Max Weber was a proponent of nepotism in business organizations.

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1 1. (Optional) Sign up for LearnSmart and work the chapter 8-10 and decks down to zero. 2. Carefully read every assigned page, taking notes if that s your style. 3. Make sure you know the correct answer to every True/False question that appears in the lecture slides (including this lecture!) 4. Review every question you missed on the Catalyst quizzes. 5. Take the practice quizzes (one per chapter) available at the Student Online Learning Center. 6. Review your lecture notes. 7. Master the vocabulary flashcards available at the Student Online Learning Center for each chapter; in the sense that if given the definition, you can give the term for each one. 8. Read the script in the with script version of the PowerPoint slides. 9. Get at least 6 hours of sleep the night before. Chapter 8: True or False? Max Weber was a proponent of nepotism in business organizations. The practice among those with power or influence of favoring relatives or friends, especially by giving them jobs. 1

2 Make of your firm a meritocracy (rule by the most qualified) Stamp out nepotism Nepotism Chapter 8: True or False? Rob is a middle manager who spends all of his time devising ways to implement the ideas of top management. Max Weber would have called Rob a bureaucrat. 8-7 Chapter 8: True or False? Fayol s principle of esprit de corps says that employees should be divided into small groups that can be directed efficiently by a single manager. A spirit of pride and loyalty should be created among people in the firm. Managers should pay particular attention to fostering in their workers a sense of pride in the work of their department, and a sense of loyalty to the members of that department. Chapter 8: True or False? Fayol believed that managers should treat employees and peers with respect and justice. A manager should treat employees and peers with respect and justice. 2

3 Chapter 8: True or False? Span of control refers to the number of different markets a business can serve efficiently. Optimal span of control: The maximum number of subordinates a given manager or supervisor can supervise while still being fully effective in their position. Actual span of control: The actual number of subordinates that currently report to a given manager or supervisor. Chapter 8: True or False? In a line-and-staff organization, staff positions are temporary jobs to train new line managers. Staff Personnel -- Employees who advise and assist line personnel in meeting their goals, and include marketing research, legal advising, IT and human resource employees Chapter 8: True or False? Team participants in a matrix organization model may report to two managers

4 Chapter 8: True or False? The informal organization is created by the decisions of top management Informal Organization -- The system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization. The informal organization is never captured or reflected in the official organization charts or other documents of the company. Chapter 8: True or False? While most companies have a formal organization structure, only poorly managed firms also have an informal organization Chapter 8: True or False? The grapevine refers to the formal channel used for confidential communications between members of top management. Companies such as IBM prefer to stay the course and continue to compete by selling products instead of services. 4

5 Now no company offers more Information Technology services than IBM By switching IBM s focus from production to services Sam Palmisano has led his company into the fastestgrowing segment of the global market. Firms that specialize in accounting, finance, and management consulting are all part of the service sector....in the service sector toppaying jobs already exist in business services such as accounting, finance, and management consulting. An intermittent production process is characterized by long production runs that turn out finished goods over time. A production process in which the production run is short and the machines are changed frequently to make different products. When it comes to location decisions, labor costs are no longer an important consideration for most manufacturing firms. 5

6 Primary drivers Availability of cheap & skilled labor Which is in turn affected by quality of life factors: weather, crime, home prices, quality of local schools, etc. (and) Cheap Land (which produce low rents) Many state and local governments offer tax incentives and government services to attract businesses One big incentive to locate in a particular city or state is the tax situation there and degree of government support (M)any compete fiercely by offering companies tax reductions and other support so they will locate there. If a company achieves Six Sigma standards, they automatically win the Malcolm Baldrige award. A quality system that allows only 3.4 defects per million opportunities. To qualify, a company has to show quality in seven areas: - Leadership - Strategic planning - Customer and market focus - Information and analysis - Human resources focus - Process management, and - Business results

7 The evaluation process for the Baldrige award measures a firm s quality in several key areas including planning, leadership, and customer and market focus. The significance of the critical path on a PERT chart is that it identifies the least costly method of producing a given product. Gantt charts will show the production manager if certain activities in the production process are lagging behind their acceptable time of completion A company becomes lean by implementing a process of continuous improvement in which every opportunity to eliminate wasted time or other resources is taken

8 Among its many uses, a PERT chart includes a "progress indicator" bar for each project step that shows the project manager how much of that step has been completed. Among its many uses, a PERT chart shows the project manager whether any project steps are behind schedule or not; and if so, which ones. If you ever want to get rehired as a project manager, you should endeavor to deliver the project you are managing both on time and on or under budget. Operations management is defined as the art and science of making goods (and goods only) efficiently and effectively. Production management is the art and science of making any combination of goods and/or services efficiently and effectively. The steps on the critical path are of special interest to the project manager. 8

9 When a producer negotiates with their supplier to switch to Just-in-Time inventory control, some increase in the price per unit purchased is usually involved. According to management professor William Ouchi, the best way for U.S. firms to become more competitive is to adopt the Type J approach to management. Ouchi wanted to help U.S. firms adopt successful Japanese strategies, but he realized it wouldn t be practical to (adopt) an approach based on the culture of another country (so he) recommended a hybrid approach, Theory Z Mark successfully completed a very challenging assignment given to him by his supervisor at work. The feeling of accomplishment and satisfaction Mark experiences is an example of an extrinsic reward. The Hawthorne studies proved that the methods of scientific management were the best way to achieve maximum productivity among employees. 9

10 According to Maslow, people will try to satisfy their higher order needs before they turn their attention to lower order needs. Safety needs are placed at the lowest level in Maslow s hierarchy of needs. Herzberg s study showed that pay was the job characteristic that ranked highest as a motivator Motivators 1. Achievement 2. Recognition 3. Work Itself 4. Growth 5. Advancement 6. Responsibility 7. Peer and Group Relationships Hygiene Factors 8. Pay 9. Supervisor s Fairness 10. Company Policies and Rules 11. Status 12. Job Security 13. Supervisor s friendliness 14. Working conditions Herzberg used the term hygiene factor to refer to an element of job content that was most important as a source of worker motivation. 10

11 According to McGregor, Theory X-type managers motivate employees by giving them a great deal of freedom and responsibility. Theory Y managers assume that the main factor that motivates most employees is the desire to earn more money. Fast Track Corporation moves employees from one job to another on a regular basis in order to improve motivation. Fast Track s strategy is job enlargement. Job Enlargement -- A job enrichment strategy that involves combining a series of tasks into one challenging and interesting assignment. Job Rotation -- A job enrichment strategy that involves moving employees from one job to another Frederick Herzberg interviewed managers and asked them What motivates your employees to work hard? Asked employees to rank motivators 1. Achievement 2. Recognition 3. Work Itself 4. Growth 5. Advancement 6. Responsibility 7. Peer and Group Relationships 11

12 Theory X Managers Believe Their Employees: Dislike Work Avoid Responsibility Have Little Ambition Are motivated by fear & money only Need to be forced, controlled, directed and/or threatened to work hard McGregor says Theory X managers dislike work. McGregor says Theory X managers seek to avoid responsibility. Studies show that employee effectiveness and effort vary a lot between companies. 12

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17 But Many Product Packages Go Well Beyond the Basic Functions! To attract buyers attention Protect the goods inside and be tamperproof Describe and provide information about the product Explain the product s benefits Provide warranty information and warnings Give an indication of price, value, and uses

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19 True or False? As a promotional strategy, advertising is more important in the marketing of industrial goods than it is in the marketing of consumer goods. True or False? Unsought goods and services are products consumers do not actively seek out for purchase on a regular basis. True or False? Capital items are industrial goods that are expensive and last a long time. 19

20 How would you classify these consumer products? - Beautyrest mattress - Honda Accord - McDonald s Big Mac - Rolls Royce automobiles - Oreo Cookies - Harvard University degree True or False? While the Universal Product Code (UPC) improves efficiency at the retail check-out counter, it has increased problems in controlling inventory True or False? A knockoff brand is a brand name that has lost its exclusive legal protection. True or False? Sometimes a firm will lower prices below their costs in order to build a customer base. 20

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