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KIN 464: EXAM 2
A problem exists when objectives /goals are
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not met
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Problem solving is the process of taking corrective action to meet
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objectives/ goals
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Decision Making is
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the process of selecting a course of action that will solve a problem.
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Autonomy to make decisions depends on
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1.Individual’s level of authority
2.Nature and tradition of the organization
3.Personalities of bosses, peers and employees
4.Expectations or pressures placed on the manager
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Every decision should be based on what is
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good for the organization
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Most difficult decisions involve conflicts between manager’s
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own desires and what is best for the organization
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Programmed Decisions
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repetitive & routine/ a decision influenced by some traditional habit or practice, a defined rule or set procedure, or policy/guidelines.
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Programmed Decisions guidelines
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When to pay overtime
How to purchase supplies
Determining employee holidays
Who drives organization vehicles
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The programmed decisions helps
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to deal with exceptions
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Non Programmed Decisions
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apply to unusual problems or situations that are unique or have never occurred previously and often incorporate risk.
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Examples of non programmed decisions are:
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How to overcome low employee morale
Improving the organization’s image
Gaining support of higher administration
Hiring new employees
Storm damage to facilities
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The dynamics of the environment dictate that varying degrees of
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uncertainty that accompany decision-making.
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Certainty
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Manager knows exactly what will happen when a decision is made because he/she has accurate, factual information. The outcome is known in advance.
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Risk
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a condition under which a manager can predict with reasonable accuracy future occurrences and assign relative probabilities to them = increased risk and greater uncertainty in decision-making.
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Examples of risks:
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Predicting the weather
Life expectancy
Normal Employee attrition
Risk of injuries
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Uncertainty
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the manager has little or no information for making decision. There is no accurate or totally reliable way to calculate objectively the probabilities = greatest risk and largest degree of uncertainty in decision-making.
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Examples of uncertainty:
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Employee resignations
Acceptance of new athletic equipment
Starting a new business – outsourcing
Predicting demand for programs
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Rational problem solving and decision-making requires:
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1.Utilizing a structured methodology.
2. Goal of rational decision-making is to optimize.
3.Applying creativity to the problem solving / decision making process.
4.Identify key leadership skills required for collaborative problem solving.
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Seven Steps in Rational Decision-making Approach (Structure)
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Step 1: Clearly identify the problem (not the symptom).
Step 2: List all the facts??? pertinent to the problem
Step 3: List alternative courses of action to solve the problem
Step 4: List advantages and disadvantages of each alternative
Step 5: Review all of the above
Step 6: Draw conclusions, make recommendations and/or decisions
Step 7: Take action to solve problem. Follow-up after the decision has been implemented to ascertain if the desired results have been achieved
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Rational decision-making is generally considered superior to intuitive approach in most situations, but
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it has limitations
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Limitations of Rational
Decision Making:
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Decision-makers are not always objective
Often do not have all the facts
Can be easily influenced by emotions or prejudices
May not consider all available alternatives
May not evaluate available information properly
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The principle of bounded rationality, developed by Nobel Prize Scholar Herbert A. Simon recognizes that decisions
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are not always made rationally and logically.
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The principle of bounded rationality states
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“The capacity of the human mind for formulating and solving complex problems is very small compared with the size of the problems whose solutions are required for objectively rational behavior or even for a reasonable approximation to such objective rationality.”
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Simon suggests that people do not exhaustively search for the optimum alternative (optimizing)
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but instead select the first alternative that meets some minimum standard of satisfaction. This is called satisficing.
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Satisficing
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instead of searching for the optimum solution, people will select the first alternative that meets some minimum standard of satisfaction for all parties involved.
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Optimizing
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selecting the best possible alternative in light of all known facts, considerations and options. This is a more ideal approach.
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Determining factor in which rational decision-making approach is used
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= time to gather information, formulate alternatives and decide
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Creative Problem Solving & Decision Making
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Age Creativity
5 98%
7 68%
12> 24%
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Make it a practice to keep on the lookout for novel and interesting ideas that others have used successfully. Your idea has to be
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original only in its adaptation to the problem you are working on” Thomas Edison
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Leadership plays a critical role in
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either facilitating or inhibiting creativity
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Leaders either
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Support novel solutions and risk-taking, or…
Form an unsupportive atmosphere where people are unwilling to take risks.
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Group Decision-Making:
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A Participative Management Approach
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Advantages of group decision making:
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Pooling of thoughts, experiences and ideas of many
More information, more alternatives, and heightened creativity and innovation
Better understanding of the problem and decision – makes implementation easier.
Greater commitment to the decision.
Improved morale and motivation.
Good training
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Disadvantages of group decision making:
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Can be time consuming and the group decision nearly always is based on compromise.
Conformity and groupthink
Group can be dominated by one member
Members may not be qualified to deal with the current problem
Personalities of members may clash
Time constraints
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The three best known techniques to stimulate group creativity are:
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Brainstorming
Synectics
Nominal Group Process
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Brainstorming
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A method to generate many ideas in a short period of time.
Usually a small group of people are presented with a problem, and asked to recommend solutions.
The purpose is to generate a large quantity of ideas, from which, one or two may be acceptable.
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Synectics
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Similar to brainstorming, with a leader to encourage the group to be more creative.
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Nominal Group Process
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Each group member works alone to prepare a list of ideas or possible solutions to the problem.
Each member then presents his/her solutions to the group.
The group vote privately on each other’s ideas and rank order the solutions.
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Strategic Management
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The process of managerial decision making and implementation of plans that directly affect the quality of performance and survival of an organization in the long term
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Strategic Management consists of
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Long Term Planning
Strategy Formulation
Strategy Implementation
Managerial Decision Making
Monitoring and Controlling Implemented Plans
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Long Term Planning
(also called long-range or strategic planning)
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Focuses on achieving goals/objectives for 3-20 years
Directly affects survival of an organization
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Strategic planning involves an organization’s most basic and important choices – choice of its
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Mission
Objectives
Strategy
Polices
Programs
Goals
Major Resource Allocations
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Different definition of: Strategic planning comprises the
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process of setting common purposes, goals, and objectives for the enterprise, breaking them up into specific plans and policies for the operating level and securing the necessary resources to put them into action.
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Different definition of: Strategic planning is the
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‘management of change.’ It is a decision-making process based on empirical evidence and analytical studies, that provides the basic direction and focus of the enterprise.
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Strategic Planning
Definition
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The process of determining an organization’s long-term goals and objectives in compliance with it’s mission and formulating the proper plan of action, (strategy), policies to insure sound decisions for using internal resources and environmental factors that affects all effort to achieve the desired end results in the long run.
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Objectives of Strategic Planning
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Increase the odds for a firm’s long term survival.
Increase the probability that the firm will more nearly reach its stated objectives.
Increase the possibility of operating more efficiently and effectively.
Provide a plan for harmonizing the activities of all elements within the organization toward fulfilling its stated mission.
Provide a long-run planning framework within which short-run plans fit and can be used to move the plan toward realization.
Coordinate short and long term plans to achieve final goal.
Become the model for continued organizational growth and expansion.
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The Strategic Planning Process
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1)Define the goals and mission of the organization
2)Identify the long-term objectives
3)Review the existing strategy to achieve these goals
4)Evaluate current environmental factors
5)Inventory the organization’s resources
6)Identify strategic strengths and weaknesses of the organization through SWOT analysis
7)Compare current strategy with current information
8)Formulate new strategy if needed
9)Develop policies, procedures, and programs to accompany new strategy
10)Implement and control the strategy
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The Strategic Planning Process: 1. Define Goals & Mission of the Organization
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Goals provide sense of direction – what do we want to achieve?
Goals should be based on mission and uniqueness “edge” of the organization.
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The Strategic Planning Process: 2. Identify Long Term Objectives
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Purpose of strategic planning is to identify and formulate long term objectives.
Major influence is organization’s mission.
More specific than goals and more easily quantified.
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The Strategic Planning Process: 3. Review Existing Strategy
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Answer the questions:
What are the current objectives?
What plans have been implemented to achieve these objectives?
Is the current strategy compatible with existing resources, environmental factors, and current objectives?
Do the end results meet the original objectives?
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The Strategic Planning Process: 4. Evaluate Current Environmental Factors
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Evaluate external factors that can affect management’s plans - Environmental Analysis
Managers must be aware of changes in political, social, technological and economic areas to form sound strategy
Smell the Cheese “Who Moved my Cheese”
What are the “Opportunities?
What are the Threats?
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The Strategic Planning Process: 5. Inventory Organization’s Resources
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Inventory resources:
People
*skills, abilities
Space (land locked or room for growth?)
Facilities, plant, equipment
Finance
Technology (technical knowhow)
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The Strategic Planning Process: 6. Identify Strategic Strengths & Weaknesses of the Organization
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Evaluate:
–internal Strengths & Weaknesses
–external Opportunities & Threats
•SWOT Analysis
•What are our strengths (competitive advantages)?
–From “Good to Great” – Hedgehog Concept
–What are we deeply passionate about?
What are our weaknesses? (competitive disadvantages)?
Strengths should be used to develop future strategy
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The Strategic Planning Process: 7. Compare Current Strategy Against Current Information
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Indicates whether strategy is adequate or needs modification (gap analysis)
Answers questions:
–Are the objectives still the same?
–Is there new information available?
–Are we well-informed about the competitors’ strategies?
–Is current performance leading to desired results?
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The Strategic Planning Process: 8. Formulate New Strategy
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If a new strategy is needed, review alternatives and set new strategy
Maximize organization’s strengths
Minimize organization’s weaknesses
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A new strategy should include:
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1)Internal consistency
•Compatible with polices and goals
2)Consistency with environment
•Social, culture, legal, political
3)Appropriateness in light of available resources
•Do we have the right and enough resources?
•Think about the rec example he talked about
4)Satisfactory degree of risk
•Is the strategy too risky?
5)Appropriate time horizon
6)Workability
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The Strategic Planning Process: 9. Develop Policies, Procedures, and Programs to Accompany New Strategy
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•A Program is a statement of activities that need to be implemented to accomplish a plan – the action-oriented part of strategy
•Procedures are a series of steps or tasks in a logical order which detail how specific results are to be obtained – parts of a program
•Policies are general guidelines to influence the behavior of all personnel leaving room for flexibility and interpretation by management
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A Program is a
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statement of activities that need to be implemented to accomplish a plan – the action-oriented part of strategy
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Procedures are a
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series of steps or tasks in a logical order which detail how specific results are to be obtained – parts of a program
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Policies are
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general guidelines to influence the behavior of all personnel leaving room for flexibility and interpretation by management
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The Strategic Planning Process: 10. Implement and Control
the Strategy
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•Control: function of measuring actual performance against the expected results or the desired standard
•Is the new strategic plan working?
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Definition of Organizing
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The process of delegating and coordinating tasks and resources to achieve objectives.
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Definition of Formal Organization
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A group of people working together toward common objectives with clear lines of authority, responsibility, accountability and communication (a hierarchy)
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The Benefits of Organizing
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1. Generates effective group action
2. Synergizes resources
3. Pinpoints individual responsibilities
4. Facilitates the functions of implementing and control
5. People perform best
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People perform best when:
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The skills and knowledge are a good fit for their job
The working conditions and environment are pleasant
People have a clear understanding of their duties and responsibilities
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An organizational structure is the
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framework that outlines how tasks are divided, grouped and coordinated within an organization.
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An organizational structure provides a roadmap for how positions within
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an organization are related and what tasks are performed by individuals and work teams within an organization.
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Finding the right structure for an organization involves balancing requirements to
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formalize procedures whilst fostering innovation and creativity.
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Organizational Structure provides
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clear reporting and communication lines while trying to reduce unnecessary and costly layers of management.
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When designing an organization’s structure, managers need to consider the following questions:
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Whom should individuals/departments report to?
How many individuals should report to each manager?
How should we subdivide work?
At what level should decisions be made?
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Departmentalization
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The bringing together of individuals into groups so that common or related tasks can be coordinated.
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Organizations can departmentalize on the basis of:
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Functions (e.g. marketing, compliance)
Products or Services (e.g. football apparel, basketball apparel)
Processes (e.g. what do we produce or service?)
Geography (e.g. inner / outer rims)
Customer Type (e.g. individual athletes or teams)
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Work Specialization (Division of Labor)
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Creating roles for individuals that enable them to specialize in performing a limited number of tasks. Jobs are organized by specialty (e.g. marketing, event management).
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The advantage of breaking jobs down to a set routine of repetitive tasks is an
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increase in employee productivity and reduced costs through the use of lower-skilled labor force.
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Chain of Command (Scalar principle)
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Authority in the formal organization flows one link at a time from the highest level to the lowest level
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Unity of Command
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No employee should report to more than one immediate superior (boss)
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Unity of Direction
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Means that all activities are directed toward the same objectives – e.g. finishing the project, hosting the event, winning the game.
When a team doesn’t pull together, it often fails to finish the project or loses the game.
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Coordination
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is about people working together across departments./ is the process of integrating tasks and resources to meet objectives.
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Span of Control
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Refers to the number of staff that any manger can directly supervise without becoming inefficient or ineffective.
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Graicunas’ Theorem
(also called the principle of increasing organizational relationships)
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States that as you add people to an organization arithmetically (1,2,3, etc.) the number of organizational relationships increase geometrically (at a much faster rate).
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·The exact number that any manager can effectively supervise is determined by:
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The level of skill, expertise or experience of the manager and his/her staff.
The complexity of the tasks / type of work.
The location of the staff.
The degree to which the tasks are standardized.
The style of the manager.
The culture of the organization.
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Parity theory (Responsibility = Authority)
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States that authority and responsibility must be equal or coincide
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Authority refers to the right of
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·managers to use resources, make decisions, issue orders to other members and expect that the orders will be carried out.
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The level and scope of a manager’s authority
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should be commensurate with his/her responsibility.
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Centralization is
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“the hierarchical level that has authority to make a decision”
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Several factors affect whether decisions are centralized or decentralized:
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The cost
The timing
The Qualification of the employees
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Line Structure
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built around activities essential to the attainment of the primary objectives of the organization
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As organizations grow in size and complexity,
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staff positions and departments evolve, which relate indirectly to the primary purpose of an organization
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Line and Staff Structure
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straight line activities accompanied by creation of staff specialists to support work of line managers
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How to organize group effort:
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Dividing Work
Grouping Tasks
Activating Authority and Responsibility
Determining Spans of Management
Coordinating Organizational Resources
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Charts show pictures of the formal
organizational structure:
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1.Positions of responsibility
2.Lines of authority
3.Superior-subordinate relationships
4.Formal communication channels
5.Lines of Accountability (report ability)
6.Grouping of related work activities
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Steps in Chart Construction
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1.Clearly define primary objective
2.List all jobs by title and function
3.Identify whether each job is line or staff
4.Group jobs with similar work activity together
5.Logically draw the chart
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Neoclassical Theory
of Organizing
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Designed to offset shortcomings of classical theory of organizational structure by expanding into the behavioral sciences.
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Neoclassical Theory
of Organizing places emphasis on:
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the importance of individual behavior
the impact of the informal organization on the work place social and cultural system
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Neoclassical Theory
of Organizing
Culture manifests itself in different ways throughout organizations:
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Stories
Myths
Symbols
Language (narratives)
Ceremonies
Rites
Physical Settings
Artifacts
Values
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Neoclassical Theory recognizes these and stresses:
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Motivation
Coordination / Cooperation
Leadership
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Modern Organization Theory
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Studies the organization as a system of interdependent variables of strategic parts
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Modern Organization Theorists consider the organization to be a system of the following strategic parts:
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1.The individual
2.The formal structure
3.The informal organization
4.Status and role patterns
5.The physical environment of work
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