
need predictability and stability to develop and implement plans effectively. On the other hand, they need
adaptability and flexibility to respond to opportunities. How does management provide both stability and
flexibility?

2. Technology

The primary factor driving change is the development of computer and information technology. Fifty years ago,
almost no one knew about computers except from science fiction books and movies. Today nearly everyone
uses a smartphone with more power than the computers that guided rockets to the moon in 1969. Many of the
routine jobs analyzed by Frederick Taylor and the Gilbreths are now automated, done by computers and robots.
It has been estimated that robots will perform 50 percent of current jobs within twenty years. What is the role of
management when machines instead of people are doing work?
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3. Globalization
Globalization refers to the increasing ease of flow between countries. It includes economic, political, social, and
cultural interactions. In particular, economic globalization is creating one global marketplace, making it easier
to conduct business across borders. Globalization has allowed companies to perform many manufacturing jobs
in low labor-cost countries.

4. Diversity

Since the turn of the century, the U.S. workforce has become more diverse in almost all dimensions, including
race, gender, ethnicity, and age. In 1950, women made up about 30 percent of the workforce; in 2015 women
made up about 47 percent of the workforce. By 2024, ethnic and racial minorities are expected to comprise 40
percent of the workforce. And for the first time, there are now five generations of workers in the workforce,
from veterans born between 1928 and 1946 to iGens born after 1994. This diversity provides a tremendous
resource to organizations. People from different backgrounds have unique perceptions, experiences, and
strengths. This can promote creativity and innovation that stimulates unique problem solving. But it also brings
different expectations and norms about behavior and attitudes. How can management capitalize on the
advantages of diversity while accommodating differences?

5. Social Expectations

From the start of the Industrial Revolution until the middle of the twentieth century, management could look
inward to determine how to best use resources to meet organizational goals. Although government passed laws
to address the worst abuses, organizations primarily interacted with the external environment through the
marketplace. The expectation of public, private, and civic organizations was that they would provide the goods
and services society required. This attitude also began to change around the middle of the twentieth century as
organizations, especially businesses, were viewed as social, as well as economic, actors. The positive and
negative impacts of organizations on the wider environment—alongside the products and services they
provided—were also considered outputs of production. Now managers have to satisfy not only their customers
but also a wider set of stakeholders, from government agencies to community groups. How are managing
stakeholders incorporated into management theory and practice?

TOPIC 5: Current Developments in Management

We don’t yet have the answers to most of these questions. No “grand theories” like those we have discussed
previously in this module have emerged to address these new challenges. That is not to say that management
has not responded; it has, in two ways:

Management has become more specific with the formation of different disciplines. Managers now focus
on specific aspects of organizational management: operations management, financial management,
marketing management, human resource management, etc. By limiting the number of factors and issues
they must deal with, managers can develop practices that address the specific issues they face in their
discipline.
Management has also become more general. Managers are not provided with an instructional manual
that tells them how to manage. Instead, they are given a toolbox of different theories and practices.
Effective managers need to know what tool to use and how to use it in different circumstances.

Operations Management

Operations management is concerned with all of the physical processes involved in producing and delivering
goods and services to customers. Operations management is the “guts” of a manufacturing or service company.
It is concerned with all aspects of converting materials and labor into goods and services as efficiently as
possible. Operations managers must work closely with every department in the business to ensure that products
are manufactured as efficiently as possible. The same forces that are transforming organizations and
management are transforming all aspects of operations management, from design to production.

Operations managers are involved with the initial product design to incorporate features that facilitate

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production. Sometimes small changes that don’t affect function, such as the number of different types of screws
used in an assembly, can have a significant impact on production costs. Today, many manufacturing firms are
using computer-aided design that will translate design plans directly into instructions for computer-controlled
machinery and robotics. Operations managers also manage the supply chain to find the best sources for high-
quality materials and supplies at the lowest cost. Operations managers have become international operations
managers, as supplies come from anywhere in the world and manufacturing can be done anywhere in the world.

Operations managers are also responsible for materials inventory. This consists of materials that will be
used in production or for performing services. Some amount of inventory is needed to prevent delays in
production or servicing. The worst thing that can happen to an auto manufacturer is to have an assembly line
stop because of a shortage of a basic part, such as spark plugs or tires. On the other hand, maintaining
inventories is a significant cost for companies, so they want to minimize the amount of inventory on hand.
Operations managers must balance the need for maintaining sufficient inventory with the need for reducing
costs. They now schedule deliveries and manage inventory using techniques such as just-in-time to optimize the
amount of inventory on hand. This frequently involves developing long-term, cooperative partnerships with
suppliers. Inventory management is a huge concern for Amazon, for instance, which maintains an inventory of
millions of products. It has developed specialized techniques to maintain enough inventory to avoid lost sales
without holding costly excess inventory.

All of these activities support operation management’s main function: the manufacturing of products or the
delivery of services. Operations managers must be concerned not only with cost and quantities but also be
responsible for delivering quality. They design and supervise production processes and service delivery using
modern methods such as lean manufacturing and Six Sigma. Six Sigma is a systematic set of practices used to
reduce defects or complaints. The goal of Six Sigma is fewer than 3.4 defects per one million parts produced,
transactions performed, or services delivered.

Finally, operations management works with marketing and sales to make sure goods and services are delivered
where and when they are needed. They use sophisticated technology, such as point-of-sale data collections and
integrated ordering systems, to forecast demand for products and services. This information is feedback
through the entire system, from ordering materials and supplies to scheduling production. Operations
management is responsible for making sure everything and everyone is working together to deliver what the
customer expects.

Information Management

If operations management is the guts of a business, information management is the nervous

system. Organizations today depend on the availability and accuracy of information to make
decisions at every level. Information management is concerned with the collection,
preservation, storage, processing, and delivery of information. The purpose of information
management is to make sure information is available to the right people at the right time
in a form that they can apply.

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Information management is not a new concept. Businesses and organizations of all sorts have always required
information about their internal and external conditions to manage effectively. Although the need for
information is not new, the volume of information available, the means of gathering information, and the
methods of processing information into useful knowledge have all been transformed.

A recent development in information management is the use of big data. Big data refers to incredibly large
amounts of data available to organizations today and how that data can be analyzed for useful information. Big
data comes from a variety of sources, including social media, business transactions, government interactions,
and education and health experiences, to name a few. It also comes in a variety of formats from structured,
numeric data to unstructured text data, social media, and telephone calls.

Systems Approach to Management

Organizations operate as open systems

A systems approach to management recognizes that organizations are open systems that interact with and are
dependent on their environment. In a continual process, they obtain necessary inputs, transform the inputs into
finished goods and services, and deliver their outputs to the market. The organization gets feedback from the
market in two forms. First, it receives revenue. The revenue provides finances to support the organization and to
acquire additional inputs needed for production. Revenue can also finance organizational improvements, such
as upgraded equipment, development of new or improved products and services, or expansion of facilities. Any
revenue that is not reinvested in supporting or improving the organization can be disbursed to owners as
dividends.

The second form of feedback is information on how well the organization is doing. Organizations get direct
information from customer surveys, customer service complaints, and social media. Starbucks, for example,
started a customer blog to get feedback on the customer’s experience. Based on the results, it made changes to
speed up service even though that increased cost.

The systems approach to management focuses on performance of the whole production process, including the
customers’ process. The process is usually split by specialties within the company, and each specialist tries to
optimize his contribution. But more efficiency for one function may cause delays or bottlenecks elsewhere in
the process, hurting overall production. The systems approach analyzes these interactions and makes decisions
to improve overall production.

The system model also shows that companies are open to environmental influence. Factors such as political
instability, economic conditions, consumer tastes, demographics, legal requirements, and the physical
environment all can affect an organization. Successful organizations must be able to detect, understand, and

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respond effectively to changes in the external environment. These factors are discussed in more detail in the
following module.

Contingency Management

Unlike the topics discussed earlier, contingency management is not a specific function. It is a general approach
to management practice that basically says there is no one best way to manage.

The management theories we discussed earlier had implicit assumptions that management concepts were
universal. That is, what worked in one organization would work in others. Certainly some modifications would
be made for specific circumstances, but the principles of scientific management and bureaucracy were assumed
to apply in any organization. The contingency view rejects this assumption. In contingency management, every
situation is considered unique. Managers must adapt theory and practice to match the situation by identifying
the key contingencies, or factors, in the situation.

Contingencies might include the industry in which the company operates. For example, an effective
organizational structure for an Internet company such as Google would not be the same as a manufacturing
company such as General Motors. Another contingency factor is the country in which the company operates.
U.S. management methods do not work well in France. The type of employee is also a contingency factor—
incentive systems that work for manual laborers do not work for knowledge workers. Effective managers need
to be able to interpret the contingencies of a situation to determine which approach would be more effective.

Name : Subject: Intro To Management And Leadership

Year & Section: Instructor: CHENIE MAY R. SUMANDE

Task/Activity : Answer the following questions (10 points each)

1. In your reading, you studied early scientific management theorists, including Frederick W. Taylor,
Frank and Lillian Gilbreth, and Henry Gantt. Do you see any of their ideas in modern-day workplaces?
Cite examples.
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__________________________________________________________________________________________
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2. Why do you think the term “bureaucratic” has negative connotations in today’s business environment?
What aspects of bureaucracy do people tend to criticize? Are there any aspects of bureaucracy that you
think are important in today’s businesses?
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3. In the Hawthorne experiments, Elton Mayo discovered that workers performed better when they were
“having more fun,” leading him to theorize that workers are motivated more by social dynamics than by
economic or environmental factors. How do you think Mayo’s theory is reflected in companies today?
Cite examples.
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4. Which of the current developments in management practice do you think managers need to watch most
closely? Why?
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 LESSON 3 PLANNING AND MISSION

TOPICS
Pros and Cons of Planning
Introduction to the Planning Cycle
Types of Plans and Common Planning Tools

LEARNING OUTCOMES
At the end of the lesson, you should be able to:

Explain benefits of planning, drawbacks and stages of the planning cycle.

Differentiate between the user of long term plans, short term plans and operation
plan.
Explain how policies, procedures and regulations impact operational plans.

TOPIC 1: Pros and Cons Planning

Planning is the process of setting goals and defining the actions required to achieve the goals.

Planning begins with goals. Goals are derived from the vision and mission statements, but these statements
describe what the organization wants to achieve, not necessarily what it can achieve. The organization is
affected both by conditions in its external environment—competitors, laws, availability of resources, etc.—and
its internal conditions—the skills and experience of its workforce, its equipment and resources, and the abilities
of its management. These conditions are examined through a process called a SWOT analysis. (SWOT will be
discussed in greater detail in another module.) Together, the vision and mission statements and the results of the
situation analysis determine the goals of the organization. This idea is illustrated by the figure that follows.

Using the mission, vision, and values of a company,

along with situation analysis, can help the company set
goals.

The rest of the planning process outlines how the goals are
to be met. This includes determining what resources will
be needed and how they can be obtained, defining tasks that
need to be done, creating a schedule for completing the
tasks, and providing milestones to indicate progress toward
meeting goals. The planning process will be discussed in
more detail in the following section.
Benefits of Planning
In today’s chaotic environment, planning more than a few
months in advance may seem futile. Progress, however, is
rarely made through random activity. Planning does provide benefits that facilitate progress even when faced
with uncertainty and a constantly changing environment. Some of the benefits include the following:

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 a. Planning provides a guide for action. Plans can direct everyone’s actions toward desired outcomes.
When actions are coordinated and focused on specific outcomes they are much more effective.
b. Planning improves resource utilization. Resources are always scarce in organizations, and managers
need to make sure the resources they have are used effectively. Planning helps managers determine
where resources are most needed so they can be allocated where they will provide the most benefit
c. Plans provide motivation and commitment. People are not motivated when they do not have clear
goals and do not know what is expected of them. Planning reduces uncertainty and indicates what
everyone is expected to accomplish. People are more likely to work toward a goal they know and
understand.
d. Plans set performance standards. Planning defines desired outcomes as well as mileposts to define
progress. These provide a standard for assessing when things are progressing and when they need
correction.
e. Planning allows flexibility. Through the goal-setting process, managers identify key resources in the
organization as well as critical factors outside the organization that need to be monitored. When changes
occur, managers are more likely to detect them and know how to deploy resources to respond.

Drawbacks to Planning

Planning provides clear benefits to organizations, but planning can also harm organizations if is not
implemented properly. The following are some drawbacks to planning that can occur:

a. Planning prevents action. Managers can become so focused on planning and trying to plan for every
eventuality that they never get around to implementing the plans. This is called “death by planning.”
Planning does little good if it does not lead to the other functions.
b. Planning leads to complacency. Having a good plan can lead managers to believe they know where the
organization is going and how it will get there. This may cause them to fail to monitor the progress of
the plan or to detect changes in the environment. As we discussed earlier, planning is not a one-time
process. Plans must be continually adjusted as they are implemented.
c. Plans prevent flexibility. Although good plans can lead to flexibility, the opposite can also occur. Mid-
and lower-level managers may feel that they must follow a plan even when their experience shows it is
not working. Instead of reporting problems to upper managers so changes can be made, they will
continue to devote time and resources to ineffective actions.
d. Plans inhibit creativity. Related to what was said earlier, people in the organization may feel they must
carry out the activities defined in the plan. If they feel they will be judged by how well they complete
planned tasks, then creativity, initiative, and experimentation will be inhibited. Success often comes
from innovation as well as planning, and plans must not prevent creativity in the organization.
TOPIC 2: Introduction to the Planning Cycle

Remember that planning is only one of the management functions and that the functions themselves are part of
a cycle. Planning, and in fact all of the management functions, is a cycle within a cycle. For most organizations,
new goals are continually being made or existing goals get changed, so planning never ends. It is a continuing,
iterative process.

Stages in the Planning Cycle

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Define objectives

The first, and most crucial, step in the planning process is to determine what is to be accomplished during the
planning period. The vision and mission statements provide long-term, broad guidance on where the
organization is going and how it will get there. The planning process should define specific goals and show how
the goals support the vision and mission. Goals should be stated in measurable terms where possible. For
example, a goal should be “to increase sales by 15 percent in the next quarter” not “increase sales as much as
possible.”

Develop premises
Planning requires making some assumptions about the future. We know that conditions will change as plans are
implemented and managers need to make forecasts about what the changes will be. These include changes in
external conditions (laws and regulations, competitors’ actions, new technology being available) and internal
conditions (what the budget will be, the outcome of employee training, a new building being completed).
These assumptions are called the plan premises. It is important that these premises be clearly stated at the start
of the planning process. Managers need to monitor conditions as the plan is implemented. If the premises are
not proven accurate, the plan will likely have to be changed.

Evaluate alternatives
There may be more than one way to achieve a goal. For example, to increase sales by 12 percent, a company
could hire more salespeople, lower prices, create a new marketing plan, expand into a new area, or take over a
competitor. Managers need to identify possible alternatives and evaluate how difficult it would be to implement
each one and how likely each one would lead to success. It is valuable for managers to seek input from
different sources when identifying alternatives. Different perspectives can provide different solutions.

Identify resources
Next, managers must determine the resources needed to implement the plan. They must examine the resources
the organization currently has, what new resources will be needed, when the resources will be needed, and
where they will come from. The resources could include people with particular skills and experience,
equipment and machinery, technology, or money. This step needs to be done in conjunction with the previous
one, because each alternative requires different resources. Part of the evaluation process is determining the cost
and availability of resources.

Plan and implement tasks

Management will next create a road map that takes the organization from where it is to its goal. It will define
tasks at different levels in the organizations, the sequence for completing the tasks, and the interdependence of
the tasks identified. Techniques such as Gantt charts and critical path planning are often used to help establish
and track schedules and priorities.

Determine tracking and evaluation methods

It is very important that managers can track the progress of the plan. The plan should determine which tasks are
most critical, which tasks are most likely to encounter problems, and which could cause bottlenecks that could
delay the overall plan. Managers can then determine performance and schedule milestones to track progress.
Regular monitoring and adjustment as the plan is implemented should be built into the process to assure things
stay on track

The Planning Cycle: Essential Part of Running a Business

Following the planning cycle process assures the essential aspects of running a business are completed. In
addition, the planning process itself can have benefits for the organization. The essential activities include the
following:
Maintaining organizational focus: Defining specific goals requires managers to consider the vision, mission,
and values of the organization and how these will be operationalized. The methods and selected goals can
demonstrate that the vision, mission, and values statements are working documents that are not just for show
but prescribe activities.
Encouraging diverse participation: Planning activities provide an opportunity for input from different
functions, departments, and people. Some organizations establish planning committees that intentionally
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include people from diverse backgrounds to bring new perspectives into the planning process.
Empowering and motivating employees: When people are involved in developing plans they will be more
committed to the plans. Allowing diverse input into the planning cycle empowers people to contribute and
motivates them to support the outcomes.
TOPIC 3: Types of Plans and Common Planning Tools

Leo Tolstoy wrote “Happy families are all alike; every unhappy family is unhappy in its own way.” The famous
author wanted to point out that for a marriage to succeed (be happy), it had to succeed in several key
aspects. Organizations are like marriages in this regard. There are key planning tools that every organization
must use to ensure success.

Long-term and Short-term Plans

When you decided to attend college, you had a long-term plan in mind. You would spend the next four or five
years preparing to become a teacher, a businessperson, or perhaps an ecologist. Or, you may have committed
two or three years to become a nurse, a medical technician, or an electrician. Your long-term goal was
necessary to make sure that your daily activities would help you achieve your desired outcome. You could have
just enrolled in a school and taken classes that looked interesting, but then where would you be in four years?
You most likely would not have taken the courses required to qualify you for the job you want. An
organization, especially a business, is not so different. It also needs a long-term plan to make sure that the daily
activities of its employees are contributing to the mission and value statements of the organization.

A long-term plan is crucial to the ultimate success of the organization. A long-term plan for many businesses,
such as construction, hospitality, or manufacturing, generally extends four to five years into the future. For other
faster-changing industries, especially technology companies, a long-term plan may only look two or three years
into the future. After that, it becomes too difficult to predict the future with any degree of certainty.

Top management is responsible for the development of the long-term plan. It is up to the CEO to make sure that
changing conditions (both external and internal) are reflected in the organization’s long-term plan. The larger
and more complex the organization, the larger and more complex the long-term plan will be to include all of the
individual departments and functions.

Short-term plans generally allocate resources for a year or less. They may also be referred to as operational
plans because they are concerned with daily activities and standard business operations. Like long-term plans,
short-term plans must be monitored and updated, and this is the role of middle- and first-level management.
Different managerial levels have responsibility for implementing different types of short-term plans. For
example, a department manager may
be comfortable implementing an operational plan for the entire year for her department. A marketing manager
may direct a three- to four-month plan that involves the introduction of a new product line. A team leader may
only be comfortable planning and implementing very specific activities over the period of a month.

Organizational Plan Hierarchy: The figure above summarizes the relationship between these types of
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management planning

Operational Plans: Standing Plans and Single-Use Plans

An operational plan describes the specific goals and objectives and milestones set by an organization during a
specific period. (Objectives are specific tasks undertaken to meet broader goals. A goal may be to increase
product sales by 3 percent; an objective may be to hire two additional sales agents.) It will allocate the tangible
resources (labor, equipment, space) and authorize the financing necessary to meet the objectives of the plan.
There are two types of operational plans: standing plans and single-use plans.

Standing plans are plans designed to be used again and again. Examples include policies,
procedures, and regulations. The advantage of standing plans is that they foster unity and fairness
within an organization and help to support stated organizational values. Managers don’t have to
make unique decisions already addressed by various organizational policies. Standing plans also
save time because managers know in advance how to address common situations. Finally, standing
plans aid in the delegation of work, because employees are already familiar with the procedures and
regulations followed by the organization.

Single-use plans refer to plans that address a one-time project or event. The length of the plans
varies, but the most common types are budgets and project schedules. The obvious advantage of a
single-use plan is that it can be very specific in how it addresses the needs of a particular situation.

Policies, Procedures, and Regulations

As stated above, the most common examples of standing use plans are policies, procedures, and regulations.
These plans are usually published and handed out to new hires or posted on the organization’s employee
website for easy reference.
Policies provide broad guidelines for the smooth operation of the organization. They cover things like hiring
and firing, performance appraisals, promotions, and discipline. For example, a company may have a policy to
encourage recycling in the workplace or a policy that prohibits personal cell phone use in manufacturing areas.

Procedures are steps to be followed in established and repeated operations. Procedures should reflect the
policies of the company and support the organization’s long-term goals. Procedures may also detail steps that
should be followed to ensure employees are disciplined in a fair and unbiased manner. For example, if
employees feel that other employees interacted with them in an inappropriate manner, then they should follow
the procedure for bringing this to management’s attention. Or, the organization may establish procedures for
what to do in cases of emergencies, such as a fire or toxic spill.
Regulations refer to what is allowable and what is strictly prohibited in an organization. In other words, a
regulation is a kind of rule that addresses general situations. In many hospitals and laboratories, for example,
there are safety regulations against wearing open-toed shoes or shoes with slippery soles. State and federal
governments frequently issue regulations for industries that impact public safety.
The Role of Budgets in the Planning Process
Refer to the “Organizational Plan Hierarchy” figure earlier and locate the box labeled “Budgets.” Notice that
budgets are examples of single-use, short-term plans. An organization’s budget is a document that details the
financial and physical resources allocated to a project or department. They are single-use plans because they are
specific to a particular period or event. For example, departments may have a hiring budget that allocates a
certain number of positions and a total salary value for a calendar year. Next year, that budget may be the
same or it may change, depending upon conditions in the organization. But it cannot be assumed that the
budget will stay the same. Zero-based budgets look at each budget as if it were brand new and require
managers to justify each of the budgeted items. This process ensures that budgets are closely tied to the latest
organizational goals.

Managers deal with a variety of budget types:

 Financial budgets include balance sheets, income/expense statements, and statements of cash flow.
 Operating budgets project revenue against expenditures.
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  Nonmonetary budgets allocate resources such as labor, workspace, and equipment use.
 Fixed budgets are budgets that do not change with increased or decreased activities, such as sales
revenue. They are also called static budgets.
Flexible budgets will vary with the level of activity (grow or be reduced according to changing conditions).
Budgets are a very important planning tool, and organizations take their budgeting process very seriously. Some
managers spend most of their time making sure that the expenses and projects they control do not exceed
authorized spending limits. To routinely “go over budget” is a sign of a poor planning—and planning is one of
the basic management functions. In some cases, to routinely come in under budget is also viewed negatively,
because with more accurate budgeting those committed resources could have been allocated to other projects.
Often, projects compete for limited resources so the best budget is the one that most closely projects actual
expenses and revenue.

Forecasting, Scenario Planning, and Contingency Planning

Forecasting is simply making a prediction about the future. Anyone can make a forecast—the trick is to be right
or close enough so that important planning decisions can be based on the forecast. Some “botched” forecasts by
business leaders follow:
Scientific forecasting is using mathematical models, historical data, and statistical analysis to make predictions
about what will happen in the future. Businesses use short-term forecasting all the time when creating
budgets and anticipating expenses. Mostly, these forecasts are based on what they sold and what they paid
providers in the recent past. Long- range forecasting requires both quantitative numerical data and qualitative
data based on expert opinions and insights. Often, organizations will create a number of long-range forecasts
based on “best-case” and “worst-case” scenarios. They will then make plans on how they would respond to each
situation and, as time goes on, they will update and adapt the long-term plan.

One other important type of planning is the contingency plan. A contingency plan describes what will happen
in a possible—but not expected—situation. Usually, contingency plans are designed to handle emergencies. For
example, airports have contingency plans for plane crashes on takeoffs or landings, and popular tourist
attractions have begun developing contingency plans in case of terrorist threats.

An example of the critical importance of contingency planning involves the Deepwater Horizon oil spill in the
Gulf of Mexico in 2010. Eleven people lost their lives and seventeen were badly injured when an explosion on
an oil rig released almost five million barrels of oil into the Gulf of Mexico. It was the worst marine oil spill in
history, and its effects were even more devastating because BP Oil did not have contingency plans in place for
that kind of disaster. The spill went on for months while BP and its partners tried to figure out how to shut off
the oil’s source. Even though BP spent $62 billion on the response and cleanup activities, there was extensive
damage to marine and wildlife habitats and fishing and tourism industries. Getting employees involved in
planning may help prevent tragedies similar to this one.

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Name : Subject: Intro To Management And Leadership
Year & Section: Instructor: CHENIE MAY R. SUMANDE

Task/Activity No.3:

1. Think of a company whose product or service you feel strongly about (positive or
negative). Research that company’s mission statement. Do you think the company is achieving its
mission? Be sure to include the company, the mission statement, and reasons why you think the
company is or isn’t achieving its mission.

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2. In your reading, we identified six steps of the planning process:

a. Define objectives
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b. Develop premises
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c. Evaluate alternatives
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d. Identify resources
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e. Plan and implement tasks
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__________________________________________________________________________________________
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f. Determine tracking and evaluation methods
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3. Which step do you think businesses most often overlook or fail to adequately address when making
plans? Why?

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 LESSON 4 DECISION MAKING

TOPICS
Introduction to Barriers to Individual Decision Making and Style of Decision Making.
Styles of Decision Making.
Introduction to Rational Decision Making vs other other types of decision making
Managing Group Decision Making

LEARNING OUTCOMES
At the end of the lesson, you should be able to:

Describe the barriers to decision making.

Identify common styles of decision making.
Describe techniques managers can use to guide and reach consensus in groups.

TOPIC 1: Introduction to Barriers to Individual Decision Making and Styles of Decision

making
Information-Related Barriers
Almost every decision is based at least in part on information that the decision maker trusts. The reliability and
use of that information can potentially lead to multiple problems.
One of the most obvious information-related problems occurs when the information is either incorrect or
incomplete. Trusting information that is faulty leads to many wrong deductions and conclusions. If information
is incomplete, even if the decision maker is aware of that fact, uncertainty is introduced, and any decision based
on that partial information could prove to be misguided.

On the other hand, a contrasting problem can arise when there is too much information available. An
information overload can make it difficult to grasp the big picture and recognize which pieces of information
are most important. Another problem it can create is that large sets of data may contain data that seems
contradictory, leading the analyst to confusion or uncertainty and an inability to synthesize it as a whole.

An overabundance of information can also lead to an inability to process everything to the decision maker’s
satisfaction. The result can be a harmful delay in the decision-making process as the over-abundance of
information is being considered for an undue amount of time. Similarly, if the decision maker is excessively
concerned to find every possible piece of information, the same problem can arise.

Circumstance and Time-Related Barriers

A variety of difficulties can also arise from the circumstances in the midst of which a decision maker must
work. One of the most common issues is stress, which can arise from a great number of sources. If the decision
maker is experiencing abnormal levels of stress either in his personal life or work environment, that can often
lead him to poor decisions that are out of character.

He may be less objective or less disciplined in following the decision-making process he usually trusts.
Recognizing high stress levels can provide the opportunity to intentionally protect against those tendencies.
Also, when time is a restricting factor, that often contributes to poor decisions. Unsurprisingly, evidence

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suggests that when decision makers feel rushed for time, their judgment often suffers. This is true even when
there actually is sufficient time for the decision-making process: just the feeling of a lack of time causes
problems. It is important to commit to taking sufficient time for decisions if at all possible (and it usually is).

Cognitive Biases

Even when circumstances are conducive to good decisions and a sufficient supply of accurate information is
available, there are still a number of ways in which decision makers might be at fault in their manner of
judgment. For instance, their perception can be distorted. Understanding how this happens is relevant for
managers because they make many decisions daily. They must also deal with many people making assessments
and judgments.

Faulty ways of thinking during the analysis stage are often referred to as cognitive biases. A few common ones
follow:

Confirmation Bias
Confirmation bias is the tendency to seek out or prefer information and opinions that we believe will confirm
our own judgment. We want to be confirmed, so we pay more attention to information that we think supports
us, and we ignore or diminish the significance of information to the contrary. We also tend to accept
information at face value that confirms our preconceived views while being critical and skeptical of information
that challenges these views. For example, if you believe your new diet of bananas and almonds is the healthiest
foods to eat, you will search for and accept any supporting information on the virtues of bananas and almonds,
and ignore and discount any contradictory information.

Framing Bias
Framing bias is the tendency to be influenced by the way that a situation or problem is presented. Framing a
message with a positive outcome has been shown to be more influential than framing a message with a negative
outcome. For example, public health messages that depict nonsmokers as happy and popular with sparkling
white smiles has proven more effective than displaying a smoker’s diseased lung. Numerous studies have
demonstrated framing effects in our everyday lives.

Hindsight Bias
Hindsight bias is the tendency to believe falsely that we would have accurately predicted the outcome of an
event after that outcome is actually known. When something happens and we have accurate feedback on the
outcome, we appear to be very good at concluding that this outcome was relatively obvious. For example, a lot
more people claim to have been sure about the inevitability of who would win the Super Bowl the day after the
game than they were the day before.

Halo Effect
Halo effect concerns the preferential attitude that we have toward certain individuals or organizations. Because
we are impressed with their knowledge or expertise in a certain area or areas, we unconsciously begin to give
their opinions special credence in other areas as well.

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This would, for example, be exhibited when sports stars express their political opinions and the public gives
strong weight to what they say. There is no logical reason to think that they have sound political opinions just
because they have great skill in the realm of sports.

Overconfidence Bias
Overconfident bias is particularly easy to understand. It basically amounts to the idea that an individual decision
maker trusts his own judgment (usually his intuition) and allows that judgment to override evidence to the
contrary. His opinion counts more strongly to him than that of experts who are more knowledgeable and often
more than factual data that contradicts his views. From an organizational standpoint, as managers and
employees become more knowledgeable about an issue, the less likely they are to display overconfidence. And
overconfidence is most likely to arise when employees are considering issues outside of their area of expertise.

Status-Quo Bias
Some decision makers prefer to avoid change and maintain the status quo. This desire, perhaps unrecognized,
often leads them to favor ideas that do not lead to significant changes. Evidence and ideas that support change
are neglected as a result.

Pro-Innovation Bias
Pro-innovative bias is the opposite of the status-quo bias. Rather than prefer things to stay the same, the
innovation bias gives preference to any new and innovative idea simply because it represents something new.
The feeling is that new ideas must be better than old ones. Even if no objective evidence supports the new idea
as useful and helpful, it is still attractive just by virtue of being new.

TOPIC 2: Styles of Decision Making

There are two ends of a spectrum from which to approach this: satisficing and optimizing. Satisficing—a
combination of the words “satisfy” and “suffice”—means settling for a less-than-perfect solution when
working with limited information. Optimizing involves collecting as much data as possible and trying to find
the optimal choice. Generally, decision makers don’t pick one or the other—you can think of satisficing to
optimizing as a spectrum, and each decision starts with an assessment of how critical it is. A branch of
management called management science offers methods for solving complex problems.

Intuitive vs. Rational

One way to describe this is a conscious and a subconscious perspective. The subconscious mind is automatic
and intuitive, rapidly consolidating data and producing a decision almost immediately. The subconscious
mind works best with repeated experiences. The conscious, rational mind requires more effort, using logic
and reason to make a choice. For example, the subconscious mind throws a ball and hits the target, while the
conscious mind slowly describes the physics and forces required to complete the action.

Combinatorial vs. Positional

Aron Katsenelinboigen proposed this description based on how the game of chess is played. A
combinatorial player has a final outcome in mind, making a series of moves that try to link the initial position
with the final outcome in a firm, narrow, and more certain way. The name comes from the rapid increase in the
number of moves he must consider for each step he looks ahead. The positional decision-making approach is
“looser,” setting up strong positions on the board and preparing to react to the opponent. A player using this
strategy increases flexibility, creating options as opposed to forcing a single sequence.

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 TOPIC 3: Introduction to Rational Decision Making vs. Other types of Decision
Making

The Rational Decision-Making Process

The rational decision-making process involves careful, methodical steps. The more carefully and strictly these
steps are followed, the more rational the process is. We’ll look at each step in closer detail.

Step 1: Identify the Problem

Though this starting place might seem rather obvious, a failure to identify the problem clearly can derail the
entire process. It can sometimes require serious thought to find the central issue that must be addressed. For
example, you have taken a new job and you may initially decide you need to find a new car for commuting
back and forth from work. However, the central problem is that you need a reliable way to commute to and
from work.

Step 2: Establish Decision Criteria

In this step, the decision maker needs to determine what is relevant in making the decision. This step will bring
the decision makers, and any other stakeholder’s, interests, values and preferences into the process. To continue
our example, let’s assume you are married. Some of the criteria identified might include budget, safety,
functionality, and reliability.

Step 3: Weigh Decision Criteria

Because the criteria identified will seldom be equally important, you will need to weight the criteria to create
the correct priority in the decision. For example, you may have weighted budget, safety, and reliability as the
most important criteria to consider, along with several other slightly less critical criteria.

Step 4: Generate Alternatives

Once you have identified the issue and gathered relevant information, now it is time to list potential options for
how to decide what to do. Some of those alternatives will be common and fairly obvious options, but it is often
helpful to be creative and name unusual solutions as well. The alternatives you generated could include the
types of cars, as well as using public transportation, car pooling and a ride-hailing service.

Step 5: Evaluate Alternatives

After creating a somewhat full list of possible alternatives, each alternative can be evaluated. Which choice is
most desirable and why? Are all of the options equally feasible, or are some

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unrealistic or impossible? Now is the time to identify both the merits and the challenges involved in each of the
possible solutions.

Step 6: Select the Best Alternative

After a careful evaluation of alternatives, you must choose a solution. You should clearly state your decision so
as to avoid confusion or uncertainty. The solution might be one of the particular options that was initially listed,
an adaptation of one of those options, or a combination of different aspects from multiple suggestions. It is also
possible that an entirely new solution will arise during the evaluation process.

Data, Logic, and Facts

Rational decision making is defined not only by adherence to a careful process, but also by a logical, data-
driven manner of following the steps of that process. The process can be time- consuming and costly. It is
generally not worthwhile on everyday decisions. It is more useful for big decisions with many criteria that
affect many people.
In the evaluation stage, the process usually requires numeric values. The next stage will use these to calculate a
score for each alternative. Some properties are not easily measured, and factors that rely on subjective judgment
may not be trusted. If they are not fully weighted, the final analysis will lean toward whatever is easiest to
measure. In a company, the final decision usually belongs to an executive, who takes the analysis as a guide but
makes his own decision.

Ideas that Complement and Contrast with Rational Decision Making

Though most decision makers will recognize much that is commendable in the rational decision- making
process, there are also reasons to consider complementary or even contrasting ideas. Taken to its extreme, the
rational method might entirely discount factors that are of known and obvious value, such as emotions and
feelings, experience, or even ethical principles. This danger, along with other limitations of the rational method,
has led to the development of the following concepts to provide a more balanced and holistic approach to
decision making:

Prospect Theory
An epoch-making idea in the field of behavioral economics,
prospect theory is a complex analysis of how individuals make
decisions when there is risk involved. Most strictly rational
approaches to questions of financial risk rely on the principle of
expected value, where the probability of an event is multiplied
by the resulting value should the event occur. Notice the
numerical and logical approach to that analysis.

However, Daniel Kahneman and Amos Tversky, the developers

of prospect theory, demonstrated through various experiments
that most people alter that approach based on their subjective
judgments in any given situation. One of the common examples
of this is that many individuals think differently about the risk of
financial loss than they do when considering situations where
different
levels of financial gain are concerned. In a purely rational
approach, the numbers and calculations involved work the same
way regardless of whether the situation is one involving
potential gain or potential loss.

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This graph shows how prospect theory describes individuals’ subjective valuations of profit and
loss. Notice that the value curve is not a straight line and that the positive “gains” section of
the curve isnot symmetrical to the negative “losses” section of the curve.

Prospect theory is a description of how people made actual decisions in experiments. It doesn’t say
whether this is right or wrong. It is in the hands of decision makers to determine whether these tendencies are
justifiable or if they should be overridden by a rational approach.

Bounded Rationality

Another theory that suggests a modification of pure rationality is known as bounded rationality. This concept
revolves on a recognition that human knowledge and capabilities are limited and imperfect. Three specific
limitations are generally enumerated:

 Decision makers do not have access to all possible information relevant to the decision, and the
information they do have is often flawed and imperfect.
 Decision makers have limited analytical and computational abilities. They are not capable of judging
their information and alternatives perfectly. They will inevitably make misjudgments in the
evaluation process.
 Decision makers do not have unlimited time to make decisions. Real-life situations provide time
constraints in which decisions must be made.

In light of these limitations, the theory of bounded rationality suggests that decision makers must be willing to
adapt their rational approach. For example, they must determine how much information is reasonable to pursue
during the information-gathering stage; they cannot reasonably expect to gather and analyze all possible
information.

Similarly, decision makers must content themselves with a consideration of only a certain number of alternative
solutions to the decision.

Also, decision makers being far from perfect in their abilities to evaluate potential solutions must inevitably
affect their approach. They must be aware of the possibility that their analysis is wrong and be willing to accept
evidence to this effect. This especially includes situations in which they’re relying on predictions of an
uncertain future. Uncertainty and inaccuracy often arise in efforts to predict the future. For example, your career
decision is fraught with uncertainty as you don’t know if you will like the work or the work environment. What
are decision makers to do when they are uncertain about potential results from their actions? This makes a
strictly rational approach difficult and less reliable.

Robust Decisions
One final adaptation of the rational process that is becoming more prominent, especially in areas such as energy
production and natural resource preservation, is the practice of making “robust” decisions.

Robust decisions revolve around the inability to predict the future with certainty. Rather than rely on an
imperfect analysis to determine the “best” decision, a robust decision provides a plan that will work in light of
numerous uncertainties. It supposes that a number of situations are all possible and provides a solution pathway
that will be successful if any of those situations should arise.

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This pathway could potentially be a single solution that works in any of the likely future scenarios, or it might
provide separate responses to be enacted depending on how the future uncertainties unfold.

TOPIC 5: Managing Group Decision Making

Advantages of Group Decision Making

Involving multiple participants in the decision-making process provides unmistakable benefits. To begin with,
the sum of the knowledge, skills, creativity, and expertise in a group setting will always be greater than that of
any individual member. If this greater resource base can be properly accessed and harnessed, the result should
be a greater number of more diverse and higher-quality solution ideas. Also, the ability to evaluate those ideas
should be improved by group collaboration.

In addition to this primary and most important advantage, group participation also provides the significant
benefit of increased understanding of the issue and the decision amongst the team members. If an individual
works through the decision-making process alone, arrives at a decision, and communicates that decision to
employees who were not involved in the process, those employees might not understand or appreciate the
nature, importance, or propriety of the decision. When a decision is made as a group, all the members will have
a far greater understanding of the issues and the reasons behind the decision.
Similarly, if group members have a legitimate opportunity to participate in the decision-making process, they
will be far more likely to support the decision. They were a part of the process, had the opportunity to help
shape the decision, and will probably take greater “ownership” of and exhibit more “buy-in” to the decision.

Disadvantages of Group Decision Making

The advantages of group decision making are clear, but there are certainly potential drawbacks to consider as
well.

To begin with, even when the advantages of group decisions are used, there is no way around the process being
slower and more expensive than individual decision making. All the group members must invest their time in
the process, and the group discussion and interaction is more time-consuming than individual decision-making
processes. The number of man-hours involved can be relatively high, and the larger the group, the higher that
number. Further, many group members involved in business meetings report that they find the meetings to be
inefficient and wasteful of time.

If groups lead to wiser, better decisions, however, these higher resource investments will almost certainly be
more than repaid. There are ways, though, in which group involvement can actually become a hindrance to
making good decisions if not managed properly.

Ways to Facilitate Group Decision Making

In light of the potential advantages and potential dangers involved in group decision making, it is important to
have a plan to direct and facilitate the group process so it is carried out effectively. This usually requires one
individual to take some form of leadership within the group, even if only to help organize and direct meetings.
A number of things can be done to pursue smooth and effective group meetings.

Brainstorming is an idea-generating process that specifically encourages all alternatives while withholding any
criticism of those alternatives. Therefore, this technique can help build a group’s cohesiveness because all
members are encouraged to contribute and participate in the process without fear of judgment. In a typical
brainstorming session, a small group of people respond to questions or problems posed by a facilitator. All
responses are recorded and there is no discussion or analysis at this point. After a set amount of time, the group
then selects the ideas or alternatives it would like to explore, but there is no pressure to commit to selecting a
solution during brainstorming.

Brainstorming can indeed generate new ideas, but research consistently shows that individuals working alone
actually generate more ideas than group sessions because of “production blocking.”[1] When people are
generating ideas in a group, many people are talking at once, which distracts the thought process and impedes
the sharing of ideas.

The nominal group technique is similar to brainstorming, in that it encourages all members to contribute their

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ideas. However, it is different from brainstorming in that it limits discussion during the decision-making
process. Group members are all present but members operate independently and use the following four-step
process in idea generating:
Members independently write down ideas on a given problem.
Each member presents one idea to the group. Each member takes a turn, presenting a single idea, until all ideas
have been shared. The group engages in discussion on the ideas for clarity and evaluation.Each member
independently rank-orders the ideas. The idea with the highest aggregate ranking determines the final decision.

A major advantage of the nominal group technique is it alleviates the fear of those people who are concerned
about having their ideas criticized and who do not like to engage in conflict. But because of the highly
structured format, it lacks the flexibility to address more than one idea at a time. Another disadvantage to the
nominal group technique is the amount of time needed to present each idea and the resulting discussion on each
and every idea proposed.
A new variation is e-brainstorming, where people respond to issues via their computers in real time. The
responses and rankings are all anonymous and displayed for everyone to view and to add further comments.
The advantages of e-brainstorming are the possibility of lots of generated ideas, anonymity, honesty, and speed.
The major disadvantage is the reduction in group cohesiveness.

The devil’s advocacy decision-making technique is where an individual or a group is selected to become the
critic in the proposed decision. The biggest strength to using the devil’s advocate technique is the ability to
prevent groupthink.The devil’s advocate technique allows for in- depth dialogue on a range of ideas and can
help bridge seemingly irreconcilable opposites.This process can help the group refine its thinking and produce
high-quality ideas. Any leader using this technique must be aware that it is designed to generate conflict and
will require the leader to actively manage the meetings.
For an in-depth discussion on an issue, a neutral facilitator or referee can be used to separate participant and
leadership roles or groups with opposing ideas. The facilitator manages group processes and dynamics and calls
for a high degree of neutrality about content issues and a focus on group needs. The facilitator is focused on
what needs to be accomplished and appropriate levels of participation, all in an effort to ensure quality
decisions are made. The advantage to a facilitated technique is that it can produce innovative, creative and high-
quality decisions.[4] The facilitated model does require a skilled facilitator and a significant amount of time.

In the Delphi technique (named after the Oracle at Delphi), experts respond to questionnaires in a number of
rounds. Questions narrow in on a specific topic as the rounds progress. The first questionnaire consists of open-
ended questions and aims to identify broad issues related to the issue at hand. The responses are analyzed
qualitatively by sorting, categorizing, and searching for common themes. These responses are then used to
construct the second questionnaire, which is more specific and aims to rate or rank the items in terms of their
significance. Subsequent questionnaires can narrow down responses further. As the facilitator feeds back results
from the previous rounds, there tends to be convergence to a consensus of opinion. The Delphi technique is
useful if convening the participants face-to-face is not practical. The disadvantage is that it takes days to
complete and it requires a large amount of work by the leader.

Within all of these group decision-making techniques, you will need to watch for affective conflict and strive
for healthy cognitive conflict. Affective conflict is when the dialogue becomes “personal” and people become
more aggressive or start to disengage. The mindset moves from “we have a problem” to “you are the problem.”
Opposition is seen as something to be thwarted rather than explored. The goal becomes winning for its own
sake rather than the best possible solution. Cognitive conflict is where people focus on the tasks or issues and
debate and thrash these out and come to a creative solution. The parties might argue and exchange views
vigorously, yet there is two-way communication and an openness to hearing each other. The goal is to find the
best possible solution rather than to win the argument. Alternative perspectives are seen as valuable rather than
threatening.

The Final Decision

One of the basic requirements is to make the decision-making process clear. There are different options, of
course, and different settings and preferences might lead to selecting one of three options: command,
democratic, or consensus. When an organization has a centralized decision-making structure, the “command”
preference will dictate that the leader will make the final decision. Also, it could be that the group will actively
participate in the discussion and thought process, but the final decision will be made by an individual leader.
The democratic method is when all group members are given equal authority in a formal voting system. Even
then, there are choices. A decision might be accepted by a simple majority or unanimity might be required. The
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most favored method currently is through consensus. Each one of the decision-making processes detailed here
is predicated on the involvement of everyone in the group. The consensus process enables the discussion of
current and potential obstacles, already known to participants, resulting in work-arounds to be built into a
decision in advance. Defining that process from the start will help everyone know what to expect.

Strengths and Weaknesses of Group Decision-Making Techniques

Each of these group decision-making techniques has its own strengths and weaknesses. The choice of one
technique will depend on what criteria you want to emphasize and the cost/benefit trade-off. For instance, as
illustrated in the figure that follows, e-brainstorming is good for generating lots of ideas, the nominal group
technique minimizes conflicts, the devil’s advocate generates high quality ideas, and brainstorming builds a
group’s cohesiveness. Remember that group performance varies significantly, no matter which techniques you
use.

It is also essential to manage the process of the group meeting time to make it productive. There must be a
concerted effort to keep the discussion on topic. All group members must also feel free to contribute their
thoughts. Sometimes there are rules in place that prohibit any criticism of ideas during the brainstorming
sessions so all ideas can be voiced without fear of a negative reception.

At some point, however, ideas need to be evaluated together. Finding the right way for that to happen with a good spirit
and environment is important. An effective group leader will find the system that works best for each particular group and
setting. If at any point interpersonal conflict or tension arises, the group leader must be prepared with a plan to diffuse the
situation and bring the group back to productive cooperation

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Name : Subject: Intro To Management And Leadership
Year & Section: Instructor: CHENIE MAY R. SUMANDE

Task/Activity:

Watch one of the following video in a you tube about some of the worst business decisions ever made: For your
reference, here’s a list of the ten business mistakes identified in the video:
 Blockbuster declined to buy Netflix
 Western Union turned down a chance to buy the patent on the telephone
 Publishers turned down Harry Potter
 AOL and Time Warner merger
 Firestone refused to recall faulty tires and lost Ford partnership
 20th Century Fox granted George Lucas rights to Star Wars films and merchandise
 Atari said no to Apple computer
 Kodak sat on first digital camera too long
 NBC vs. Conan and Leno
 RCA diversified too much

Then answer all of the following questions about the decision you chose:

1. What barriers do you think the decision-makers faced? Can you identify any biases that might have
influenced their decision?
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2. What tools or processes do you think the decision-makers could have used to avoid the bad
decision? Be specific about why you think the tools or process would have led them to a different
decision.
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3. Put yourself in the decision-maker’s shoes. Do you think you would have made the same mistake?
Why or why not?
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__________________________________________________________________________________________
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 LESSON 5
GROUP, TEAMS AND TEAMWORK
TOPICS
Common Group Behaviors
Types of Teams
Building effective Team
Five Stages of team development
Conflict with teams

LEARNING OUTCOMES
At the end of the lesson, you should be able to:
Describe the advantages and disadvantages of teams.
Differentiate between task forces and cross-functional teams.
Summarize common technique for team building.
Describe the five stages of team development.
Describe common types and causes of conflict that arise within teams.

TOPIC 1: Common Group Behavior

Why does a manager need to understand groups, teams, and teamwork?

Lisa is a project manager with IT Solutions, and she was recently

given an assignment to deliver a new customer relationship
management database for the organization’s largest client. When
Lisa met with her boss, she received information about the
members of her team. Here are the notes she took on each
person’s background:
 Paul – Ten years of experience with various types
of projects; expertise in budgets and scheduling.
 Susan – Five years of experience as a programmer;
limited exposure to this type of project.
 Tim – Seven years of experience; excellent
problem-solving skills.
 Dan – Two years of experience; no exposure to this
type of project.
 Wendy – Eight years of experience; strong programming and project management experience;
significant exposure to these types of projects.

As Lisa reviews the specifics of the project, she realizes she has a lot to accomplish, and the deadlines are really
tight. As mentioned earlier, this is IT Solutions’ largest client, so it is vital that the team be successful. To do
this, its members will need to function well together—and work quickly.

Unfortunately, this is a team that is being brought together specifically for this project. Lisa has worked with
Susan and Tim briefly on a couple of earlier projects. Tim has worked with Dan in the past, but otherwise, this
is a brand new team.

How would you start building a team from this group of individuals? What problems do you think you might
have along the way, and how will you deal with them? Managers need to understand the nature of teams and
how to build them effectively.
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Introduction

Moneyball is a popular movie about the Oakland Athletics baseball team during the 2002 season. The film
shows how the team’s general manager, Billy Beane (played by Brad Pitt), and the assistant general manager,
Peter Brand (Jonah Hill), defy conventional wisdom that says they should look for standout stars for the team.
Instead, they use statistics to select players based on their overall performance and how well their skills will fit
into the team. They bet that a well-functioning team could be better than the sum of its parts. The Oakland A’s
did not win the pennant in 2002, but they did win a record twenty straight games.

The movie is really more about the A’s management team than it is the players. It shows how Beane puts his
trust in Brand to choose players for the team, and how they overcome resistance to their ideas and methods
from scouts, the manager, and the owner. They eventually are able to put together a high-performing team of
managers and players. It is an excellent portrayal of how teams go from initial formation, through resistance and
conflict, into high performance. They did not achieve the ultimate goal of winning a World Series pennant, but
they did change the way teams evaluate baseball players throughout professional. As you study how teams work
in this module, keep this example in mind and consider what it reveals about the team formation process.

What Is a Team?

A team is a unit of two or more people who regularly interact to accomplish common goals and who hold
themselves mutually accountable for meeting performance results. There are several important elements to this
definition.

 It involves two or more people who interact regularly.

 People on the team share a goal and are committed to achieving the goal.

The people on the team hold each other mutually accountable for the performance of the team. Note that a
group of people, such as people waiting for a train, is not a team. Even though they might have a common goal
—to get on the train—they do not interact regularly, and they are not accountable to each other for reaching the
goal. A team implies a commitment to a shared objective and collective responsibility for achieving it.

Common Team Behaviors

There is a fundamental dilemma in working in teams: each individual contributes, but the result is attributed to
the team. If the team is successful, individual contributions may not be recognized, regardless of how hard the
individual worked. On the other hand, if the team fails, it is likely that the leader or other important members of
the team will receive the blame. This leads to some behaviors that can either help or hurt a team effort.
Although some of these behaviors are characteristic of groups in general, they all apply to teams in the business
environment.

Social cohesion is defined as the willingness of members of a society to cooperate with each other to survive
and prosper. In work teams, social cohesiveness means the members want to be part of the team and want to
contribute to its success. Members of cohesive teams have social and emotional bonds to each other and to the
overall team, which motivates higher commitment and performance. Southwest Airlines, for instance, works
hard to develop

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cohesiveness in its organization. As a result, everyone is willing to work toward the success of the
organization. That is why it is not unusual to see people pitch in, even when it is not part of their job. For
example, pilots may help to load luggage if it helps maintain on-time performance. The main influential factors
of cohesion are size of the group, similarities among its members, and team success. Small groups tend to be
more cohesive than larger ones because people can interact with each other more. Similarity among group
members contributes to team cohesiveness because people with similar backgrounds are more likely to have
fewer communication barriers and share views on what constitutes appropriate behaviors. People are generally
more trusting of others when they share some important background experiences. In substance abuse recovery
groups, for example, members know that everyone has had the same ailment and is dealing with similar
experiences. When a team experiences success early in its development, members get reinforcement that their
efforts can produce results. They are more likely to be motivated to continue to contribute. Success also creates
a sense of pride that fosters feelings of belonging and mutual attraction in the team.

Social loafing is when one or more group members fail to do their fair share of work within the group. You
may have witnessed this behavior firsthand on a team or school project. One group member finds an excuse for
not doing his or her job. There are two main consequences of social loafing. The free-rider effect is when one or
more team members do not put in their share of the work, assuming others will cover their shortfall. The other
is the sucker effect, where other team members reduce their effort in response to the free rider’s behavior.
Several causes exist for social loafing. A member may not be motivated by a goal and may not want to work to
achieve it. Or a member may feel that his or her contribution to the team will not be recognized, so the
member is not motivated to contribute. Both of these causes are more pronounced in large teams. Social
loafing is also more likely when there isn’t an individual evaluations system where the performance and
contributions of members are regularly reviewed. Finally, if there is unequal compensation and the members of
the team feel the compensation is unfair, they will be more likely to lessen their effort.

A good manager should monitor employees to watch out for these social loafers or “slackers.” The manager is
responsible for making sure all team members are carrying their fair share of the work they have been assigned.
If the manager doesn’t deal with social loafing, it can create a stressful work environment that may turn into
conflicts among co-workers.

Collective efficacy is the team’s belief that it is capable of organizing and working together to reach its goals.
Creating collective efficacy is a bit of a balancing act. If goals are perceived as being too easy to reach,
members may not feel they have to put in their full effort. On the other hand, if goals are perceived to be too
difficult, members may feel their effort doesn’t matter because the goal cannot be reached regardless of how
hard they work. In either case, social loafing may result. But when the goal is “just right,” difficult but not
impossible, the team will believe it can reach it only if it works hard together.

Psychologist Albert Bandura researched the relationship between efficacy and job performance and found that
each affects the other. When a team achieves some success, it can build self- confidence and the belief that it
can achieve more. The resulting collective efficacy, in turn, makes it more likely that the team will be
successful. But a downward spiral can occur when both performance and collective efficacy are low. Poor
performance makes team members question ability, and the decrease in collective efficacy leads to more poor
performance.

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The relationship between success and collective efficacy is affected by self-confidence and performance.

Good planning and good leadership can both improve collective efficacy. When the tasks needed to reach the
team’s goals are being planned, initial activities should lead to demonstrable team achievements. When teams
experience successes early in their development, they are more likely to build collective efficacy. Good
leadership provides a clear vision for the team and articulates why the goals are important. The leader provides
guidance, feedback, and encouragement. When timely feedback is given to teams, they are more likely to
understand the relationship between their effort and their performance.

Business organizations have both groups and teams. A group is formed around a common interest or purpose
with the goal of sharing information, but there is no collective accountability. Work groups may consist of
social clubs or volunteer efforts. A team’s focus is collective performance, with both individual and mutual
accountability. For example, all of the people who work in accounting constitute a group, but people from each
functional department who meet regularly to standardize financial procedures are a team. Before we look more
closely at what constitutes an effective (high-performing) team, we will review the advantages and
disadvantages of using teams in the workplace.

TOPIC 2: Types of Teams

Advantages of Teams in the Workplace

Teams bring together people with diverse skills and make something that nobody could do alone. A well-
planned team improves motivation. Communication is higher on teams, and the diverse skill set means teams
can discover new approaches. Because teams have specific shared goals, team members usually enjoy greater
autonomy, variety, task identity, task significance, and feedback. Teams often enjoy the social support for
difficult tasks, improving morale and motivation.

Another benefit of teams is to improve product and service quality. Each Whole Foods grocery store operates
with an average of ten “self-managed” teams, including produce, prepared foods, groceries, etc. Each store also
has a team made up of just the team leaders from each team to facilitate communication and sharing. Each team
takes responsibility for the quality of the products and service in its area.

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Efficiency in product development is another advantage to building teams within the traditional hierarchy.
Teams can analyze and identify dependent tasks in a nonlinear process, sometimes realizing startling
improvements.

Employees also benefit from participating on teams. They develop relationships to people from other areas of
the business and learn more about what is happening across functional department lines (cross training). A
2009 study by CG and WHU-Otto Beisheim School of Management of eighty global software development
teams showed that members of effective teams are more motivated and report greater job satisfaction, which
leads to fewer employees quitting.

Disadvantages of Teams

Not all teams are wildly successful. When companies do not make adequate efforts to create, build, and support
strong teams, employees may initially become discouraged and leave the firm. You read in the first section
about some of the behavioral problems related to teams, including social loafing. Another phenomenon that can
happen in groups is groupthink. We’ll discuss this in more detail in the next section, but it involves the
reluctance to speak out against the majority opinion in fear of upsetting other members and disrupting social
cohesion. When a few people begin to speak for the whole team, individual members may not feel as
responsible for the team’s success.

Teams are also ineffective when they lack leadership, when the decision making is not democratic, and when
the team lacks expertise and necessary skills. Eventually, team members don’t feel accountable, and the team
fails. Finally, some teams fail because the members are not adequately prepared or supported. Teams can’t
perform well if they have no clear purpose, are not given autonomy, and don’t have the resources required.

Some individuals are not compatible with teamwork. Workers must be selected to fit the team as well as
requisite job skills. Conflict will develop between team members, so leaders must be able to step in. And teams
can be time-consuming due to the need for coordination and consensus.

Types of Teams

A cross-functional team is just what it sounds like—a team that pulls its members from across the different
functional areas of an organization. For example, cross-functional teams may be composed of representatives
from production, sales, marketing, finance, and legal. The strength of this type of team lies in its members
having different functional backgrounds, education, and experience. The diversity of experience aids innovative
problem solving and decision making.

Unfortunately, the very factors that give cross-functional teams strength can also lead to weaknesses. Without a
strong leader and very specific goals, it may be hard to foster social cohesion in cross-functional teams and to
create a system of accountability. A cross-functional team might be brought together to review and make
recommendations on potential acquisitions or mergers.

A task force is a group or committee, usually of experts or specialists, formed for analyzing, investigating, or
solving a specific problem. Quite often, a task force is formed in reaction to a problem or specific event, and
once the job is done, the task force is disbanded. The goal of a task force is to offer solutions, support, and, if
possible, create preventive measures for issues. Types of concerns that may generate task forces in the
workplace include bullying, health and

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wellness, employee training, increasing customer sales, or improving employee job satisfaction. A project
team is similar to a task force, but a project team is often ongoing and covers a wider range of tasks.

Virtual teams are groups of individuals working together with a common purpose but from different locations.
People may be in different time zones or even different organizations. The obvious advantage of a virtual team
is the low cost, both in time and money to maintain it. Meeting in virtual time increases flexibility for the
members (no need to get dressed before the meeting!) and allows the organization to use the talent of people
from around the globe. The idea of virtual teams is relatively new. However, according to the IQVIS
management consulting firm, virtual teams have grown 80 percent in business use from 2005 to 2015. Virtual
teams are possible thanks to advances in communications and technology, such as e-mail, the World Wide Web
(Internet), videoconferencing, and other products.

Working across cultures can be as challenging as working cross-functionally. Working with different cultures
means working with very different leadership styles and decision-making processes. In the United States,
managers tend to gather data, make a quick decision, and move forward, making corrections as need. Northern
Europeans prefer to slowly build consensus, whereas French schoolchildren are trained to debate and confront.
Some business consultants will tell you that decisions in Japan are made in small, informal conversations before
the formal meeting ever takes place.

In spite of these barriers, many companies have been adapting virtual teams. SAP is the world’s largest inter-
enterprise software company with more than thirty thousand employees in sixty countries. It relies on virtual
teams to survive. It has five headquarters around the globe, each one with a specific area of expertise shared via
virtual meetings. IBM and General Electric are corporations that also depend on virtual team strategies.

Self-Managing Teams

A self-managed team is a group of employees that’s responsible and accountable for all or most aspects of
producing a product or delivering a service. It could be thought of as a mini-company within a larger
organization. Traditional organizations assign tasks to employees depending on their skills or the functional
department (sales, finance, production). A self-managed team carries out the supporting tasks as well, such as
planning and scheduling the technical workflow tasks, and human resource tasks such as managing vacations
and absences. Team members may take turns leading and assuming technical responsibilities.

Because of the autonomy given to self-managed teams, these teams have greater ownership of the jobs they
perform. Some benefits of self-managed teams are: team members share accountability for what they
accomplish, which can be a great motivator; individuals have greater commitment to the task because they’re
directly responsible for its results; and they take on some of a manager’s work so he can continue on other
tasks.

However, self-managed teams are not without problems. Groupthink occurs more frequently with these teams.
Members may struggle during the transition from supervisor-led management to self-management, possibly
because of lack of interpersonal skills or poor implementation by the company. Not surprisingly, the most
effective self-managing teams are found in companies where the corporate culture supports democratic decision
making and the employees are generally well-educated.

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 TOPIC 3: Building Effective Team

Common Techniques for Team Building

Once you know the characteristics of effective teams, how do you go about building those qualities into a
group? When initially forming the team, follow these procedures and techniques to help create the
environment needed for the development of those characteristics.

 Set team goals and priorities. This step supports the key characteristic of clear goals. Team
members need detailed explanations of how their individual actions contribute to the achievement of the team
goals. Team priorities should be established so that members can understand when and where to provide
additional help if needed. Individuals need to understand how their personal SMART goals support the team
goals and how supporting the team also allows them to meet their own personal goals. If personal goals and
team goals are not interdependent (for example, if a team goal is not specifically tied to a personal goal), then
the employee most likely will focus on her own needs to the detriment of the team. Good communication skills
are required to make sure that the goals are written clearly and that team members know their performances will
affect the team goal and thus each other’s performance.

 Select team members carefully. Three factors should be considered when selecting people for a
team: individualism, the average level of experience and ability, and the degree of diversity.
o It’s a fact that some people make better team members than others. It’s also a fact that with
determination, anyone can learn to function on a team. Individualists generally put their
personal welfare and interests first, and they prefer independent tasks in which they work alone. On the
opposite end of the spectrum is the collectivist, who prefers cooperation to competition and is happiest working
in a group. Although collectivists generally make better team members, there are many instances when
independent tasks are part of a larger team effort. It may take more effort to communicate with the
individualists, however.
o The experience and ability levels of team members should be balanced so tasks can be
distributed with high expectations of the work being done. At the same time, newer employees need to become
a fully functioning part of the workforce, and this can happen by teaming them with the more experienced
people. It is also important to select people based on their skills and leadership potential.
o Team diversity represents not only the mix of skills and experiences, but also how people of
varying culture, ethnicity, race or gender work together. Diversity is a good defense against groupthink because
of a different outlook and belief system that challenges common assumptions.

Optimal Team Size

There seems to be no question about the right size of many teams. Basketball teams have five players (on the
court), football is played with eleven members on the field, and a bridge team is made up of only two players.
Businesses don’t have rules for the proper size of a team. Jeff Bezos, CEO and founder of Amazon, has his own
rule for the right-sized teams: the team should only be as big as can be fed with two pizzas. By normal
standards, that would suggest five to eight people on a team. Bezos is said to have followed this guide when he
created the innovative and decentralized start-up that has grown into one of the most successful companies in
the country.

The ideal size, according to most management experts, falls within the range of five to nine people. The reason
the size is so important that it is the focus of research studies has to do with processes and outcomes. Too few
people and the team may not have enough resources or skills. Too many people and communication becomes
more challenging. Groupthink and social loafing may occur and negatively affect team performance.

In one study, it was determined that teams with more than twelve people had greater conflict and formed
subgroups that disrupted the team cohesiveness.

Experts also agree that the optimal size of the team is driven by other factors: what type of task the team will
perform, what skills the team requires to complete the task, and the time provided to complete the task.
Answers to those questions will often determine the best size for a team. If the task, for example, is a sales
function, then one individual may do most of the work until the very end, when a finance and delivery/inventory
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manager gets involved. One business may be fortunate to have four employees with multiple skill sets whereas
another company would have to include six or seven people to reach the same level of abilities. Finally, the
shorter the timeframe to complete the task, the fewer the people should be on the team. Larger numbers increase
complexity of communication and administration.

TOPIC 4: Five Stages of Team Development

Stages of Team Development

This process of learning to work together effectively is known

as team development. Research has shown that teams go
through definitive stages during development. Bruce Tuckman,
an educational psychologist, identified a five-stage
development process that most teams follow to become high
performing. He called the stages: forming, storming, norming,
performing, and adjourning. Team progress through the stages
is shown in the following diagram.

Forming stage

The forming stage involves a period of orientation and getting

acquainted. Uncertainty is high during this stage, and people are looking for leadership and authority. A
member who asserts authority or is knowledgeable may be looked to take control. Team members are asking
such questions as “What does the team offer me?” “What is expected of me?” “Will I fit in?” Most interactions
are social as members get to know each other.

Storming stage

The storming stage is the most difficult and critical stage to pass through. It is a period marked by conflict and
competition as individual personalities emerge. Team performance may actually decrease in this stage because
energy is put into unproductive activities. Members may disagree on team goals, and subgroups and cliques
may form around strong personalities or areas of agreement. To get through this stage, members must work to
overcome obstacles, to accept individual differences, and to work through conflicting ideas on team tasks and
goals. Teams can get bogged down in this stage. Failure to address conflicts may result in long-term problems.

Norming stage

If teams get through the storming stage, conflict is resolved and some degree of unity emerges. In the norming
stage, consensus develops around who the leader or leaders are, and individual member’s roles. Interpersonal
differences begin to be resolved, and a sense of cohesion and unity emerges. Team performance increases
during this stage as members learn to cooperate and begin to focus on team goals. However, the harmony is
precarious, and if disagreements re-emerge the team can slide back into storming.

Performing stage

In the performing stage, consensus and cooperation have been well-established and the team is mature,
organized, and well-functioning. There is a clear and stable structure, and members are committed to the team’s
mission. Problems and conflicts still emerge, but they are dealt with constructively. (We will discuss the role of
conflict and conflict resolution in the next section). The team is focused on problem solving and meeting team
goals.

Adjourning stage

In the adjourning stage, most of the team’s goals have been accomplished. The emphasis is on wrapping up
final tasks and documenting the effort and results. As the work load is diminished, individual members may be
reassigned to other teams, and the team disbands. There may be regret as the team ends, so a ceremonial
acknowledgement of the work and success of the team can be helpful. If the team is a standing committee
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with ongoing responsibility, members may be replaced by new people and the team can go back to a forming or
storming stage and repeat the development process.

TOPIC 5: Conflict Within teams

Common Types of Team Conflict

Conflict is a common occurrence on teams. Conflict

itself can be defined as antagonistic interactions in which
one party tries to block the actions or decisions of
another party. Bringing conflicts out into the open where
they can be resolved is an important part of the team
leader’s or manager’s job.

There are two basic types of team conflict: substantive

(sometimes called task) and emotional (or relationship).

Substantive conflicts arise over things such

as goals, tasks, and the allocation of
resources. When deciding how to track a
project, for example, a software engineer
may want to use a certain software program
for its user interface and customization
capabilities. The project manager may want
to use a different program because it
produces more detailed reports. Conflict will arise if neither party is willing to give way or
compromise on his position.

Emotional conflicts arise from things such as jealousy, insecurity, annoyance, envy, or personality
conflicts. It is emotional conflict when two people always seem to find themselves holding opposing
viewpoints and have a hard time hiding their personal animosity. Different working styles are also a
common cause of emotional conflicts. Julia needs peace and quiet to concentrate, but her office mate
swears that playing music stimulates his creativity.

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Conflict Can Be Beneficial

Not all conflict is negative. Just as some forms of stress can be beneficial, so can some types of conflict.
Eustress is a positive reaction to stress that generates a desire to achieve and overcome challenges. For
instance, some people find that they produce their best work when a deadline is looming and the pressure to
produce gets the adrenaline flowing. Team conflicts can also produce positive results when the conflict centers
on substantive issues. Conflict can spark new ideas and generate creativity.

On the other hand, when people feel they cannot disagree or offer different opinions, new ideas cannot emerge.
Groupthink is the mindset that develops when people put too much value on team consensus and harmony. It
is common when individuals are afraid to go against what most group members—especially dominant members
—think. Some degree of conflict helps teams avoid groupthink and forces the group to make choices based on
rational decision making.

If there is too much cooperation, the best ideas may never get shared and team effectiveness is sacrificed for the
sake of efficiency. For the same reasons that diversity bestows benefits on a workforce, a mix of ideas and
opinions improves team performance and decision making. If there is too much conflict, however, then nothing
can get done. Employees on the team become less satisfied and motivated and may turn to social loafing or
may even work against other members out of sheer frustration.

Common Causes of Conflict

Some common causes of negative conflict in teams are identified as follows:

Conflict often arises when team members focus on personal (emotional) issues rather than work
(substantive) issues. Enrico is attending night school to get his degree, but he comes to work late and
spends time doing research instead of focusing on the job. The other team members have to pick up his
slack. They can confront Enrico and demand his full participation, they can ignore him while tensions
continue to grow, or they can complain to the manager. All the options will lower team performance.
Competition over resources, such as information, money, supplies or access to technology, can also
cause conflict. Maria is supposed to have use of the laboratory in the afternoons, but Jason regularly
overstays his allotted time, and Maria’s work suffers. Maria might try to “get even” by denying Jason
something he needs, such as information, or by complaining to other team members.
Communication breakdowns cause conflict—and misunderstandings are exacerbated in virtual teams
and teams with cross-cultural members. The project manager should be precise in his expectations from
all team members and be easily accessible. When members work independently, it is critical that they
understand how their contributions affect the big picture in order to stay motivated. Carl couldn’t
understand why Latisha was angry with him when he was late with his reports—he didn’t report to her.
He didn’t realize that she needed his data to complete her assignments. She eventually quit, and the
team lost a good worker.
Team morale can be low because of external work conditions such as rumors of downsizing or fears
that the competition is beating them to market. A manager needs to understand what external conditions
are influencing team performance.

Common Approaches to Conflict Resolution

There are five common approaches, or styles, to handling negative conflict. Each of the approaches combines
some degree of cooperation and assertiveness. Each of them is more likely to be effective in certain cases and
not in others. A manager has the responsibility to make sure that the conflict resolution process—whichever
approach is followed—is executed impartially and with respect for all the parties involved. Finally, experts
agree that it is better to address conflict sooner rather than later to prevent escalation that would affect team
performance. The five approaches are described in the following text. An easy way to remember these
approaches are as “no way, my way, halfway, your way, and our way.”

Avoiding (no way)

Rarely, but occasionally, the best approach to conflict is to ignore it. When the reason for the conflict is trivial
(as when someone was inadvertently left off an e-mail) or when waiting for more information would help
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resolve the conflict, the avoidance approach is appropriate. The manager may also want to avoid the conflict if
she wants team members to handle it informally, on their own—and if the conflict does not significantly
interfere with team performance. A manager may also decide to avoid an issue if there could be no possible
resolution to addressing the conflict (a “lose-lose” situation). Consider the case of a well-liked foreman in the
inventory department of a major retailing firm with fewer than three months until his retirement. He had been
leaving early and generally not meeting his responsibilities. His direct reports made excuses and covered for
him. The manager felt conflicted because the foreman was setting a bad example, but she decided that team
morale would suffer if the foreman were disciplined. It was a “no-win” scenario.

Dominating (my way)

The dominating style (“my way or the highway”) may actually be an appropriate response in emergency
situations or when quick, decisive action is needed. It may also be the only effective approach for unpopular
decisions or when individual team members are personally affected. Again, imagine that a popular and senior
team member has been making disparaging and offensive remarks about another individual on the team. The
target is not the type to complain, but you have heard that he is unhappy and thinking about leaving the team.
You may be tempted to get them together to hash out the problems, but a better approach might be to tell the
senior team member that his behavior is affecting team performance, that you are relying on him to behave
more professionally, and that you will be monitoring the situation.

Compromising (halfway)

Compromising can be an effective approach

when the arguments on both sides are equally rationale.

when the participants are fairly equal in status.
when both sides are willing to give something up.
when time or expediency is a factor.

Accommodating (your way)

Accommodating a team member may be an effective strategy for resolving conflict when you agree that the
team member is, in fact, right. It can also be a good approach if you don’t feel strongly about the result, if you
want to gain goodwill from the team member, or if it is more important at that particular time to keep the whole
team functioning and cooperating.

Collaborating (our way)

The collaborative approach is also known as the win-win approach. It is mostly used in high- stakes conflicts
when getting a resolution is too important for the issues not to be carefully examined. It requires a great deal of
skill to use the collaborative approach successfully. Negotiation and mediation are types of collaboration,
usually in formal situations such as labor negotiations or creating employment contracts for senior level
management. Negotiation and mediation are most effective when both parties have something to gain and
something to lose, and when there is great amount of interdependence.

Forming

Lisa brings everyone together for a face-to-face meeting on day one of the project. She knows that during this
first stage of team development, everyone is getting to know each other. To facilitate this process, she opens
the meeting with some icebreakers and a “getting to know you” time. As expected, they all try to find their
particular place on the team given the skills and experiences of the others. As time passes, Lisa can see that
they are starting to open up and share more about themselves. They are successfully transitioning to stage two.

Storming

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Lisa has anxiously awaited this moment. From her study of management and team dynamics, she understands
that the storming phase is critical to manage. She begins to see signs of friction between team members. Wendy
and Paul begin to jockey for position because both have strong project management backgrounds. Additionally,
Dan begins to feel like the team is ignoring his opinions given that he has the least amount of experience.

It is important that Lisa exert influence at this crucial time in the team’s formation. She patiently waits for a
little while to see if things resolve, but she acts when they don’t. She pulls everyone back together and reminds
them of the project’s importance and each person’s agreed upon scope of responsibility. She also establishes a
process for dealing with any differences of opinion going forward.

By stepping in and giving firm guidance, Lisa is able to bring the team together under her leadership. As
a result, she begins to gain confidence in the outcome of the project.

Norming

The project is moving along now, and the team is working together very well. The disputes that arose in stage
two are a thing of the past, and the team is becoming a cohesive unit. Each team member is sharing his or her
knowledge, which serves to both bind the team and develop it. On a personal level, the team members are
becoming good friends. They are socializing outside of work and truly enjoy one another’s company. Lisa is
excited because she knows what’s coming next!

Performing

As the deadline nears, the team is performing at an amazingly high level. The work is being completed ahead of
schedule and exceeds the requirements the customer established. Paul told Lisa that in all his years of
experience, he has never had so much fun while working so hard. Lisa’s boss is happy because all of this is
being done well under budget, so IT Solutions is going to have a good year financially as a result.

Adjourning

Now that the project is over, Lisa gets everyone together again so that they can celebrate the win and say proper
good-byes. Because the project was so successful, each member of the team has already been given their choice
of next assignments in the organization. Similarly, Lisa has been identified as a rising star, and the executive
team has big plans for her. They all exchange contact information and make plans to stay in touch as they move
their separate ways. This has been an amazing experience for them all.

Learning to lead a team is important no matter what functional area of business you enter. A key role of
management is to deliver results through others—and the strategies you have learned in this module will serve
you well throughout your career.

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Name : Subject: Intro To Management And Leadership
Year & Section: Instructor: CHENIE MAY R. SUMANDE

Task/Activity: Answer the following questions:

1. Describe what made the team effective. Did your team have some or all of the key characteristics
of effective teams covered in your reading? Provide examples.
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2. How did the team set goals and choose its members? Do you think the team’s success

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3. Depended on these processes? Why or why not?

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4. Describe a time when conflict arose within the team. What was the cause of the conflict, and how was
it resolved?

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 LESSON 6 CULTURE AND DIVERSITY

TOPICS
What is Organization Culture
Key Dimensions of Organization Culture
Influences on Organization Culture
Initiating and Fostering Cultural Change
Employee Diversity

LEARNING OUTCOMES
At the end of the lesson, you should be able to:
Define culture for a business.
Explain how culture can be a competitive advantage for a business.
Discuss seven dimensions of culture in the organizational culture profile.
Discuss the sources in an organization.
Explain the concepts of diversity within the organization.

TOPIC 1: What is Organization Culture

Organizational culture is a term that can relate to any organization at all, from a church to a
university. When talking about the culture of a business, you’ll often hear the term “corporate culture.”
Corporate culture is, according to INC Magazine:

the shared values, attitudes, standards, and beliefs that characterize members of an organization and define its
nature. Corporate culture is rooted in an organization’s goals, strategies, structure, and approaches to labor,
customers, investors, and the greater community. As such, it is an essential component in any business’s
ultimate success or failure.

Like families (or nations), corporations have cultures. Sometimes those cultures “just happen.” All too often,
when corporate culture is not intentionally created, the culture winds up being disjointed or even antagonistic.
Employees are all working toward different goals, in different ways, with different approaches. For instance,
although Bob is dedicated to the idea of crafting quality products, Suzanne is eager to sell as much product as
possible (even if the quality is only so-so). Meanwhile, Brad thinks the company should start making a wider
range of products and is trying to push his ideas forward during sales meetings.

The idea of corporate culture developed from our knowledge of national, regional, and family cultures, and
many theories exist about what makes a good (or poor) corporate culture. To get an idea of what a corporate
culture looks like, think about families you know well. Some are formal whereas others are easygoing. Some
work together toward shared goals whereas others encourage individuality and independence. Some are always
having fun whereas others seem to be in a permanent state of internal conflict. We can describe corporate
cultures in similar ways.

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Although some businesses give little thought to corporate culture, many successful companies have cultures that
are intentionally created or tweaked. Sometimes corporate cultures are the result of a founder’s personal vision.
But just as often, corporate cultures are created through a collaborative effort that involves not only upper
management but also managers and employees.

Corporate Culture as a Competitive Advantage

Why is it so important to have a strong, positive corporate culture? There are three good reasons:

 A strong culture helps employees, customers, and the general public to identify your corporate
values. Say, for example, that your company culture values innovation. In that case, your employees will know
that they will be encouraged to come up with new ideas—and your customers will know that your products and
services are likely to have a creative or unique quality.
 Companies with strong, coherent cultures attract high-quality employees who believe in the same
values as the corporation. Once those employees come on board, they start to feel that they “belong” because
they are part of a shared culture. Employees who feel that their jobs are a great match for their personal values
are more likely to be loyal to their employers. After all, they are doing what they enjoy doing for an
organization that shares their ideals and goals.
 A strong corporate culture can help a corporation to build its brand. For example, Starbucks has
built a culture and brand that includes very public dedication to international fair trade. Customers who care
about fair trade are more likely to buy from—and stay loyal to—Starbucks.

Levels of Corporate Culture

E.H. Schein’s model of corporate culture includes

artifacts, values, and assumptions

E.H. Schein is a theorist who studies corporate culture. In

1992, he wrote a book titled Organizational
Culture and Leadership, which suggests that there are three
levels of corporate
culture. At the core of a culture are basic assumptions about
human behavior, which are usually so ingrained into the
culture that they’re difficult to pinpoint. Surrounding the assumptions are expressed values drawn from those
assumptions. These usually appear in the form of standards, rules, and public expressions of the
organization’s philosophy. At the surface level are artifacts that are the outcome of the assumptions and
values—these appear as actions, policies, the physical environment, office jokes, and so on.

For example, when Home Depot, under the leadership of a new CEO, needed to return the company to its
customer-centric roots in 2007, it quickly introduced artifacts—buttons and awards—to remind everyone who
came first: customers. Sales associates began wearing buttons that invited customers to ask for help. Associates
were rewarded for outstanding customer reviews and recognized in meetings with sales plaques and more
buttons. With a renewed focus on its stated value of providing excellent customer service, Home Depot began
hiring people who loved serving customers instead of worrying about costs and profits. Management did not
completely abandon the cost discipline of its previous CEO, but it loosened the reins substantially. The
underlying assumption was that profits would return if the company took care of customers. Profits did return,
although the competition from Lowe’s has been stiff.

There is no right or wrong set of assumptions and values, and companies can be successful no matter which
values they embrace. You are, however, most likely to do well with a company that shares your beliefs. Just
looking around a workplace can help you to determine whether a company values hierarchy or shared authority,
individual achievement or teamwork.

TOPIC 2: Key Dimensions of Organizational Culture

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Understanding a set of values that might be used to describe an organization’s culture helps us identify,
measure, and manage that culture more effectively. One framework that provides insight into the different types
of organizational culture is the seven-dimension Organizational Culture Profile (OCP). The OCP is an
instrument initially developed by consultants Charles A.
O’Reilly III, Jennifer Chatman, and David F. Caldwell to assess person-organization fit. In theory, employees
should have the same basic cultural assumptions and values as the company for which they work.

According to the OCP, every corporation can be described as one of the following:

A. Detail-oriented

Not surprisingly, detail-oriented companies are all about meticulous attention to details. These companies tend
to be in customer-oriented industries in which such precision is valued. For example, Four Seasons hotels are
dedicated to providing customers with exactly the service they prefer, and they keep records on each guest’s
experiences, preferences, and expectations. Employees working for Four Seasons must have an eye for detail
and thrive on keeping meticulous records.

B. Innovative

Individuals who want opportunities to invent new products or services should consider working for companies
such as W.L. Gore and Associates, maker of GORE-TEX, or 3M. These companies not only encourage
innovation but give employees company time to work on their own projects. This approach can result in a wide
range of exciting new products developed by engineers or scientists working on their own.

C. Aggressive

Although some companies value cooperation, others value aggressive competition. Stratasys, a maker of 3D
printers, has been willing to make enemies in order to survive and thrive. Stratasys expanded rapidly through
growth, takeovers, and mergers to gain a dominant position in the 3D printer industry. Sometimes, Stratasys’
aggressive approach has gotten the company into legal battles—but the company has continued to perform well.

D. Outcome-oriented

Outcome-oriented businesses are all about results. At RE/MAX, for example, employees are trained to sell
products, and they are evaluated on their sales performance. RE/MAX, short for “Real Estate Maximums,” is an
American international real estate company that operates through a franchise system. The company has held the
number-one market share in the United States and Canada since 1999.

E. Stable

Employees at a stable corporation know exactly who is in charge, who to report to, and what they are expected
to accomplish. Kraft Foods, for example, is a very stable organization with a strong bureaucracy. Although it is
consistent, however, Kraft is not known for innovation or creativity.

F. People-oriented

If you work for a people-oriented corporation, you can expect the company to care about you. They value
fairness and are supportive of individuals’ rights and dignity. Software company SAS is a good example of a
people-oriented company that offers employees a wide range of individualized benefits, including on-site
childcare. CEO Jim Goodnight’s philosophy is, “Treat employees like they make a difference, and they will.”
The result: a loyal and dedicated workforce.

G. Team-oriented

Employees who like to collaborate and cooperate with team members do well in team-oriented companies.
Whole Foods, for example, expects its employees to function as members of teams—and to support other

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members of the team when necessary. This creates strong, solid relationships within working groups.

There is no one “best” type of corporate culture, and many larger corporations actually exhibit more than one
culture. For example, the sales department may have an aggressive culture, whereas marketing is more team-
oriented. In general, however, corporations can be grouped into the categories mentioned earlier.

TOPIC 3: Influences on Organizational Culture

No matter where you work, you will experience organizational culture. Employees can usually tell from the get-
go if their place of employment is serious or fun, people-oriented or results- oriented. But how did the culture
get started? How do employees get to know about the corporate culture and help to keep it in place?

Sources of Culture in an Organization Founders

When a company is founded, there is usually a single individual or group of individuals involved. The founder
or founders have a vision for their new company—and that vision helps to form the corporate culture. In some
cases, the founder is very intentional about creating a particular culture; he or she may actually want to create a
business in which, for example, innovation or teamwork is valued. in other cases, the founder’s personality
unintentionally forms the culture.

Some individual founders have such strong personalities and values that the company continues to reflect their
goals even as it grows—and even after the founder dies. Walt Disney, for example, modeled leadership,
teamwork, and innovation so that, even today, the Disney Corporation is built around the values and
assumptions of its founder.

Another good example of the way that founders’ values create corporate culture is Ben and Jerry’s Ice Cream.
Founders Ben Cohen and Jerry Greenfield started out to create a company with strong social values—and they
succeeded. The company started in 1978, but even today the company continues to focus on sustainability,
environmental activism, social activism, and charity.

Industry

It’s one thing to be creative, innovative, and fun in the hospitality or entertainment business. But that type of
culture won’t work well in an industry that’s built around regulations and policies that cannot be changed or
bent. Industries such as pharmaceuticals and nuclear power require attention to detail and cannot tolerate a
“creative” approach to following rules. True, a pharmaceutical company can be people-oriented to a degree, but
its willingness to support the individual needs of employees must be secondary to its absolute compliance with
regulations and the law.

Methods for Maintaining Corporate Culture

Why do some companies maintain their culture whereas others see it fall apart? The answer lies in how the
company goes about recruiting, hiring, onboarding, and training its employees.

a. Recruiting. To find employees who will fit into the corporate culture, recruiters must look in the right
places. When looking for upper-level managers, recruiters should look at corporations with a similar
culture to their own. When looking for entry-level employees, recruiters should tap college programs or
websites that reflect their corporate culture.

b. Hiring. When interviewing job candidates, managers and human resources managers must spend some
time assessing the candidate’s assumptions and values. Is this person a collaborator or a competitor?
Are candidates detail-oriented or innovative? Candidates whose personal assumptions and values match
the corporate culture are much more likely to help maintain that culture over time.

c. Onboarding. The “onboarding” process is really a new employee orientation process. During
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 onboarding, human resources personnel help the new employee get to know company policies and
practices. It’s during onboarding, for example, that a new employee may learn that each team puts
together a skit for the company holiday party or that bonuses can be earned as a result of exceeding sales
goals.

d. Training. Training can be both formal and informal. Whereas formal training may teach new employees
how to use company software or systems, informal training may involve one-on-one conversations with
peers and managers. During those conversations, new employees learn how the company culture
manifests itself in the workplace. For example, they may learn that everyone—even bad players—take
part in departmental softball games, or that recycling is a “must” in the lunchroom. All these subtle bits
of information add up to an understanding of corporate culture.

Once an employee is hired, he or she may feel comfortable or uncomfortable in the new workplace. Typically,
those employees who feel “at home” in the corporate culture tend to stick around, whereas those who feel like
outsiders tend to leave at the first good opportunity.

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Visible Signs of Culture

When you walk into a business setting, you should be able to see visible signs of the business’s organizational
culture. If you spend a few weeks on the job, you should see even more. Here are just a few things to look out
for:

 How employees dress. Most employers have some

kind of dress code. Some are quite casual whereas
others require more formal clothing. In a minority of
businesses there is no dress code at all, and
employees are welcome to wear short, sleeveless
tops, and even flip-flops to work.
 Snack areas and candy jars. How people- oriented
is your business? In some workplaces, employees
have all-day access to snack bars, free soft drinks,
coffee, and
 other goodies. Candy jars are also a sign that a
business is open to people-oriented treats.
 Plaques and awards. In some businesses, plaques
and awards honoring employees are placed front and
center. Some honor individuals as “employee of the month,” whereas others recognize specific
achievements such as “most sales made in a month.”
 Mission statement. In many corporations, the organizational mission is posted on every floor. The
mission is intended to remind employees why they are there and what their goals and attitudes should
be.
 Events and rituals. Many workplaces have customs or rituals that become obvious within just a couple
of weeks on the job. Whether it’s “happy hour Friday,” “dress down Tuesday,” or weekly update
meetings, employees quickly learn the routines.
 Physical layout and décor. When you walk into a workplace, what do you see? In some offices, gray
cubicles dominate; in others, the workspace is wide open. In some businesses, individuals are
encouraged to bring in and show off photos, posters, and plants; in others employees are asked to keep
personal items to a minimum.

Recognizing the culture is the beginning of adapting to it and, perhaps, using it to persuade management to your
ideas.

TOPIC 4: Initiating and Fostering Cultural Change

Smart managers and leaders know when a change is needed within their organization.

When times change, corporations may need to change as well. Many factors can make change necessary,
ranging from social norms to technology to new ways of doing business. No matter why cultural change is
needed, it’s never easy. That’s because human beings, in general, resist change. To make cultural
change successful, therefore, companies must create change management strategies and stick to them over time.

Initiating Change

Although there are many ways to initiate change, the most effective methods come from the top down. One
of the keys to making change happen is the actions of the corporate leader.

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 a. Create a sense of urgency. Why should employees change their habits, systems, or ways of doing
business? If there’s no emergency, employees are likely to resist change. But what if your business is
likely to fail if you don’t reinvent some of your culture and practices? In 1993, IBM was facing just such
a crisis. Lou Gerstner, IBM’s CEO, made it clear to employees that the situation was truly dire: change
or die. In a short time, IBM shifted from being an old-fashioned, stuck-in-the-past footnote to a future-
facing, innovative organization.
b. Role modeling. If the need for organizational change is communicated from the top down, it must be
modeled from the top down as well. When a corporate leader is truly committed to change, he or she
becomes a guiding light for the entire organization. A leader can model change through public actions
such as press conferences or presentations. More significant, however, are actions that show that the
leader is truly taking his or her own ideas to heart. Not only is it inspiring to see a leader taking his or
her own advice to heart, but it’s also helpful to see what the change really looks like. Robert Iger, who
became CEO of Disney, was concerned that innovation was fading. To show his commitment to cultural
change, he jumped in to provide hands-on help with game creation.
c. Changing leaders. Once a company has made a commitment to change, it’s important that all members
of the senior management team understand and embrace the change. In some cases, individuals may
dig in their heels and refuse to change their practices. When this happens, the company has little choice
but to terminate their employment.

Managing Change

As is often the reality, it’s easy to start a process—but much more difficult to manage it over time. The
following techniques can help ensure that change is institutionalized:

a. Excellent communication. That’s the key conclusion of a 2016 study, “Where Change Management
Fails,” from Robert Half Management Resources. This survey of 300 senior managers found that most
change efforts failed in the implementation stage—on shoals of broken or inadequate communication.[1]
b. Changing leaders who present barriers to change. It’s hard for employees to make change when their
own managers are resistant to new ideas. When leadership is standing in the way of positive change,
upper management may have to “clean house” by dismissing managers who, for personal or political
reasons, are unwilling to bend.
c. Training programs. When organizational culture is the source of unethical or unsafe practices, training
can be the key to change. The same is true for changes related to customer service. The Midas auto
repair chain, for example, used training to help employees better empathize with customers’ needs and
concerns.
d. Changing reward systems and corporate symbols. To let employees know things have really
changed, it may be necessary to change incentives. For example, if a company has rewarded individual
achievement but wants to see a cultural switch to teamwork, it may need to reward team
accomplishments. Similarly, the company may need to change the visual symbols it uses to reflect the
new organizational culture.
e. Changing the look and feel of the workplace. A workplace “makeover” can have a profound impact
on change. Visual cues can quickly and effectively let employees know that they are encouraged to
gather around a large table in a shared work area, or that managers in an open environment are available
for questions and collaboration.

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 TOPIC 5: Employee Diversity

A manager who oversees a diverse workforce may find

certain advantages and challenges in her job.

What Is Diversity in the Workplace?

Until the 1950s and 1960s, diversity was not associated

with the workplace in the United States. In general, people
were hired based on their gender, race, social status, and
religion. Women were often asked to leave their jobs if
they married or became
pregnant. No accommodation was made for disability
except by special arrangement.

A diverse workplace isn’t always easy to achieve, as some

locations, industries, and positions tend to attract people
of certain backgrounds. To diversify the workplace, some
companies make a significant effort to reach out to diverse
communities. For example, they might reach out to the
veterans community, which includes thousands of individuals of all backgrounds, many of whom have solid
training and experience.

Advantages of Employee Diversity

When a workplace employs only people of similar background, education, and lifestyle, it’s easy for employees
to reinforce one another’s preconceptions and prejudices. When people of different cultures and backgrounds
are valued and heard, however, new ideas and opportunities emerge. The Peterson Institute for International
Economics studied the impact of female executives in ninety-one countries and almost twenty-two thousand
firms. The firms with more women in corporate leadership did better. [2] A study of this kind cannot determine
cause and effect. For example, better performance may result from the non discrimination policies and a more
open culture, but diversity is a winning strategy either way. Here are some ways that diversity can positively
impact an organization:

Diversity enhances creativity. People from different places, ethnicities, and lifestyles can bring fresh
ideas to an older corporation. Could a product be made to appeal to a whole new demographic? How
might a particular service be advertised to a new ethnic market or the disabled community? By including
people of different backgrounds in the conversation, managers get valuable insights into different points
of view.
Diversity enhances image. Today’s marketplace is diverse; so, too, are customers. When a company
can present itself as diverse, clients and buyers respond positively.
Diversity improves outreach. Employees from different parts of the world or different communities
can help a corporation to understand and reach out to new markets.
Diversity improves morale. When employees of all backgrounds and abilities feel valued, they are
more likely to be loyal, engaged, and productive. Employees are also more likely to feel a sense of pride
and belonging when they are associated with an employer that clearly cares about the well-being of all.

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Name : Subject: Intro To Management And Leadership
Year & Section: Instructor: CHENIE MAY R. SUMANDE
Task/Activity

Research one company/agency/institution, then answer all of the following questions:

1. Based on your research, which of the seven dimensions of organizational culture does the company
most closely align with?
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2. What sources have influenced the company’s culture most significantly?

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3. How does the company maintain its culture?

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 4. After learning more about the company’s culture, do you still want to work there? Explain why you
think the company would or wouldn’t be a good fit for you.

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 LESSON 7 LEADERSHIP

TOPICS
Introduction to what makes an effective leader
Introduction to Effective vs. Poor Leadership
Situational theories of leadership
Introduction to transformational and transactional theories of leadership.

LEARNING OUTCOMES
At the end of the lesson, you should be able to:
Identify the traits of effective leaders.
Compare examples of effective and poor leadership.
Summarize the situational theories of leadership.

4. Summarize transformational theories of

leadership.

TOPIC 1: Introduction to What Makes an Effective Leader

Introduction

As people have pursued an understanding of what makes an effective leader, their attention has often moved to
the key personal traits those leaders exhibit. The idea is that identifying those common traits will help
businesses identify effective leaders and help individuals know how to become better leaders. What are some of
those common traits?
Research on traits has many critics. One example that follows will illustrate that someone perceived as a leader
may not be the most effective leader in the long run. Nevertheless, some companies will use traits or personality
in making hiring or promotion decisions.

Leadership Traits Drive

Leaders tend to be highly motivated individuals. This

inner drive is reflected in a number of common ways.
They reflect a greater effort level in general, they strive
for achievement, they have greater ambition, they work
with greater energy, they are often tenacious, and they
are more likely to take the initiative rather than wait for
someone else to do so.

Desire to Lead

Effective leaders also tend to have a strong desire toward

leadership roles and functions. Although others are
happier to allow others to take the lead, leaders want to do so themselves.

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Honesty/Integrity

The moral aspect of leadership is highly significant. Effective leaders must demonstrate high levels of honesty
and integrity. This is essential to inspiring confidence and trust from employees and other followers, without
which a leader is not likely to be effective. Dishonesty may not always be revealed at first, but it usually is with
time. There are many stories of business leaders who are successful for a period of time but later find
themselves in serious trouble due to dishonest or unethical practices. For example, Martin Winterkorn became
embroiled in ethical and legal controversy after a period of strong success as CEO of Volkswagen.

Self-Esteem /Self-Confidence

These two elements, self-esteem and self-confidence, are closely related and tend to be prominent in leaders.
Perhaps it is best to view these traits in terms of the negative perspective. A lack of self-esteem and self-
confidence is very problematic for a leader. When these traits are lacking, doubts arise and insecurities plague a
leader’s activities. The leader tends to be confident that his beliefs, plans, and actions are correct (hopefully
with good reason). This confidence is important in that it enables the leader to persist steadfastly in the right
course even when there are obstacles and doubts from others.

Open-Mindedness

At the same time, effective leaders also tend to be open-minded to new ideas and experiences. They recognize
that innovation is often valuable, and they also tend to consider ideas and suggestions from others. Self-
confidence and self-esteem do not have to conflict with this spirit of open-mindedness. When they do, the result
is generally harmful.

Intelligence

One obvious trait that many people look for in leaders is intelligence. Studies have shown that this is indeed an
important qualification. It has been suggested, however, that pure cognitive ability is a “threshold” qualification.
That is, it is important for the entrance into leadership roles. However, once within the leadership circle, most
individuals have relatively high intelligence levels, so mere cognitive ability is not enough to distinguish a
leader from other leaders.

Further, pure cognitive ability is only one type of intelligence. Relational and emotional intelligence are also
important aspects for leaders to develop. An over-reliance on strict cognitive intelligence can be very inhibiting
to effective leadership.

Extraversion

Bill Gates, Microsoft Mark Zuckerberg, Facebook

Another unsurprising personality trait that is commonly associated with leadership is being an extrovert.
Leaders tend to be outgoing and social in their personalities, which helps them take the lead and act with
initiative. It also helps them with the important aspect of connecting to and inspiring others through
relationships.

Though many leaders are extraverts, there are certainly examples of successful leaders who are not. Sometimes
other strengths are sufficient to compensate for not being an extravert, or sometimes a leader who is not
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naturally an extravert is able to train himself to be more outgoing in behavior when needed, though this still
does not generally change the leader’s basic personality. Bill Gates of Microsoft and Mark Zuckerberg of
Facebook are two prominent examples of extremely successful leaders who are introverts by personality.

Knowledge of the Business

Another key ingredient in the leadership trait mix is knowledge of the business. Even if an individual has all the
natural personality traits desired of leaders, a lack of knowledge and experience is usually impossible to
overcome. A leader must be competent in his field, and the most effective leaders are usually experts with deep
insight.

Styles of Leadership

Though a trait-based analysis of leaders is a common approach, another way to evaluate leaders is to analyze
their behavioral leadership styles.

Task-Centered or Employee-Centered

Most behavioral leadership styles fall within two broad categories: task-centered styles and employee-
centered styles.

Task-centered styles of leadership focus on giving instructions and directions to group members to reach
achievement and accomplishment goals more efficiently and effectively. The focus is on the objective analysis
of what needs done and the specific course of actions that should be taken to meet those needs. Employees are
seen as resources to be used to accomplish the goals.

Employee-centered styles of leadership focus less on objective actions or plans and more on building the
relationships between themselves and their followers. By encouraging and supporting them, the leader hopes to
make them more qualified, confident, and productive. His focus is on developing his employees and inspiring
them to follow the vision he has provided.

Employee-centered styles are also often referred to as people-centered or relationship- centered.

Of course, many leaders would hope to combine qualities from both of these styles, but the tendency is for
individual leaders to focus more strongly on one or the
other.

Autocratic, Democratic, or Laissez-faire

A leader’s style can often be identified by the manner in

which he makes decisions, especially the degree to which
he involves his employees. This aspect of leadership is
often divided into a spectrum with three broad categories:
autocratic, democratic, and laissez-faire.

An autocratic leader makes decisions without significant

employee involvement in the process. He works from an
authoritarian perspective. This approach often corresponds to a task- centered style. This approach can be faster
and more efficient than more discursive approaches.

A democratic approach strongly involves the employee team in the decision-making process. This can take a
variety of forms. For example, the employees may discuss the issue together as a group, followed by the leader
making the final decision. Alternatively, the leader might agree to allow the employees a final vote in the
matter. In any case, employees have a significant role to play in the process.

A laissez-faire approach is a very hands-off approach to leadership. Instead, employees make decisions on their
own. This approach generally leads to lower productivity, but it may be the best where employees are experts or
where creativity is needed.

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TOPIC 2: Introduction to Effective vs.Poor Leadership

Warren Buffett, Berkshire Hathaway

Warren Buffett has become one of the wealthiest men in the

world through his leadership of the investment and holdings
company Berkshire Hathaway Inc. As chairman, president, and
CEO, Buffett is the obvious formal leader at Berkshire
Hathaway, but his effective leadership is perhaps better
demonstrated by the devoted following he has outside of the
official structure of the company. Thousands of individuals
travel to hear him at his annual investor meetings, follow his
activities and advice, and read his annual shareholder letter.
One of the easily identifiable reasons for this is his unparalleled
success as an investor, which has led to his becoming one of the
wealthiest individuals in the world However, there are also a
number of key features of his leadership style that have
strongly contributed to his effectiveness and One interesting
fact about Buffett is his “light touch” as a manager. His work is
to identify companies for purchase that he believes are well-
managed and situated for success. As a rule, he buys only
companies whose directors and direction he trusts. Because he has confidence in them and their direction, he is
happy to leave them to their work with as little interference as possible, which is a trait that appeals to many
companies looking for a potential buyer.

If we look at Buffett’s informal leadership influence, a number of traits stand out as contributing forces for his
effectiveness. To begin with, he is an excellent example of a leader who presents a vision, stands firmly behind
it, and inspires others to confidence and enthusiasm about that vision His approach to investing is starkly
different from that of many others. He emphasizes a deep understanding of companies and their industries, even
refusing for the most part to involve himself in the tech sector simply because he feels he doesn’t understand
that realm well enough to make wise investing decisions. He urges the wisdom of buying solid, successful
companies and trusting in their long-term success. This approach contrasts sharply with an eager obsession to
discover an unknown company that is about to explode in value and provide quick riches. This patient, steady
approach to long-term investing has proven effective in the extreme, and many others have placed their
confidence in Buffett’s message and vision. As an important ingredient in this vision-casting, many have
attested to Buffett’s skill in presenting his approach with a great simplicity that enables his followers to
understand the vision easily and deeply, inspiring further confidence.
influence with his followers.

Two other aspects of Buffett’s leadership style call for comment: his truthfulness and his optimism. He
represents what many consider the “honest” way to achieve investing success. He has not sought quick riches
through questionable means. He has been transparent and straightforward about his activities. He has also been
quick to recognize his mistakes in investing when he has made them. This honesty and transparency are
appreciated, especially in contrast with the opposite feeling that surrounds too many in the investment world.

Buffett’s optimism and positivity also contribute to his overall effectiveness as a leader. He sees the future as
one of bright potential and focuses on that potential rather than dwelling on mistakes and other negative aspects
of life. Though he certainly recognizes problems and is straightforward about negative situations, he does not
allow them to control his outlook. He challenges
others to adopt that same positive mindset, and many
have responded to that challenge.

Carrie Tolstedt, Wells Fargo

Executive Carrie Tolstedt is viewed as largely

responsible for the fraudulent accounts scandal at
Wells Fargo.
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Another leadership lesson can be learned from the career of Carrie Tolstedt of Wells Fargo. Rising to
prominence from humble beginnings, Tolstedt was highly praised as a leading businesswoman both by those
within her company and those outside. She earned numerous awards and was seen as a trailblazer for women
within the banking industry. Her vision of retail banking was so successful that under her management as head
of community banking, Wells Fargo quickly became an industry leader in many areas, such as retail deposit
volume and customer loyalty. She espoused her belief that banking was all about serving others, helping them
succeed financially. Her rise to success in the banking world has been described as something out the
storybook.

The narrative quickly changed, however, when revelations were made of widespread fraudulent account
creations within the bank. There are many similarities to Winterkorn’s case with VW. Tolstedt was renowned
for her ambitious goals for sales and customer account creations. She pushed managers and employees to reach
goals that many thought were unrealistic, and she encouraged them to find their own creative ways to achieve
those goals. Even when dishonest activity was reported, Tolstedt and others judged this an acceptable cost for
the growth. The climate created by the high demands once again fostered the fraudulent activity.

Further criticism has suggested that Tolstedt did not show significant concern for the harm done to customers
through the fraudulent activities taking place. An internal investigation found she was resistant to change and
inflexible. The failure to address the fraud became a huge problem for both her and the company.

Negative stories such as these remind us of the complexity of leadership and management. Tolstedt set a simple
growth goal and paid meaningful rewards to those who met it. The next module discusses the dangers of simple
goals. Employees will ignore the negative consequences and pursue the goal single-mindedly. Leadership is
responsible for seeing the big picture, not just the simple measures embedded in the incentive system.

Larry Page, Google

Larry Page, cofounder of Google

Larry Page, cofounder and CEO of Google, provides an interesting

contrast in leadership styles to many other successful leaders. Page
is certainly considered demanding and highly motivated, and the
success of Google under his guidance has been outstanding. His
approach to leadership, however, has fostered a very different
atmosphere than in some of the previous examples. Google’s
employees rate their work environment highly, and Page himself
receives some of the highest approval ratings for CEOs in the
business real.

One of Page’s outstanding traits is his commitment to pursing

innovation. He believes that outlandish and seemingly impossible
ideas should be cultivated and encouraged, not rejected. These are
the ideas, he says, that can change the world.

The “demanding” aspect of his leadership arises from this desire to

pursue innovation. Page is able to inspire his team to seek that
innovation with him, rather than drive them to fear of failure. Employees and executives who have worked for
and with Page have attested to the fact that he invites open discussion of ideas, even if they might contradict his
own thoughts. When Page visits meetings and teams of researchers and engineers, as he often does, his visits
are not dreaded but welcomed. His persistent questioning is received as a team effort to improve and strive for
new ideas rather than seen as an effort to find problems that will be the basis for rebuke. Even though Page’s
personality tends toward the reserved and introverted end of the spectrum, he has found the right approach to
connecting with and inspiring his team members.

TOPIC 3: Introduction to Situational Theories of Leadership

Situational theories of leadership work on the assumption that the most effective style of leadership changes
from situation to situation. To be most effective and successful, a leader must be able to adapt his style and
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approach to diverse circumstances.

For example, some employees function better under a leader who is more autocratic and directive. For others,
success will be more likely if the leader can step back and trust his team to make decisions and carry out plans
without the leader’s direct involvement. On a similar note, not all types of industries and business settings
require the same skills and leadership traits in equal measure. Some fields demand a large measure of
innovation, whereas in others, personal charisma and relational connection with clients are far more important.

Different theories have been developed that recognize the situational aspects of leadership. Each theory
attempts to provide its own analysis of how leadership can be most successful in various situations. Let’s
consider a few of the key theories.

Hersey and Blanchard’s Situational Leadership Theory

The term “situational leadership” is most commonly derived from and connected with Paul Hersey and Ken
Blanchard’s Situational Leadership Theory. This approach to leadership suggests the need to match two key
elements appropriately: the leader’s leadership style and the followers’ maturity or preparedness levels.
The theory identifies four main leadership approaches:
Telling: Directive and authoritative approach. The leader makes decisions and tells employees what to do.
Selling: The leader is still the decision maker, but he communicates and works to persuade the employees rather
than simply directing them.
Participating: The leader works with the team members to make decisions together. He supports and encourages
them and is more democratic.
Delegating: The leader assigns decision-making responsibility to team members but oversees their work.

In addition to these four approaches to leadership, there are also four levels of follower maturity:

a. Level M1: Followers have low competence and low commitment.

b. Level M2: Followers have low competence, but high commitment.
c. Level M3: Followers have high competence, but low commitment and confidence.
d. Level M4: Followers have high competence and high commitment and confidence.

In Hersey and Blanchard’s approach, the key to successful leadership is matching the proper leadership style to
the corresponding maturity level of the employees. As a general rule, each of the four leadership styles is
appropriate for the corresponding employee maturity level:

a. Telling style works best for leading employees at the M1 level (low competence, low
commitment).
b. Selling style works best for leading employees at the M2 level (low competence, high
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 commitment).
c. Participating style works best for leading employees at the M3 level (high competence, low
commitment/confidence).
d. Delegating style works best for leading employees at the M4 level (high competence, high
commitment/confidence).
e. Maturity levels and leadership styles

Identifying the employee maturity level becomes a very important part of the process, and the leader must have
the willingness and ability to use any of the four leadership styles as needed.

Normative Decision Theory

One final theory we will look at is Vroom and Yetton’s Normative Decision Theory. This approach is intended
as a guide in determining the optimum amount of time and group input that should be committed to a decision.
A leader has a number of options available to him in this regard:
 He can make a decision entirely by himself.
 He can use information from team members to make decisions.
 He can consult team members individually and ask their advice before making the decision.
 He can consult team members as a group before making the decision.
 He can consult the team as a group and allow the team as a whole to make the decision.

Victor Vroom and Phillip Yetton provide a model that helps leaders decide when to use each approach. The
model walks leaders through a series of questions about the decision to be made, and the answers will lead the
decision maker to the suggested approach. The questions focus on a few key factors:

 Is decision quality highly important?

 Does the leader have sufficient information to make the decision?
 Is it highly important for team members to accept the decision?
 Are the team members likely to accept the leader’s decision if he makes it individually? What if he
makes it with their consultation?
 Do the team members’ goals match those of the leader and organization?
 Is the problem structured and easily analyzed?
 Do team members have high levels of expertise in the matter to be decided?
 Do team members have high levels of competence in working together as a group?

Leaders are challenged not only to make good decisions, but to decide who decides. At times, the best choice is
to involve others in the decision.

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 TOPIC 5: Introduction to Transformational and Transactional Theories of
Leadership

Transactional Leadership

Every form of leadership involves some method for motivating employees. With transactional leadership,
motivation is derived from an arrangement whereby employees are rewarded for accomplishing goals set for
them or tasks assigned to them.

This system is extremely common and familiar. One basic form is when sales representatives are paid on
commission or given performance bonuses for the numbers of sales they complete. The leader or organization
wants the employee to secure sales, so the motivation is provided in the form of money. This transaction of
performance for compensation satisfies the wants of both parties—leader and follower.

Transformational Leadership

Transactional leadership theories assume that the desires of the leader and the desires of the follower are not the
same. Because of this, the leader must provide some form of extrinsic motivation for the follower. Without this,
the follower will not want to do what the leader desires.

The concept of transformational leadership takes a different approach to solving the dilemma. Rather than
providing an extrinsic motivation that appeals to the follower’s different desires, transformational leadership is
committed to changing the desires of the follower so that they match the desires of the leader. If the leader can
transform the follower’s wants so that he himself shares the leader’s vision and desires, the follower will have a
greater source of motivation to pursue that vision and goal.

Transforming the follower’s desires is not always an easy task, of course. It is generally easier to provide some
form of external compensation. What tools can transformational leadership use to accomplish this task? There
are four main categories that are usually identified:

 Idealized influence
 Inspirational motivation
 Intellectual stimulation
 Individualized consideration

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Name : Subject: Intro To Management And Leadership
Year & Section: Instructor: CHENIE MAY R. SUMANDE
Task/Activity:

1. Select a leader to profile in your written report. You may select one you admire, or a “good
example.” There are numerous websites naming leaders to get you started. A quick search on
“famous contemporary leaders” revealed millions of possible lists, or you may select a leader in
your personal or professional life: your boss, a coach, a team leader, etc.
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2. Research your chosen leader, identifying evidence of his/her traits, styles, and leadership situations.
Relate your findings to the module concepts. For example, how did your chosen leader demonstrate
the trait of “desire to lead”?
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3. Review the leadership traits identified in your reading. Which trait do you think is most important
for a leader to possess? Which do you think is least important? Explain your choices.
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4. Your reading included examples of poor leadership, including Martin Winterkorn at Volkswagen
and Carrie Tolstedt at Wells Fargo. Under these leaders, employees acted unethically, resulting in
harm to customers as well as the business. Choose an example of poor leadership from your
reading or elsewhere, and explain what you think the leader could have done differently. What role
did the leader’s situation play in his or her actions? What would you have done in a similar
situation?
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 LESSON 8 MOTIVATION

TOPICS
Importance of Employees Motivation
Needs Based Theories of Motivation
Process-Based Theories of Motivation
Introduction to Job Characteristics that affect Motivation
Introduction to Goal-Setting Theory
Introduction to A Manager’s Role in Motivating Employees

LEARNING OUTCOMES
At the end of the lesson, you should be able to:

Explain the importance of employees motivation in an organization.

Differentiate between Maslow’s hierarchy of needs ad Herzberger two
factory theory of needs.
Explain equity theory.
Describe the job characteristics that affect motivation.
6. Explain how companies address basic needs of

TOPIC 1: Types of Motivation

Motivation is the collection of factors that affect what people choose to do, and how much time and effort
they put into doing it. There are two forms of motivation: intrinsic and extrinsic. These forms refer to the
origin of the motivation. Intrinsic motivation exists within a person; extrinsic motivation comes from external
or outside sources.

Intrinsic Motivation

Intrinsic motivation includes many internal sources of motivation. These might include:

interests
beliefs
personal enjoyment and pleasure
sense of accomplishment
personal pride
skill development and competency
social status
power

Extrinsic Motivation

Extrinsic motivation includes motivational stimuli that come from outside the individual. These stimuli take the
form of tangible rewards, such as commissions, bonuses, raises, promotions, and additional time off from work.
For example, an employee who will take on extra work, provided there is a sufficient reward for this extra
effort, is extrinsically motivated. Extrinsically

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motivated people may also value the intrinsic rewards, but only if the extrinsic reward is sufficient.

Seldom is anyone exclusively intrinsically or extrinsically motivated. Even though someone may have strong
preferences, they can overlap depending on the circumstances.

TOPIC 2: Introduction to Needs-Based Theories of Motivation

Several motivational theories state that employee performance and satisfaction is based on how well the
company meets the needs of the employee. There are four major theories in the needs-based category: Abraham
Maslow’s hierarchy of needs, Frederick Herzberg’s dual factor theory, Clayton Alderfer’s existence-
relatedness-growth (ERG) theory, and David McClelland’s acquired needs theory.

Maslow’s Hierarchy of Needs

Abraham Maslow, one of the most prominent psychologists of

the twentieth century, created a hierarchy of needs, illustrated
by a pyramid representing how human needs are ranked.
Maslow’s theory is based on the premise that human beings are
motivated by needs ranked in order hierarchically. Some of
these needs are simply essential to all human beings. When a
basic need is satisfied, we begin to seek higher-order needs.

Abraham Maslow’s hierarchy of needs shows physiological

needs as the most essential.

The first essential motivational needs, according to Maslow, are

our physiological needs, such as air, food, and water. Once our
physiological needs are satisfied, we become concerned about
safety, which includes our own physical safety and security, as well as our employment security. The next need
to fill is social: our need to bond with other human beings. The need for love, friendship, and family is
considered to be a fundamental human motivation. When we have achieved a sense of belonging, our need for
esteem—the desire to be respected by one’s peers, feel important, and be appreciated—becomes more salient.
The highest level of the hierarchy is the need for self-actualization, which refers to “becoming all you are
capable of becoming.” People can fulfill this need by learning new skills, taking on new challenges, and taking
action to pursue their life goals.

Two-Factor Theory

When studying motivation, Frederick Herzberg started by asking employees what was satisfying and
dissatisfying on the job. Herzberg found that certain factors just had to be met and did not raise satisfaction.
However, if these factors, called hygiene factors, were not met, it led to strong dissatisfaction. The hygiene
factors causing dissatisfaction were part of the context in which the job was performed. Company policies,
supervision, working conditions, salary, safety, and security on the job are some examples of hygiene factors.
For example, you may not link your satisfaction to your office having good lighting, but you would be very
dissatisfied if the lighting was too poor to read.

Motivators are the factors that employees need in order to give higher levels of effort. According to Herzberg,
the strongest motivators are interesting work, responsibility, achievement, recognition, growth, and
advancement.

ERG Theory

Clayton Alderfer modified Maslow’s

hierarchy of needs into three categories:
existence, relatedness, and growth (ERG). The
figure below illustrates how the ERG needs
correspond to Maslow’s five levels. Existence
correspondsto psychological and
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 safety needs; relatedness corresponds to social and self-esteem needs; and growth
corresponds to self- actualization needs.

The ERG theory does

not force the order of needs fulfilment, and it supports the pursuit of different levels simultaneously. As a
manager, you may notice some people regressing, which shows up when they continue to put effort into lower-
level needs rather than pursuing the higher-level needs. The theory suggests that managers will need to help
regressing employees see the importance of their pursuit of higher needs to their personal growth. This is
referred to as the frustration- regression principle.

Acquired Needs Theory

Some studies have found that David McClelland’s acquired needs theory can predict success in management.
The need for achievement, affiliation, and power all operate in combination and are the result of a person’s life
experiences.

People who have a strong need to be successful have a high need for achievement. A high need for
achievement results in a high level of satisfaction when that person completes projects on time, closes sales with
prospects, or drives new and innovative ideas. Jobs that have very explicit goals to be reached are ideal for
individuals who have a high need for achievement. Feedback must be regularly available and easy to
understand, as they need feedback to determine their next steps in pursuit of the goal. However, a high need for
achievement can be problematic as a person is promoted into management. Instead of relentlessly pursuing his
or her own goals, this manager must now get the work done by motivating others. It is not uncommon for a
manager with a high need for achievement to view coaching and meeting with subordinates as unnecessary.
This type of manager will need to resist micromanaging or trying to do the work himself.

People with a high need for affiliation value building relationships. The affiliation-driven employee will be
effective in team settings, a strong collaborator, and eager to work with new people.
Managers with a high need for affiliation may find it difficult to deliver unpleasant news and critical feedback.
The affiliation-driven manager will need to see the value of providing feedback that will help poor-performing
subordinates improve.

People with a high need for power are motivated to influence others and control their environment. Their focus
is on the larger strategy, the “big picture.” The need for power can be positive in improving the way work is
done, negotiating for more resources for a department, or gaining more responsibility for a team. The need
for power can be a negative for the firm when it means beating someone else. Of the three acquired needs, the
need for power is strongly correlated with effectiveness in managerial and leadership positions.

As a manager, you will be wise to understand employees’ different needs and how that will translate into
motivation. Clearly defined goals, timelines, and feedback will be attractive to those with a high need for
achievement. Providing and encouraging acknowledgment of good work will motivate people with a high need
for affiliation. Employees with a high need for power will be looking for opportunities with more influence and
decision making.

TOPIC 3: Process-Based Theories of Motivation

Equity Theory

Equity theory is about perceived fairness. The theory says motivation depends on a comparison to others, called
a referent. The employee compares his input and output to colleagues, someone at another firm, or a cousin in
another state. If an employee feels he is putting more into a job than what he gets out of the job, relative to the
referent, he will become demotivated, disgruntled, and even disruptive.

Here’s an example of the role equity plays in motivation:

A friend graduated from your current college last year with a degree in accounting. After several interviews,
she accepted a position with a top accounting firm. She was pleased with the offer: challenging work and an
opportunity to gain valuable experience, and the highest salary of any accounting major from your school that
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was offered last year—$6,500 a month.
Twelve months have passed. You graduated with an accounting degree as well, and got hired by the same firm
as your friend. Your friend has enjoyed the challenges, worked hard and performed very well, and even
received a $200-a-month raise. However, when she found out you received $7,000 a month, she won’t talk to
you, and you found out she was actively looking for another job.

In this example, the relevant inputs would be the hard work your friend was providing, the number of months
she has worked there, and her loyalty to the organization. The outputs are the rewards your friend receives from
the situation. The $6,700 a month your friend is receiving is a salient output. Other outputs could include
benefits or the positive working relationship she has with her supervisor. In fact, your friend may reason as
follows: “I have been working here for an entire year. I am loyal and I work hard (inputs). I am paid $6,700 a
month for this (outputs). You do not have any experience here (referent’s inputs) but will be paid $300 a
month more (referent’s outcomes). This situation is unfair.”

Your friend’s referent is you. In other instances, the referent may be a specific person or an entire category of
people. In order for the comparison to be meaningful, referents must be comparable to us. For instance, it
wouldn’t be meaningful for your friend to compare herself to the CEO of the company; the nature of inputs and
outputs between these two people is too disparate. Instead, she could make a more meaningful comparison by
looking at co-workers who perform similar tasks within the same firm.

According to equity theory, perceived unfairness can cause distress for both the person who feels slighted and
the person who gets more than she deserves. In the above example, you might feel guilty when you find out
you’re making more money than your friend despite just starting with the firm. Equity theory asserts that people
will try to restore equity no matter which side they’re on to eliminate the negative emotions they’re feeling.
Research, however, has shown that when people are overcompensated for their efforts, they tend to
overestimate

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the value of their inputs to justify the overcompensation in their minds. So while you may feel a pang of guilt
about being paid more than your friend, you would likely rationalize your higher salary by telling yourself that
you received better grades than she did and were more qualified than her.

Procedural justice refers to the degree to which fair decision-making procedures are used. Let’s assume that
your friend asked for a promotion and presented all her accomplishments and addressed how she would handle
the increased responsibilities. For example, if she received a promotion and believed it was a result of being
recognized for her hard work, she would have a positive sense of procedural justice.

Interactional justice focuses on employees’ perceptions of the quality of the interpersonal treatment received
during the enactment of organizational procedures. A manager’s display of social sensitivity, such as the level
of respect and dignity shown to employees, will have a positive effect on employees’ level of engagement. A
rude manager will have a negative effect. The higher the level of interactional injustice employees feel, the
more likely they are to display resentment and engage in counterproductive work behavior.

In 2017, James Damore wrote an open letter to Google employees, titled “Google’s Ideological Echo
Chamber.” Damore argued that basic biological and psychological differences between men and women explain
why women are underrepresented in tech, discounting any bias or discrimination that women might face in the
workplace. This caused an uproar, and Damore was fired for creating a hostile work environment for women.
Both sides claim interactional injustice.

Damore asserted that Google management shames employees into silence. “This silencing has created an
ideological echo chamber where some ideas are too sacred to be honestly discussed,” he wrote. “The lack of
discussion fosters the most extreme and authoritarian elements of this ideology.” One rebuttal says, “The
problem here is that this was disrespectful disagreement—and there really is no respectful way to say ‘I think
you and people like you aren’t as qualified to do your job as people like me.

Expectancy Theory

Expectancy theory focuses on the cognitive process. It argues that motivation depends on the strength of the
expectation that the activity will result in a consistent and favorable outcome for an individual. Expectancy
theory is comprised of three components: expectancy, instrumentality, and valence. Expectancy is the belief or
expectation that the employee can accomplish the goal. Instrumentality asks if management will honor the
bargain. Instrumentality is high if the employee believes success will be rewarded. Valence is the degree to
which an employee values the rewards, such as a promotion or pay raise. Let’s take a look at some examples.

Joel signed up for a required business statistics class. In the early weeks, he is diligent but sees that he is already
struggling. Because he is working full time and cannot put more time into it, he decides to drop the class. He did
not expect to pass, so his expectancy was low. Mirabel is also struggling and asks a lot of questions. She is
taking fifteen to thirty minutes out of each class to get answers to her questions. She is afraid the professor is
mad at her. After she does poorly on the midterm, she decides to drop the class because the professor won’t give
her a fair break. Her instrumentality is low. Peter is doing poorly as well but he already has a good job. He
decides he doesn’t need the class or the degree and drops out. His valence is low.

Expectancy theory can explain why workers may be motivated to work hard in their job or provide the minimal
effort to simply get by. Employees will want to know if the performance appraisal will reflect any extra effort
to perform a job, whether strong performance appraisals will lead to rewards, and whether the rewards are
attractive. You can see how potentially motivating a large bonus would be, as well as how demotivating only
receiving the “employee of the month” plaque can be.

TOPIC 4: Introduction to Job Characteristics that affect Motivation

The motivational approach to job design considers the characteristics of a job that affect motivation,
satisfaction, engagement, absenteeism, and turnover.

When we covered organizational structure, you learned that the way characteristics of a job are organized can
act to increase or decrease effort (job characteristics model). Building on that model, you will learn how job
rotation, job enlargement, and job enrichment can have a major impact on motivation.
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Job Rotation

Job rotation involves periodically shifting an employee from one task or job to another in an effort to decrease
boredom. By cross-training employees, companies have also found reductions in repetitive motion injuries and
turnover. Lincoln Electric, a manufacturer of welding and cutting parts company, regularly cross-trains all its
employees, including salaried management, to weld and operate production machines. This cross-training effort
has helped minimize layoffs during downturns and increased job satisfaction.

McDonald’s, the fast food restaurant, uses job rotation. According to a manager in McDonald’s Hong Kong
locations, the young staff wants flexible working hours and is easily bored. But McDonald’s job rotation policy
makes workers feel like they can learn something new every day.

Job Enlargement

Expanding jobs horizontally by increasing the number and variety of tasks that an individual performs is known
as job enlargement. It seeks to motivate workers through reversing specialization. For example, replacing an
assembly line with modular work gives each worker more variety and responsibility. Audi, for instance, is
experimenting with modular assembly for its cars.

Although some employees may welcome the opportunity to take on more work, a 1993 study had mixed results.
The study looked at job enlargement efforts among clerical staff and managers in the financial services
industry. For most employees, the extra work resulted in less satisfaction and efficiency, and stressful overload
and errors.

Job Enrichment
Job enrichment refers to the vertical expansion of jobs. It increases the degree to which an employee also
controls the planning and evaluation of the work that she executes. An enriched job increases the employee’s
independence and responsibility. It also provides feedback, making it possible for employees to evaluate and
improve their own performance.

TOPIC 5: Introduction to Goal-Setting Theory

A goal is meant to present a challenge to an individual, but it should still be attainable. The level of challenge
should be specific to each person to increase their motivation. The more challenging a goal is, the more
focused you become on the task and the easier it is to avoid unnecessary distractions. You will be energized
to work harder toward the difficult goal. For example, imagine a high jumper training for the Olympics. With
one month left before the trials, her personal best is one-quarter inch away from the qualifying height. With the
goal in sight, she’s energized to train hard over the next month. People persist longer to attain difficult goals.
Finally, and most importantly, difficult goals will allow us to develop strategies that help us perform more
effectively.

Feedback on a goal is an ongoing requirement to be aware of progression or regression. An employee will

require feedback on how well he or she is progressing toward his or her goals. Feedback can help an employee
determine what she has done and what she wants to do. The easier it is for an individual to monitor his or her
own progress, the quicker the individual will be able to make adjustments, if needed, or continue without
hesitating for feedback.
Introduction to Reinforcement Theory

TOPIC 6: Introduction to a Manager’s Role in Motivating Employees

Motivation in the workplace consists of three factors: the employee, the organization, and the manager. In this
section, we will address how organizations address employee’s needs, and how managers can individualize
motivation strategies.
Addressing Basic Needs

Managers have a critical role to find out what each employee cares about. A mother may need flexible hours.
Another person’s motivation may be mostly intrinsic, and he needs space (autonomy) to work his way.

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Someone else may need rules and structure. The work environment may not allow much flexibility, but just
recognizing an individual’s preferences is a strong first step.

Looking again at Maslow’s hierarchy of needs, an organization starts by providing a safe workplace and job
security. In turn, an employee can be self-motivated to fulfill his or her higher-level needs. However, each of
the organizational structures can pose challenges to employees in reaching their full potential. A strict
hierarchical structure will minimize a person’s stress from ambiguity about their responsibility and may provide
job security. However, that person’s need for more challenge, broader interaction throughout the company, and
professional growth may take longer than the employee would like. A team-based structure will address the
need for more challenge and broader interaction, but it can lead to job insecurity if a person’s role is not clear
when the team project is completed.

All of the needs- and process-based theories of motivation can be addressed within any organizational structure.
First, companies can start by paying their people an appropriate, livable wage. Salary should be enough that
employees are not distracted by pending mortgage payments or taking a second job to make ends meet. Many
firms offer both salary and incentive pay. Second, a sense of belonging can be fulfilled by having jobs aligned
to a clear common purpose of the company. Social interactions can be formal and informal, and rewards and
recognition need to be clearly and consistently applied to increase motivation and engagement. Managers need
to be held accountable for tracking their employees’ personal and career growth within the company.

Managers Are Motivators

Ultimately, managers have the greatest influence on an employee’s motivation. Even though someone’s
manager can’t substantially affect the company’s structure, culture and reward systems, the manager can link
performance to recognition, bonuses and good work assignments. It is your manager who most directly
promotes and implements any of the organization’s policies and procedures. The best managers are able meet
each subordinate’s most important needs. All employees will have varying needs for autonomy and what areas
of work they would like to specialize or master. And all employees need to see that their work is tied to the
common purpose of the team and the company.

Name : Subject: Intro To Management And Leadership

Year & Section: Instructor: CHENIE MAY R. SUMANDE

Task/Activity:

Watch the full video on a TED Talk by Dan Pink, Pink, a former speechwriter, career analyst, and author of the
book Drive: The Surprising Truth About What Motivates Us, reveals some remarkable facts about motivation
that have been confirmed in many social science experiments, but aren’t widely recognized. Pink argues that the
way we’re motivating people is all wrong, and he proposes a new model to replace traditional incentives.

1. Did you find Pink’s talk surprising? Why or why not?

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2. How do you think managers can use this knowledge to motivate their employees? How will you
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 use this knowledge in your own pursuits?
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 LESSON 9
THE INDIVIDUAL AND THE
ORGANIZATION
TOPICS
Personal values and Personality at work.
Common Management Biases.
Attitudes that affect Job Performance.
Job Fitness and Performance.

LEARNING OUTCOMES
At the end of the lesson, you should be able to:

Evaluate whether personality test can predict performance.

Explain some of the biases that affects a managers perception of employees.
Differentiate job satisfaction and organizational commitment.
Explain the concept of fitness within an organization.

TOPIC 1: Personal Values and Personality at Work

Personality

Employees are individuals. How does their individuality affect their participation within an organization?

That is a big question, and there are different perspectives on how to answer it. Most answers place at least
some emphasis on an individual’s personality. Though there are several approaches to defining personality, one
commonly accepted formula for this is known as the “Big Five” personality traits, which you can remember
using the acronym OCEAN. Personality psychologist Lewis Goldberg popularized the use of the following five
traits in describing personality:

 Openness: how willing and eager an individual is to try new experiences and
consider new ideas
 Conscientiousness: how concerned an individual is to be organized, punctual, reliable, and dependable
 Extraversion: how eager an individual is to
 be outgoing and have social interaction
 Agreeableness: how desirous an individual is to please others and be friendly, sensitive, and kind
 Neuroticism: how negative, moody, and emotionally unstable an individual is

Goldberg’s Big Five personality traits

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Values
Personality traits are one large aspect of an individual’s makeup, but personal values introduce another vital
area of interest and importance. Values are described as the stable, enduring goals that one has for life, the
things that are counted as most important to the individual.
As with personality traits, many systems have been proposed for analyzing the values of individuals. One
widely accepted system was developed by Shalom H. Schwartz and is known as the Schwartz theory of basic
values. It identifies 10 such basic values:
Power
Achievement
Hedonism
Stimulation
Self-direction
Universalism
Benevolence
Tradition
Conformity
Security
Another important value analysis system, the Rokeach Value Survey, analyzes an individual’s values within a
framework of 18 “terminal values” and 18 “instrumental values.” Terminal values are those end goals that
people hope to reach in life, such as having a life that is comfortable and secure or reaching a place of self-
respect. Instrumental values are the modes of conduct that are considered appropriate and right, such as honesty,
integrity, and even ambition. Simply put, terminal values are the goals we want to reach, and instrumental
values are the proper ways to act in order to reach those goals.

Most theories assert that the creation of personal value systems is strongly influenced by early life experiences.
Those values tend to remain relatively stable, though they are certainly still influenced by the accumulation of
further experiences throughout life.

When we recognize and consider an individual’s personality and values, we can more clearly predict how that
person will behave. Though a word of caution should be added to remind us that behavior is influenced by
many factors and that every situation is unique, personality and values still remain helpful predictors.

Businesses (and individuals) use these attributes to identify the best fit for employees and potential future
employees. Will a certain candidate for a job be a good fit for that position? Do the requirements and
expectations of the position match both the person’s personality preferences and his or her value system? If not,
the likelihood for poor performance or poor attitude increase, as does the likelihood that the employee will
eventually leave the company in search of a better fit.

A wise business practice is to try to match individuals with the optimum role in light of their personality and
values. If a business identifies an employee to be high in openness, that person should try to find a role that
involves new and diverse activities rather than unchanging routine. Likewise, some roles are more suited for
introverts than extraverts. Placing individuals in the role where they are most likely to succeed will certainly
benefit the business as a result. The following table shows how individuals with certain values might excel in
particular roles.

TOPIC 2: Common Management Biases

Individuals are complex in their combinations of personality and values. It can be difficult to analyze and
identify the many features in an individual’s makeup. However, managers regularly attempt that task, and when
they seek to categorize their employees, it can sometimes lead to difficulties. A number of biases often skew a
manager’s perception.

Perception and Attribution

As we make observations, form opinions, and make judgments in the workplace—something every manager
must do—we rely significantly on our perception. This is the process through which we take in and process
information from our surroundings: what we see, hear, feel, etc. Though you might think that you can trust
information you take in with your own eyes and ears, you might be surprised sometimes to find out how that

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information can become distorted. Our feelings, emotions, desires, and values can lead us to perceive things
in a less than objective way. For example, studies have found that people who are afraid of spiders tend to
exaggerate their size.

Further, even when we do process sense-based information in an objective way, we often tend to engage in a
process called attribution, which means we look for the unseen cause behind what we see. For instance, if a
coworker is late to a meeting (the observable information), we might make an assumption about why he is late.
We might attribute it to the coworker’s poor character and lack of responsibility. In that case, we are making a
negative attribution to an internal cause. However, if we think well of the coworker, we might assume that
something unexpected and unavoidable delayed him. In that case, we are making an external attribution that
would reflect a positive view of the individual. In either case, the attribution is not based on an observable
cause, and we are going beyond the information provided to us by our senses.

Biases
Though we should strive to be as fair in judgment as possible, the reality is that we all have biases that affect
our judgments. Managers are certainly no exception to this rule, and a number of common biases affect how
they evaluate their employees. Some of the most common are stereotypes, selective perception, confirmation
bias, first impression bias, recency bias, spillover bias, ingroup bias, and similarity bias.

Stereotypes
A stereotype is a general opinion or assumption about a class of individuals who share a particular trait. We
often have general feelings or ideas about people based on their gender, ethnic background, or age. When we
form opinions or make judgments about people based on a preconceived image of people with that trait, we are
not being fair and objective.

Many people have negative feelings about people of different ethnicities than themselves and treat them in a
less positive manner than people like themselves. Women have also often been negatively affected by
stereotypes. The workplace is not an exception to that tendency. When managers make hiring decisions or give
performance reviews, for example, they are too often influenced by gender or ethnic considerations.

Age is another categorizing characteristic that is too often used in stereotypical ways. Suppose a manager is
looking for a new employee for his team. He believes that company loyalty and respect for authority is very
important in this new hiring decision. As he sorts through applications, the manager pays close attention to the
age of each applicant. He decides not to consider any applicants who are a part of the “Generation X” age
category because that
generation has a reputation for not being loyal and not having high respect for authority. This type of decision-
making process stereotypes people by age and does harm to applicants and the hiring organization both.
Applicants of that generation are not given fair consideration for the position, and the organization may well
miss out on the best applicant.

Stereotypes can also be made in such a way as to lead to favorable treatment of individuals. Though not all
studies agree, many have suggested, for example, that more attractive people tend to receive better grades in
school, have a higher likelihood of being hired for a job, and also earn more money on average. Also, some
professionals receive more respect and better treatment simply because they are older, the assumption perhaps
being that they are more experienced and thus better qualified.

Selective Perception and Confirmation Bias

Managers can also exhibit bias in their perception by unknowingly paying attention to only a portion of the
information available to them, which is known as selective perception. For example, perhaps a manager has a
keen interest in and enjoys talking about financial data. An employee owes the manager three reports, only one
of which is about finances. The employee turns in two well-prepared and helpful reports, but the financial report
is obviously rushed and incomplete. If the manager focuses his attention on the poor quality of the financial
report (simply because it is of special interest to him), ignoring the high quality of the other two, he is exhibiting
selective perception. Three examples of the employee’s work are in front of him, and he pays attention to only a
part of the evidence.

Selective perception often reinforces other types of biases. If a manager has a negative opinion of an individual,
he or she might be prone to pay more attention to negative behaviors or actions from that individual and ignore
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the positive actions that would contradict the opinion. When selective perception is employed to confirm
existing opinions, it is known as a confirmation bias.

First Impression Bias

Managers are also selective in many other ways, one of which involves giving too much prominence to their
first impression of an employee. In this situation, the initial judgments the manager makes about the employee,
often with very limited information, shape and control how he or she interprets and views future evidence.
Even when the future information would seem to contradict the initial picture, the manager might be unwilling
to change the perspective.

Recency Bias

The recency bias is somewhat of the opposite of the first impression bias. In this case, the manager’s focus is
unduly balanced in favor of an employee’s most recent activities. This often happens in the cases of annual
performance reviews. It can be difficult to keep an entire year’s activities in full view, and often the employee’s
most recent activities are over-weighted. If recent activities are negative, they can easily overshadow many
months’ worth of strong previous performance. Likewise, poor past performance might be mostly forgotten if
the employee has recently excelled.

Spillover Bias

Like the first impression bias, spillover bias can skew a manager’s perspective by paying too much
attention to past information. This bias usually relates to a prominent episode in the employee’s past
activities that comes to dominate the manager’s thoughts about that employee. Perhaps the employee played a
starring role in a wildly successful project, and the manager always thinks of the employee in terms of that
success, even if the employee consistently underperforms after that. Inversely, if the employee is unfortunate
enough to be guilty of a major failure or blunder, it might be difficult for him or her to change the manager’s
opinion in the future, even if the employee consistently provides excellent work thereafter.

Negativity Bias

The negativity bias is an unfortunately common characteristic of human nature. When we are presented with
information about a situation, some of which is positive and some of which is negative, we are prone to give
more attention to the negative information. Though it is not fair, the negative information predominates our
thoughts and moves us to form imbalanced conclusions on the negative side.

Ingroup Bias

The ingroup bias is basically a way in which managers might tend to show favoritism in judgment. Those who
have been fortunate enough to be accepted in the manager’s “in” circle receive special positive judgments,
while those not in that circle do not. The strength of this influence can vary dramatically, of course, and it may
or may not be true that an actual negative perspective is displayed toward those not in the group.

Similarity Bias

The similarity bias reflects the human tendency to focus on ourselves and prefer those who are like we are. It
leads managers to give special, positive attention and judgments to those who somehow remind the manager of
himself or herself. Perhaps the employee shares an interest with the manager, such as a hobby they have in
common, or maybe the manager and employee come from the same home area or attended the same college.
The manager might recognize similar personality traits in the employee, or the employee somehow reminds the
manager of a younger version of himself or herself. These identifications can lead to the manager giving
preferential treatment to the employee.

Consequences

Within the organizational environment, biases such as these are most often negative influences. Openly
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discussing the dangers of these biases can be a helpful step in identifying and removing or preventing them.

If such biases are present, they generally have a negative impact on employee attitude and behavior. At the very
least, employees can be forced to work extra hard to overcome the unfair biases. This can lead to resentment on
the part of those employees. More often, however, the employees find that they do not overcome those biases
and grow discouraged at the prospects of never being given a fair opportunity. Studies have shown that
employees who labor under negative biases tend to underperform as a result.

Also, even biases that might seem positive can actually have a negative impact. If a manager is prone to think
too positively about an employee, he might overlook significant faults and dangerous behaviors that need to be
addressed. These behaviors can lead to serious mistakes and problems for the organization that could have been
prevented with a more objective evaluation process. Also, if an employee realizes that he or she will be given
special, positive evaluations, this can lead him or her to give slightly less effort and demonstrate lower levels of
commitment to excellence. The employee might feel it unnecessary to provide the highest level of work
possible, knowing that he or she will still be given positive feedback and evaluation regardless.

TOPIC 3: Attitudes that Affect Job Performance

Introduction
When you think of how effective an employee is for an organization, a number of factors might come to mind:
intelligence, skill, training, and others. However, as important as these matters are, perhaps there is an even
greater and more influential factor: attitude. Even the most skilled and talented employee might be prone to
severe underperformance if his or her attitude in the workplace is lacking. On the other hand, employees whose
positive attitude of dedication and commitment leads them to high levels of effort often excel even when they
are not the most talented and skilled. Organizations have grown increasingly aware of the significance of this
matter and are investing more time and effort than ever to create the best attitude possible among their
employees.

Job Satisfaction and Organizational Commitment

Though the issue may be complex, it is widely recognized that employees who have a positive attitude are more
productive and useful to the organization. One of the primary factors in employee attitude is job satisfaction. If
employees enjoy their work, feel confident in their abilities to succeed in the tasks assigned, and appreciate the
role they are assigned, they are far more likely to have a positive attitude in the workplace.

A focus on optimizing job satisfaction will influence an organization’s priorities from the earliest stage in its
interaction with employees—even before they become employees. Specifically, the organization will be attuned
to the value of a good employee-to-job fit. When the organization is looking to hire someone to fill a role, it
might be tempted simply to hire the most generally talented or experienced applicant regardless of whether that
person’s interests and preferences match the potential role. An applicant who has excellent knowledge of the
industry but prefers to work in research and development should likely not be hired for a role in marketing.
Similarly, many excellent technicians are not interested or comfortable in management roles, and placing them
in those positions simply because they excel as a technician might be a disastrous choice. Even if they have the
skills to succeed, asking them to accept a role that they are not comfortable with or that they do not enjoy does
not provide the highest likelihood of success for the company or the employee himself.

The same principle of employee-to-job fit applies to existing employees as well. Careful management practices
will keep an eye on the changing developments of employee interests. As team members grow in their skills,
interests, and ambitions, it is good policy to provide avenues that enable those employees to pursue the course
that most excites them. This will encourage their highest levels of effort and commitment, keep their attitudes
positive, and thus make for greater productivity. Sometimes this means allowing employees to move
departments, or it could simply mean adjusting their responsibilities and focus within their current role. Of
course, it may not always be possible to cater to every preference of every employee—and trying to do so can
become a self-defeating proposition—but making a sincere commitment to this principle is likely to result in
positive outcomes for the organization.

The Society for Human Resource Management conducts an annual survey to gauge employee job satisfaction
and engagement. While the factors that most influence job satisfaction can change from year to year, employees

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consistently cite some factors as important to their job satisfaction. These include the following:

o Respectful treatment of all employees at all levels

o Compensation/pay
o Trust between employees and senior management
o Job security
o Opportunities to use their skills and abilities at work

Managers can use two general approaches to create organizational commitment among employees. First, they
can tie employee rewards directly to the success of the organization. This often happens in the form of monetary
compensation of some sort. Annual bonuses could be determined in part by the success that the company
enjoyed during the year, giving an obvious incentive for employees to seek the good of the company. Also,
studies have shown that when employees have a vested financial interest in the organization, such as in the form
of stock shares, they exhibit higher levels of commitment.

On a different level, many organizations also seek to develop organizational commitment by emphasizing and
seeking to align employee perspectives with the vision and values of the organization. If the company mission
resonates with the deep, personal values of employees, they are far more likely to commit to the organization.
Efforts can be made to shape the values of employees to conform them to those of the company, and highly
inspirational leaders are often successful in this. However, it can be difficult to change employees’ values, so
many organizations focus on the process of recruiting employees who already share company values.

Organizational Justice
In addition to job satisfaction and organizational commitment, another often-significant factor in employees’
attitude is the sense of organizational justice. Naturally, employees want a workplace characterized by fairness,
a place where everyone is treated with equal respect and given equal opportunities. If they feel otherwise, it is
almost certainly going to have a negative impact on their attitude over time.

Employees tend to focus especially on pay equality and advancement opportunity when evaluating
organizational justice. If they feel that their effort and production is not compensated appropriately, especially
as compared to that of their co-workers, it generally leads to dissatisfaction and disgruntlement. Divisions
between employees can arise, as well as between employees and their managers, creating an atmosphere of
tension and making productive teamwork a more difficult proposition.

The same holds true if employees feel that they are not given a fair opportunity for advancement. If it is
perceived that promotions are given to employees based on favoritism rather than as a fair reward for the
highest performance, employee attitude is likely to suffer as a result.

It is highly important to provide a fair workplace and promote a sense of organizational justice. This can be
rather difficult at times, however, because employees exhibit bias in their evaluations just as managers do. They
can be prone to think too highly of their own abilities and performance, which leads to a sense that they are not
receiving due appreciation and compensation. Still, a strong commitment to fairness can go a long way in
limiting the negative effects of such biases.

Employee Attitude Surveys

The importance of employee attitude has led to an increased use of employee attitude surveys. These surveys
are used to identify areas of concern that employees have. It is generally wise to keep the individual answers
confidential, and the use of online technology has made that easier than ever to do. This gives employees an
opportunity to share their concerns or criticisms with management without the fear of being punished for
voicing negative thoughts.

The leaders in an organization should want to hear those criticisms and be aware of the concerns employees
have. If there are problems, knowing about them provides an opportunity to address and fix them before they
grow out of hand and lead to serious problems. The sooner action is taken, the better. For this reason, many
organizations encourage regular communications about employee attitude.

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Employee attitude surveys are generally only beneficial, however, if the results of those surveys actually lead to
substantial action and change. For the short-term, employees may receive a sense of catharsis in being allowed
to vent their frustrations, but if nothing ends up changing in the long run, employees will simply become jaded
and disillusioned. They will not respect the attitude surveys, which may actually become an object of disdain.
TOPIC 3: Job Fitness and Performance

Person-environment fit is the degree to which a person’s personality, values, and other characteristics match
those of the company’s. A strong culture and shared values among coworkers can lead to a good fit. This can
translate to increased levels of trust and a shared sense of corporate community. For the organization, this
means reduced turnover, increased citizenship behaviors, and organizational commitment.

Person-job fit measures how a person’s knowledge, skills, abilities, and other characteristics match the job
demands. This is sometimes abbreviated as KSAO within the HR field. Someone who is conscientious and
prefers routine may be the right fit at a power plant, while someone who is innovative and proactive may do
well at a technology startup.

Consider the varied ideas in this chapter and your own experience with work, and you’ll see that this is a
complex topic. Attempts to measure person-environment fit or person-job fit have had mixed results. More
recent work suggests the relationships are not linear. For example, the performance of a misfit is not much
different than that of an average person. But the performance of a person who is a strong fit is much better than
an average person.

Organizations Have Their Own Culture

As you’ve learned in a previous module, every organization promotes and has a particular culture. That culture
may be healthy or unhealthy, but either way it has a strong influence on the performance and productivity of its
members. Organizations that actively embrace the concept of organizational culture have an opportunity to
intentionally shape that culture into a productive force.

Healthy Environment, Productive Employees

The benefits of a generally healthy culture and atmosphere within an organization are manifold and significant.
The basic idea is summarized in the concept that a healthy environment results in productive employees. An
unhealthy organizational culture leads to lower job satisfaction, worse attitudes, less productivity, increased
levels of absenteeism, higher rates of employee turnover, and many other undesirable results. An organization
can follow some strategies to promote a healthy work environment.

Managing Employee Stress Levels

Many of the negative results of an unhealthy environment are closely tied to high levels of stress, so many of
the specific considerations here have significant ties to stress levels. In many ways, stress levels can become a
helpful overall indicator of how healthy the organizational environment is. At the very least, high stress levels
should serve as a warning sign that things need to change.

The reality is that stress is a part of life. Attempting to remove all stress would not be realistic, and chances are
that it would not be healthy, either. An appropriate level of stress may actually be an essential part of a healthy
environment. Stress may be an inherent part of the opportunity to achieve difficult and worthwhile goals that
bring fulfilment. If there is no challenge or difficulty, there may be little to no satisfaction or sense of
achievement either.
One approach to dealing with stress in the workplace is to train employees to manage their stress. Programs and
resources for stress management can be helpful, but if stress levels are unreasonably high, organizations need to
do more than try to help employees manage stress. Instead, they need to focus on changing the basic system and
the forces in their organization that are causing those unhealthy levels of stress.

Work-Life Balance
One of the major issues that organizations and employees face is the difficulty in finding balance between work
and personal life. It is not possible to separate those two areas completely, as problems or stress in one area
strongly affect the other. Further, the two areas often compete with one another for individuals’ time, energy,
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and attention. This leads to conflict and stress, which in turn causes lower performance levels on the job.

Organizations realize that this is not a beneficial situation, and there are many things they can do to support the
right balance between work and life. One of the most obvious is to limit expectations to reasonable levels of
work commitment each week. Overloading employees and demanding an unreasonable portion of their time and
energy inevitably leads to difficulties. Along these same lines, providing ample vacation time has also been
identified as a wise policy that prevents employee burnout and increases productivity in the long run.

Interpersonal Relationships
Another major area of concern for a healthy work environment is the nature of the interpersonal relationships
employees have. Because members of an organization spend a lot of time together and must collaborate with
each other, often closely, how these relationships function is important.
On the negative side, interpersonal conflict can become a major obstacle to productivity. Being aware of such
situations and having plans for resolving tensions and disagreements are essential to the goal of maintaining a
healthy environment.

Ideally, the goal for interpersonal relationships is deeper than merely avoiding major conflict. If employees
develop strong relationships of friendship and respect, the organization is likely to reap the benefits. Employees
will work together better, enjoy their time together better, and be much less likely to want to leave the
organization. For this reason, some organizations invest in providing social opportunities to build those
relationships.

Health, Relaxation, and Entertainment

When considering how to create a healthy environment for employees, the whole person should be considered
in its various aspects. For example, one area of increasing focus for businesses is the physical health of their
employees. Organizations have realized that physically healthy employees are more productive. They have
more energy and miss fewer days for sickness and health care issues. Companies often offer health-related
incentives and create programs that promote physical well-being among their employees.

Personal and Professional Development

Another final area we will consider along these lines is that of personal and professional development. It makes
sense for businesses to invest time and resources into building and developing employee skills and strengths.
On a professional level, increasing employee skills and understanding strengthens the business. Many
companies will help fund employees’ education who want to pursue advanced degrees or certifications in their
field. Training seminars and programs can also be useful tools for professional development.

Though it might not seem to be as directly related to business goals, investing in the personal development of
employees also benefits the organization. This type of development could still be related to professional
functions, such as programs that help develop leadership skills or seminars that train employees in how to
manage interpersonal communication skills. These would have obvious practical value in most organizational
settings. Even if personal development programs do not have direct application to the workplace, helping
employees become well-rounded individuals and reach stability and fulfilment in their personal lives will
always provide a carryover benefit to the organization.

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Name : Subject: Intro To Management And Leadership
Year & Section: Instructor: CHENIE MAY R. SUMANDE

Task/Activity:

1. In your reading, you learned about person-environment fit and person-job fit. Do you think one of
these is more important than the other? If so, which one, and why? If you think they’re equally
important, explain your reasons.
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2. Review the biases covered in in this lesson (stereotypes, selective perception, confirmation bias, first
impression bias, recency bias, spillover bias, ingroup bias, and similarity bias). Have you ever
experienced bias toward yourself or others at work or school? Describe your experience. How do
you think managers can avoid bias in their treatment of employees?

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 LESSON 10 COMMUNICATION
AND MANAGEMENT

TOPICS
Communication and Management.
Typical Communication Flow
Barriers to Effective Communication
Channels of Business Communication.

LEARNING OUTCOMES
At the end of the lesson, you should be able to:

Describe the components of the communication process model.

Explain active listening.

TOPIC 1: Communication and Management

Communication and management are closely linked. Communication refers to the process by which
information is exchanged between two or more people (increasingly, machines are also included in
communication, but we limit the discussion here to communication between people). Each of the management
roles—planning, organizing, leading, and controlling— depends on effective communication. Managers must
be able to receive accurate information to determine plans, and they must be able to send accurate information
for the plans to be implemented. When information is accurately sent and received, everyone in an organization
can be informed. As we see in the earlier example, however, when information is misinterpreted or when
incorrect information spreads, communications can create significant problems in organizations.
The Role of Communication in Management

The role of management is to accomplish the goals of an organization. To do this, managers create a plan that
defines what needs to be done, when it will be done, and how it will be done. To implement the plan, managers
must convey this information to everyone in the organization. That is, they must communicate the plan to
members of the organization. However, managers need to do much more than just inform people what they
need to do to support the plan. They also must motivate people to support the plan, build commitment to the
organization, establish rapport and collaboration, and keep everyone informed of events and actions that affect
the organization. Good communication not only informs but also helps to create a culture that makes people feel
like they belong to and want to support the organization. The opening example shows what can result from
poor communication. Following are some of the benefits of effective communication.

a. Provides clarity. Confusion, uncertainty, and ambiguity make people uncomfortable and
uncooperative. Making roles, responsibilities, and relationships clear gives everyone the
information they need to do their jobs and to understand their contributions to the organization.
Effective communication reduces the cost associated with conflicts, misunderstandings, and
mistakes.

b. Builds Relationships. A culture that promotes open communication reduces tension between
hierarchical levels of employees, both professionally and socially. In a trusting and collaborative
culture, people are more likely to seek help with problems and to suggest solutions and
improvements. Effective communication creates a collegial culture that fosters teamwork and

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 encourages cooperation.
c. Creates commitment. Effective communication involves not only sending information but also
receiving it. By listening to employees’ concerns, allowing them to have input on their work and
their workplace, and giving consideration to their suggestions, managers can make everyone in
the organization feel like they are valued contributors. When employees feel like they are valued
in the organization, they will likely be more engaged and motivated. Effective communication
creates support and commitment.
d. Defines expectations. When people are uncertain about what is expected of them and how they
will be evaluated, they can’t do their jobs well. Performance reviews are difficult because the
employee does not know the performance standards they are expected to meet. And if corrective
measures are necessary, the employee may be resentful if he can’t see how his behaviors reduced
his effectiveness. When expectations and standards are clear, employees know what they need
to do to get a positive review and the benefits that come with it.

These are just a few of the many benefits that come from effective communications. Managers can only reach
organizational goals when the people in the organization are committed to the goals. People perform much
better when they are informed and involved.

The Communication-Process Model

The communication process may seem simple: one person sends a message and others receive it. The process
becomes more complex, however, because the information in the message must be sent and received
accurately. The communication-process model describes how the information is sent and received.

The communication-process model

It is easiest to understand the model when one person is communicating with another person. The person initiating the
communication, the sender, has information he wants the other person, the receiver, to know. However, before it can be
sent, the information has to be encoded into a form that can be transmitted. In a simple case, the information is put into
words spoken to the receiver. Or the information may be converted into printed text, tables, charts, or graphs given to the
receiver. In a more complicated case, the information is encoded into words or images that are then converted into
electronic signals sent to the receiver. The channel is the medium through which the information is conveyed.
It could be air conveying sound waves, paper conveying text and images, or wires or magnetic fields
conveying electronic signals. (We
discuss channels in more detail later in this module.) In the opening example, the management had information
that Mathias had been hired and when he would start. They wanted the employees in the company to have that
information so they put it in a message and sent it to employees.
The receiver reverses the process. She receives the encoded message and then decodes it. That means she
converts the message back into information that can be understood. In the opening example, an employee reads
the message and knows who has been hired and when he will start. Information has been transferred from
managers to employees. In an interactive communication process, the receiver can send feedback to the sender
to indicate that the message has been received and how it has been interpreted. This can start an interactive
back- and-forth exchange that can assure the sender that the message has been received and understood
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correctly.

The two-person model can be generalized to the case of one person communicating with many others. It could
be a person making a presentation to a roomful of people, a manager sending an e-mail to employees, a
Facebook post to friends, or a tweet to hundreds of followers.
The following video provides a helpful overview of the communication process and some of the barriers that
can arise during communication:

Common Missteps in Communication

Each step in the communication-process model introduces the potential for missteps to occur. In the opening
scenario, two e-mail messages were described. They were both internal to the company, but they achieved much
different results. What was different about the messages that caused the different outcomes?

The first misstep can occur when the information to be communicated is not encoded correctly. Consider the e-
mail sent by management to announce Mathias’s appointment. Management had clear information to convey,
and a simple e-mail conveyed it.

Mathias’s e-mail had a different purpose. He wanted to convey to his superiors that he was following their
directions and was working on a plan to cut costs. But when he put the information into text, he didn’t encode it
well. He wanted to convey that he was working on the problem but had not made any decisions. What he
actually conveyed was that he was going to cut costs by whatever means necessary and soon. Because the
information was not encoded accurately, the wrong information was sent.

The first step in good communications is being able to clearly and concisely convey information, whether
written, spoken, graphic, or numerical. If information is not encoded properly, nothing else matters. Later on we
will look at specific suggestions for how to tailor messages to take the needs of the receivers into consideration

Missteps also occur during decoding when the receiver interprets the message differently than the sender
intended. In Mathias’s case, the message he sent was “I’m thinking about ways to cut costs and I will let you
know when I have a plan.” But employees interpreted the message as “I’m going to do whatever I have to in
order to cut costs.”

Because feedback is a message sent in the opposite direction, from the receiver to the sender, all of these
problems can occur during feedback. In many cases feedback is not important and is not wanted. Much
information that is communicated is intended to keep people informed, and acknowledgement or response is not
expected. When management sent the notice about Mathias’s appointment it did not expect every employee to
respond. Sometimes, though, feedback is important to be certain that both the sender and receiver have the
same information and interpret it the same way. The initial sender must be sure that she understands the
feedback provided by the sender, asks questions to clarify any misinterpretation, and responds to any questions.
The last step in good communication is to be a good listener. In the following sections we will look more
closely at the issues of miscommunication and ways to collect feedback.

Formal and Informal Communication Systems

In most organizations there are both formal and informal information systems. Formal communication
systems are the methods used to convey information necessary for conducting the business of the organization.
Formal communications conform to rules and regulations prescribed by the profession or law (for example,
formal reporting procedures for tracking injuries in the workplace). This is information that flows within the
chain of command or within task responsibilities. The message may be procedures to provide regular progress
reports to managers. It may be scheduled meetings to exchange information on the status of a project. Human
resources may arrange seminars to convey new policies and procedures. The formal communication system
makes sure necessary information flows through the organization and that dissemination of this information is
controlled. Not everyone in an organization has access to progress reports or attends project meetings. Formal
communication systems ensure that information is available to those who need it and not to others.

Not all communication in an organization is formal, and not all communication is controlled. Informal
communication systems are outside of the formal system. Informal systems can connect almost anyone in
an organization to anyone else. They skip over hierarchical levels and between departments and functions.
In the opening scenario we saw how misinformation spread through the informal system can harm an
organization. However, informal communication systems are not necessarily disruptive. In many
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organizations, the informal network is the primary way information is spread and work gets done. There are
some organizations where getting a job done depends more on who you know than what you know. There are
two main types of informal communication systems: social networks and the grapevine.

A social network is a system of personal relationships that cross hierarchical, departmental, and organizational
boundaries. A simple social network system is shown in the following diagram.In a social network, an
individual can reach out to anyone else in his network for information or assistance. Through the linking
member, he can also seek help from another group. People with large social networks have access to much
information, and linking
individuals can spread information through an organization. Linking individuals can be very influential in an
organization.

The grapevine is how gossip is spread through an organization. Another term for a grapevine is a rumor mill.
Almost everyone engages in gossip in some manner, so it is a very effective way of spreading information. In
fact, information often spreads faster through the grapevine than through formal information channels.
Unfortunately, the information is not controlled, and it can be distorted or even totally fabricated. The grapevine
is particularly important when formal communications are inadequate. People don’t like to be uncertain about
conditions that affect them. When information is not provided by the formal system, they seek and spread
information through the grapevine.

Unlike a social network, a grapevine is unstructured and transitory, although the grapevine can follow social
network links. Information flows in the grapevine through chance encounters, informal meetings, and overheard
conversations. Electronic communication and social media has greatly increased the speed and spread of
grapevines.

TOPIC 2: Typical Communication Flows

Information can flow in four directions in an organization: downward, upward, horizontally, and diagonally.
The size, nature, and structure of the organization dictate which direction most of the information flows. In
more established and traditional organizations, much of the communication flows in a vertical—downward and
upward—direction.

Downward Communication Flows

Downward communication is when company leaders and managers share information with lower-level
employees. Unless requested as part of the message, the senders don’t usually expect (or particularly want) to
get a response. An example may be an announcement of a new CEO or notice of a merger with a former
competitor. Other forms of high-level downward communications include speeches, blogs, podcasts, and
videos. The most common types of downward communication are everyday directives of department managers
or line managers to employees. These can even be in the form of instruction manuals or company handbooks.
Downward communication delivers information that helps to update the workforce about key organizational
changes, new goals, or strategies; provide performance feedback at the organizational level; coordinate
initiatives; present an official policy (public relations); or improve worker morale or consumer relations.

Upward Communication Flows

Information moving from lower-level employees to high-level employees is upward communication, as when
workers report to a supervisor or team leaders report to a department manager. Items typically communicated
upward include progress reports, proposals for projects, budget estimates, grievances and complaints,
suggestions for improvements, and schedule concerns. Sometimes a downward communication prompts an
upward response, such as when a manager asks for a recommendation for a replacement part or an estimate of
when a project will be completed.

An important goal of many managers today is to encourage spontaneous or voluntary upward communication
from employees without the need to ask first. Some companies go so far as to organize contests and provide
prizes for the most innovative and creative solutions and suggestions. Before employees feel comfortable
making these kinds of suggestions, however, they must trust that management will recognize their contributions
and not unintentionally undermine or ignore their efforts. Some organizations have even installed
“whistleblower” hotlines that will let employees report dangerous, unethical, or illegal activities anonymously
to avoid possible retaliation by higher-ups in the company.
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Horizontal and Diagonal Communication Flows
Horizontal communication involves the exchange of information across departments at the same level in an
organization. The purpose of most horizontal communication is to request support or coordinate activities.
People at the same level in the organization can work together to work on problems or issues in an informal and
as-needed basis. The manager of the production department can work with the purchasing manager to accelerate
or delay the shipment of materials. The finance manager and inventory managers can be looped in so that the
organization can achieve the maximum benefit from the coordination. Communications between two
employees who report to the same manager is also an example of horizontal communication. Some problems
with horizontal communication can arise if one manager is unwilling or unmotivated to share information, or
sees efforts to work communally as threatening his position (territorial behavior). In a case like that, the
manager at the next level up will need to communicate downward to reinforce the company’s values of
cooperation.

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Diagonal communication is cross-functional communication between employees at different levels of the
organization. For example, if the vice president of sales sends an e-mail to the vice president of manufacturing
asking when a product will be available for shipping, this is an example of horizontal communication. But if a
sales representative e-mails the vice president of marketing, then diagonal communication has occurred.
Whenever communication goes from one department to another department, the sender’s manager should be
made part of the loop. A manager may be put in an embarrassing position and appear incompetent if he isn’t
aware of everything happening in his department. Trust may be lost and careers damaged by not paying
attention to key communication protocols.

Diagonal communication is becoming more common in organizations with a flattened, matrix, or product-
based structure. Advantages include:
 Building relationships between senior-level and lower-level employees from different parts of the
organization.
 Encouraging an informal flow of information in the organization.
 Reducing the chance of a message being distorted by going through additional filters.
 Reducing the workloads of senior-level managers.

External Communication Flows

Communications do not start and stop within the organization. External communication focuses on audiences
outside of the organization. Senior management—with the help of specialized departments such as public
relations or legal—almost always controls communications that relate to the public image or may affect its
financial situation. First-level and middle-level management generally handle operational business
communications such as purchasing, hiring, and marketing. When communicating outside the organization
(regardless of the level), it is important for employees to behave professionally and not to make commitments
outside of their scope of authority.

Common sources of noise are explained in this section. How many of these examples can you remember
affecting your conversations with friends, classmates, or co-workers?

TOPIC 3: Barriers to Effective Communication

Physical Conditions
Sometimes “noise” is just exactly that—loud or distracting sounds that make it impossible to hear or
concentrate. Or the general level of background noise can be so intense that it is hard to focus for long on one
particular voice. A room may be so hot or so cold that people can’t get comfortable and cannot pay attention.
Outside activities may be a distraction to those with a view out windows. Finally, it may be lunchtime or too
close to quitting time to keep people focused. Fortunately, with some awareness and advance planning, physical
barriers to effective communication are some of the easiest to overcome.

Filtering
Personal and particular experiences color how people view the world and how they communicate. A message
sender sees the world through one set of filters (experiences and values) and the receiver sees it through a
different set of filters. Each message has to pass, therefore, through at least two sets of filters. The more similar
people are in lifestyle, experience, culture, and language, the more similar their mental filters are likely to be
and the less distortion should occur. This is why people who come from very different social and economic
situations than their audience must work extra hard to say exactly what they mean to avoid confusion. Also, the
fewer people involved in the transmission of a message, the greater the chance that it will be received as the
sender intended.

In business, however, messages may be summarized by a manager and relayed through an administrative
assistant who has clarified or edited the message. Messages exposed to many filters should be repeated in
various ways to make sure they were understood as the sender intended.

Selective Perception
Selective perception is the tendency to either “under notice” or “over focus on” stimuli that cause emotional
discomfort or contradict prior beliefs. For instance, some people live purposefully healthy lifestyles by
frequently exercising and eating only nutritious food but still smoke cigarettes. Psychologists believe that they
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are selectively ignoring the evidence that smoking is dangerous to their health. They have chosen to disregard
the information that would make them feel guilty or fearful about this habit. This is called perceptual defense.
Selective perception can also be vigilant, meaning people are extra sensitive to things that are significant to
them. If a manager doesn’t like a particular employee, for example, she may be super critical of that person’s
behavior and notice every time he is a minute late to a meeting. On the other hand, a favorite employee coming
late to work one morning might elicit concern that she had car trouble. Selective perception introduces bias into
the communication process.

Information Overload
We have all been in situations when we felt that too much information was coming at us. When this happens,
we feel overwhelmed and fear that we will not be able to retain any information at all. Sometimes it is not just
the quantity of communication but the level that causes overload. If the message contains information that is
new to the receiver, including processes or concepts that are not familiar, then the chances of overload increase
greatly. The sender should break up the message into more palatable or digestible bits and reduce the amount of
information that has to be absorbed at any one time. One technique is to make a high-level announcement and
then follow it up later with more details. The sender has the primary responsibility to check that the receiver has
understood the message. This means that a manager may have to adjust a message to reflect the various
experiences of the employees. A new employee may need repeated explanations before beginning an operation,
whereas an experienced employee may start rolling his eyes at the same old instructions.

Semantics
Semantics is the study of the meaning of words and phrases. You might hear one person say to another “Let’s
not argue semantics,” meaning he doesn’t want to get caught up in trivial and unimportant details or playing
with words. But semantics is extremely important in effective communication. There are some semantic rules in
English that may trip up non-native English speakers, such as the concept of subject-verb agreement and
gender pronouns. These can cause confusion, as seen in the following examples:
Six man is coming to the meeting on Tuesday. (How many men are coming?)
Rachel is going to introduce the speaker at the conference. He may be asking you for information about her to
make the job easier. (Who is asking for information, Rachel or the speaker?)
When your audience involves people whose native language is not English or individuals of different
educational backgrounds, messages need to be direct and clearly stated to help ensure they are understood.

Denotation and Connotation

Confusion can also arise from the use of language by people from different educational levels, culture, and
dialect. For instance, the terms lift and braces denote two entirely different meanings in the United States and
in England. A Londoner might reasonably ask her partner if he was planning on wearing braces with his pants.

Some words have a connotation for one group of people that is not shared by another. “That’s sick!” could be a
compliment or an insult, depending upon the listener. (You probably already know that slang does not belong in
written business communications.) Fortunately for all of us, paying attention to the context of the message
often reduces confusion. The meaning of homophones (buy, by, bye; meet, meat, mete; pair, pare, pear) and
homographs (read, read; lead, lead) are often easily understood by their context or pronunciation.

Emotional Disconnects
Almost the first thing parents learns is never to try to have a rational discussion with a screaming toddler or an
angry teenager. If they wait until the young person is more receptive to what they have to say, the odds of a
successful conversation improve dramatically. Adults also experience emotional disconnects that affect the
chance of successful communication. For example, when a person is feeling stressed or anxious, an expressed
concern is more likely to be interpreted as criticism. Constructive criticism made while an employee is
emotionally fragile may be perceived as a personal attack. If possible, it is better to postpone a communication
if there is a strong likelihood that the intended receiver will misinterpret it because of his emotional state.

Credibility

In communication, the validity of the message is tied to the

reputation of the sender. If the receiver doesn’t trust the
sender, he will view the message itself with skepticism or
suspicion. If the sender is trustworthy, the receiver will likely
believe the message despite her personal opinions about that

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subject. In other words, the trustworthiness of a communication, regardless of format, is heavily
influenced by the perceived credibility of the source of that communication.

Source credibility describes the sender’s positive characteristics that affect the receiver’s acceptance of a
message. A manager’s source credibility is based on experience, knowledge, and interpersonal skills. Managers
who deal openly and candidly with employees will find it easier to solicit the kind of feedback that tells them
whether their message has been understood.
Message Sent—But Was It Received?
After delivering a message, how does the sender know if the receiver got the message that was intended? Is it
the job of the sender or receiver to make sure that the communication has been understood? The answer is that
both ends of the communication chain have some responsibility to verify what was both said and heard. In the
workplace, however, the manager has the primary responsibility because a main part of her role is to gather and
disperse information so organizational goals can be achieved. Managers need to have strategic conversations by
asking questions and collecting feedback. One technique to gather feedback is active listening.

Active listening is a communication technique that has been around for many years and that has been used
successfully in all types of endeavor—not just business. Parenting classes, marital relationships, public schools,
counseling, and tutoring are just some of the areas where active listening is a valued skill. As the name
implies, the focus of active listening as a tool for improving communication is on listening rather than talking.
(Think here of the expression “You have two ears and one mouth for a reason.”) It is a process where the
listener sets aside his own thoughts to concentrate more clearly what the speaker is actually saying instead of
what the listener thinks the speaker is saying.

It takes practice to master the basic techniques of active listening, and you will probably feel awkward applying
the technique in the beginning. But because the point is to increase effectiveness by decreasing the possibility of
misunderstandings, it is worth a little discomfort. The basic method is briefly summarized in these steps:
Look at the speaker and make eye contact to indicate that the speaker has your undivided attention.

Note the body language of the speaker to help process the speaker’s message. Is the speaker angry, frustrated,
frightened, rebellious, or tentative? Classic signs of anger include arms folded tightly in front of the body or
held rigidly at the side. Fright or guilt may be shown by the refusal to look at you directly in the eyes or
continually shifting gaze away from the listener’s face. The speaker may be feeling confrontational if his arms
are on his hips and his legs are spread apart as if ready to move. If the speaker is constantly turning away from
you, she may be hiding something and definitely wants to leave. If any of these signs are present, it is
probably better to finish the conversation at a later time.

Don’t allow yourself to prepare a response before the speaker has finished his remarks. Keep your mind open
and free of judgment until the end.
Ask questions to verify or confirm what you heard the speaker say. You might even ask a question or make a
statement using the very same words as the speaker. “I heard you say that you were unhappy with the way John
is managing the team.” Or “You said that you feel left out of the decision-making process for the project.”

Wait for the speaker to confirm or to correct your understanding of his message. He may respond with
something like “Well, unhappy is too strong a word. I meant that there are times when I disagree with the
decisions that John makes.” Then you can respond, “OK. You are not completely unhappy. You don’t always
disagree with John.” Here you are confirming your understanding of the speaker’s corrected statement.

The other major advantage of active listening (besides preventing misunderstandings) is that you convey to the
speakers that you care about them and their opinions. They become empowered to be more proactive because
they believe they will get an unbiased hearing. For busy managers, actively listening can be time-consuming
and require emotional investment. You really have to interrupt your work to stop and listen. The speaker may
become emotional during the attempt to clarify the communication, especially while you are learning the
approach. But in the end, you will have earned the trust and respect of an employee, and that is a worthwhile
goal. The answer to what signs in the photo above indicate good communication are as follows:

1. well-lit room
2. comfortable but upright seating
3. listener making eye contact

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 4. one man leaning forward to show interest
5. noiseless background

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Name : Subject: Intro To Management And Leadership
Year & Section: Instructor: CHENIE MAY R. SUMANDE

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1. Review the biases covered in in this lesson (stereotypes, selective perception, confirmation bias, first
impression bias, recency bias, spillover bias, ingroup bias, and similarity bias). Have you ever
experienced bias toward yourself or others at work or school? Describe your experience. How do
you think managers can avoid bias in their treatment of employees?

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