Managing people. Study focus. Reading strategies. B Identifying arguments for and against. A Reading quickly for general understanding

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1 15 Managing people Study focus B Identifying arguments for and against 1 Have you ever been managed by someone? What was positive and what was negative about their management style? 2 Would you like to be a manager? If so, what skills do you have that would make you a good manager? Make a list and compare it with a partner. 3 If somebody says they use a carrot and stick method of management, what do you think they mean? Reading strategies A Reading quickly for general understanding 1 Read the text from an academic textbook about management. Which definition, a or b, matches Theory X and which matches Theory Y? a a method of management that allows the worker more control b a method of management that emphasizes control 2 Which theory do these ideas relate to? Circle X or Y. a People are lazy. b People can self-direct. c People need to be directed and threatened. d Achievement needs to be rewarded. e People seek responsibility in the right conditions. f People lack ambition. g People lack motivation beyond the very basic level. h People are creative. i People s intellect is not fully used. j Motivation occurs at a high level. Read the text again. Which argument from each pair does the writer present in the text? 1 Theory X a McGregor believes this approach best matches human nature. b McGregor does not believe this approach matches human nature. 2 Theory X a Using Theory X will have positive outcomes. b Using Theory X will have negative outcomes. 3 Theory Y a Theory Y will get employees to work with a manager. b Theory Y will get employees to work against a manager. 4 Theory X and Y a Theory X is the best management method. b Theory Y is the best management method. C Reacting to the text Discuss the questions in pairs. Which method do you think is the best management method and why? The writer is clearly against Theory X. Are there any situations where you think Theory X might have positive outcomes? Have you worked for managers with different styles of leadership? If so, do their styles match one of the theories or are they somewhere between the two theories? 60

2 Theory X and Theory Y 5 10 (a) How managers approach the performance of their jobs and their behaviour towards subordinate staff is likely to be influenced by their ideas about people, and human nature and work. Using Maslow s hierarchy of needs model, McGregor, in 1960, put forward two theories about human nature and behaviour at work. He argued that the style of management adopted is a function of the manager s attitudes towards people and assumptions about human nature and behaviour. The two ideas are called Theory X and Theory Y and are based on polar assumptions about people and work. Theory X Theory X represents the carrot-and-stick assumptions on which traditional organisations are based. Its assumptions are that: (b) the average person is lazy and has a natural dislike of work; most people must be coerced, controlled, directed and threatened with punishment if the organisation is to achieve its objectives; the average person avoids responsibility, prefers to be directed, lacks ambition and values security most of all; and motivation occurs only at the physiological and security levels. The central principle of Theory X is direction and control through a centralised system of organisation and the exercise of authority. McGregor questioned whether the Theory X approach to human nature is correct. He also questioned the relevance of management practices which are based upon it. (c) Assumptions based on a Theory X approach, and the use of rewards and sanctions, could result in an exploitative or authoritarian style of management. Theory Y At the other extreme to Theory X is Theory Y which represents the assumptions consistent with current research knowledge. The central principle of Theory Y is the integration of individual and organisational goals. Its assumptions are: for most people work is as natural as play or rest; people will exercise self-direction and self-control for the benefit of objectives to which they are committed; commitment to objectives is a function of rewards associated with their achievement; (d) given the right conditions, the average worker can learn to accept and seek responsibility; the capacity for creativity in solving organisational problems is distributed widely in the population; the intellectual potential of the average person is only partially utilised; and motivation occurs at the belongingness, esteem and self-actualisation levels as well as at the physiological and security levels. (e) McGregor implies that a Theory Y approach is the best way to elicit co-operation from members of an organisation. It is the task of management to create the conditions in which individuals may satisfy their motivational needs and in which they achieve their own goals through meeting the goals of the organisation. Managerial strategies Although Theory X and Theory Y are based on polar extremes and are an over-simplification, they do represent identifiable philosophies that influence managerial behaviour and strategies. Most people have the potential to be self-motivating. They can best achieve their personal goals through self-direction of their efforts towards meeting the goals of the organisation. Broadening educational standards and changing social values mean that people today have wider expectations of the quality of working life, including opportunities for consultation and participation in decisions that affect them. Managers should develop practices based on an accurate understanding of human behaviour and motivation. Source: L. Mullins, Management and Organisational Behaviour, Eighth edition, Pearson Education, 2007, pp Unit 15 Managing people 61

3 Business vocabulary A Other people s ideas In academic writing several different verbs can be used to introduce the ideas of other people. 1 Look at the words in italics in sentences 1 8 and answer questions a c. Use a dictionary to help if necessary. a Which three words are used to describe a possibility? b Which three words mean to disagree with strongly? c Which two words mean to express some doubt? 1 Smith intimates that whilst these conditions are ideal they are not realistic. 2 McGregor rejects the idea that Theory X matches well to natural human behaviour. 3 His research methods have been questioned by many. 4 McGregor suggests that empowering employees is key to creating an effective work environment. 5 Many have disputed the validity of Maslow s theory. 6 Whilst the ideas were not challenged openly, it was implied that there were significant weaknesses. 7 Even a weak idea can encourage thought and make people attempt to challenge it, thus advancing the field. 8 It is difficult not to query the ideas when they are based on little research. 2 Use the information in the text on page 61 and reporting verbs from 1 to write sentences about ideas a e. Refer to Mullins or McGregor as appropriate. (The information you will need is indicated by a letter in the text.) a The way people manage is affected by how they view people. Mullins suggests that a manager s behaviour towards staff will be based on their views of people. b People are lazy and need to be controlled. c Theory X may result in a poor management style. d People like to be controlled. e The importance of cooperation. 3 Could you replace any of the verbs in the sentences in 2 without changing the meaning? B Management styles 1 Match the words in italics to definitions a h. Attitudes towards management have changed dramatically in recent years. Previous management styles relied heavily on the manager s position to either threaten or coerce workers into performing. This assumption that people performed when pressured or pushed into completing a task appears outdated today. Managers are more likely to consult with an employee than to threaten them. Companies try to utilize their workforce better by considering employees interests and strengths when delegating work tasks. These changes mean that power is distributed more evenly among members of staff and that companies are rewarded with more productive and motivated employees. a to say you will cause problems for someone if you do not get what you want b to discuss something with someone before making a decision c to persuade someone forcefully to do something they do not want to do d to use something in an effective way e to share something between a number of people f feelings or opinions about someone or something g to give someone something in return for good work h a belief that something is true even though you have no proof 2 Complete the text with the words from 1. Change the form of the word if necessary. I left my last job because the managers were very authoritarian. They used to 1 us into doing extra work at weekends. They also 2 us with dismissal if they felt we weren t performing at work. Personally, I do not respond well to people with such a negative 3. I m much more productive if I m given responsibility and I m 4 about any decisions that affect me. The 5 that people need to be bullied into working is very outdated. My new company is much better. They 6 work evenly among the members of the team and they 7 the skills and strengths of each individual. They always 8 work of a high standard, so motivation is high within the team. 3 Briefly describe your opinion of effective management, using words from 1. 62

4 Writing skills A Using sources in writing Units 8, 13 and 14 focus on skills related to using the ideas of others in academic writing. This lesson will look at how to bring all those skills together and integrate others work into your own writing. 1 Making notes is an effective method when you want to use a longer section of another s work in your own writing. Look at the notes for the first paragraph of the text on page 61 and compare them with the original text. Manager s approach comes from beliefs about people, human nature and work. McGregor = 2 ideas about hum. nat. + work Style of man. = att. to people 2 ideas are Theory X and Y 2 Underline two examples of each of these techniques in the notes in 1. a using abbreviations b using content words c simplifying complex sentences d using symbols 3 Work in pairs. Make notes on the text on page 61, focusing on key content words, abbreviations and simplifying complex sentences. Student A Make notes on the assumptions of Theory X. Student B Make notes on the assumptions of Theory Y. 4 Give a spoken summary of your theory to your partner. 5 Expand your notes on your theory into a maximum of two sentences. 6 Paraphrasing is an effective method if you want to focus on a smaller section of another s work. You can change word order, sentence structure and grammatical form, and use synonyms for key words. The meaning stays the same. Look at the sentence from the text on page 61 and the paraphrase below. Tick ( ) what has changed: meaning vocabulary spelling grammar word order The central principle of Theory X is direction and control through a centralised system of organisation and the exercise of authority. The use of control from a central point and explicit authority are key points of Theory X. 7 Paraphrase this sentence from the text in your own words. The central principle of Theory Y is the integration of individual and organisational goals. 8 Both your expanded notes from 5 and your paraphrase from 7 would need to be referenced. Tick ( ) the information you would need to include for an indirect reference in the text. a publisher b year c author s first name d author s surname e title of the book Underline this information in the indirect quote. Mullins (2007) describes Theory X as the use of explicit authority and control from a central point. 9 Complete the reporting verbs with the missing letters and put them in the correct group below. r t s g _ q _e _ t _ im _ c _ l _ e q _ y express possibility disagree express doubt B Writing practice Write a paragraph on the topic of Theory X. Introduce the topic (check unit 10 if you are not sure how). Introduce the quote using a reporting verb. Comment on the significance of the quote what does it show or mean in relation to the paragraph topic? Research task Find another theory of management such as Taylor s scientific management theory, Weber s theories of bureaucracy or Fayol s principles of management. Create one paragraph highlighting a key idea in the theory, including an indirect reference. Unit 15 Managing people 63

5 4 Marketing Study focus 1 In pairs, discuss what you know about these international companies. Nokia Nestle 2 Answer the questions. 1 Do these companies have just one product or many different products? 2 How many different products can you think of for the four companies? Make a list for each. 3 Look at the phrase from the text and its definition. portfolio of products (line 1) A range of products owned by one company or organization. Think of a company you know well. Make notes about its portfolio of products. Reading strategies BMW Proctor & Gamble A Understanding a text using background knowledge 1 You are going to read an extract from an academic textbook about Marketing. Of the products you wrote down in Study focus, which ones are the most successful now? 2 How do you think a company can evaluate the success of its products? 3 Which of the following characteristics is most important for a product to be successful? Rank them in order from 1 (most important) to 5 (least important). to be new to be established to be old to have a large market share of the market to be very profitable 4 What balance of the characteristics in 3 do you think a company needs in its portfolio of products? 5 Read the text and check your answers. B Understanding the relationship between text and graphic 1 Look at Figure 4.1 in the reading text. a What does this figure show? b How easy is this figure to interpret without reading the text? 2 Read the text again. a In which paragraph can you find information about the origins of Figure 4.1? b What additional information does the rest of the text provide about Figure 4.1? 3 Look at Figure 4.2 in the reading text. a After studying Figure 4.1, is it easier to interpret Figure 4.2 without reading the text? b What additional information does the text add about Figure 4.2? C Finding support for an opinion 1 Read opinions A G. Then read each paragraph in more detail to find support for each opinion. A The success of a product can only really be judged in relation to other products a company has. B The success of a product doesn t depend only on market share. C The rate of growth in some industries is likely to be higher than in others. D Products that are already a market leader require a lot of investment to grow. E A product that has low market share and low growth should be cut if it is unprofitable. F Too many products in one category creates an unbalanced portfolio. G The Boston Box cannot be used to solve a problem. 2 Think about one of the companies you focused on in Study focus. Where would their different products fit on the Boston portfolio matrix? D Reacting to the text Discuss in pairs. What type of company could not use this model? Are all products and ideas developed rationally? What are the dangers for a company that has an unbalanced portfolio? 16

6 Product portfolio analysis Rate of market growth When managing a collection or portfolio of products, it is important to realize that understanding the performance of an individual product can often fail to give the complete picture. What is really important is an understanding of the performance of a company s products relative to each other. By creating a balanced portfolio of old, mature, established, growing, and very new products, there is a better chance of delivering profits, both now and in the future. Assessing the variety of a company s products can be done in a number of ways. One method involves the creation of a two-dimensional graphic of their comparative strategic positions. This technique is referred to as a portfolio matrix. The Boston Consulting Group (BCG) developed the original idea, and their matrix, the Boston Box, is shown at Figure 4.1. It is based on two key variables, market growth and relative market share (i.e. market share as a percentage of the share of the product s largest competitor, expressed as a fraction). A relative share of 0.8 means that the product achieves 80 per cent of the market leader s sales volume (or value). This is not the strongest competitive position, but it is not a weak position either. A relative market share of 1 means that the company shares market leadership equally with a competitor. A relative market share of 2 means that it has twice the market share of its nearest competitor. In Figure 4.2, the vertical axis refers to the product s market growth rate and the horizontal axis refers to its market strength, as measured by relative market share. The size of the circles represents the sales revenue generated by the product. Relative market share is generally regarded as high when you are the market leader (i.e. when the relative market share is 1 or greater). Determining the rate of market growth of a product is more problematic and depends on the industry to some extent. In some industries a market growth rate of 5 per cent is regarded as high, whereas in others this might be 10 per cent. The benchmark between high and low is, however, often taken to be 10 per cent. The BCG identified four categories of product. Question marks (also known as problem children ) are products that exist in growing markets but have low market share. As a result there is negative cash flow and they are unprofitable. Stars are probably market leaders, but their growth has to be financed through fairly heavy levels of investment. Cash cows, on the other hand, exist in fairly stable, low-growth markets and require little on-going investment. Their very high market share provides both positive cash flows and high levels of profitability. Dogs experience low growth, low market share, and generate negative cash flow. These performance indicators suggest that they are operating in declining markets and they have no real long-term future. Stars Cash cows Relative market share Figure 4.1 The Boston Box Question marks Dogs Rate of market growth Stars Cash cows Relative market share Question marks Dogs Figure 4.2 Present and future positions in the BCG matrix Portfolio analysis is an important analytical tool as it draws attention to the cash flow and investment characteristics of a company s products and indicates how financial resources can be manoeuvred to attain optimal strategic performance over the long term. Essentially, excess cash generated by cash cows should be utilized to develop question marks and stars, which are unable to support themselves. This enables stars to become cash cows and therefore be self-supporting assets. Dogs should only be retained as long as they contribute to positive cash flow and do not restrict the use of assets and resources elsewhere in the business. Once they do, they should be divested or removed from the portfolio. Plotting all of a company s products on to the matrix, it becomes easier to see how well balanced the product portfolio is. An unbalanced portfolio is one that has too many products grouped in one or two quadrants. Where products are distributed equally, and where market shares and cash flows equate with their market position, the portfolio is said to be financially healthy and well balanced. Portfolio analysis is an important guide to strategic development, because it gives answers to questions like: How will the market grow? What will be our market share? What investment will be required? How can a balanced portfolio be created from this point? However, the Boston Box only provides strategic indicators, not solutions. It is management s task to consider the information and make decisions based on their judgement. Source: P Baines, C Fill & K Page, Marketing, Oxford University Press 2008, pp Unit 4 Marketing 17

7 Business vocabulary A Marketing 1 Check you understand key marketing terms from the text on page 17. Replace the phrases in italics in sentences 1 7 with phrases a g. a a balanced portfolio (line 6) b comparative strategic position (line 13) c relative market share (line 17) d the market leader (line 25) e sales revenue (line 23) f rate of market growth (line 26) g negative cash flow (line 38) 1 Our proportion of the market compared to our rivals is weakening. 2 Our increase in the share of business has been larger than many competitors. 3 The importance of a product in comparison to our other products is key to each product succeeding. 4 If a company has too many similar products, the products will compete against each other. Every company needs a good range of products to sell to consumers. 5 Our soft drink is number one in the drinks market. 6 Our income from selling has been strong this year. 7 We have more money going out than we have coming in. If this continues we will go into debt. 2 Make sentences a g true by completing them with the name of a company you know about. Explain your reasons. a In recent years the rate of market growth for b c d e competitors. negative cash flow. has been faster than its is the market leader. has problems with has a balanced portfolio. has a better comparative strategic position than. f The relative market share of is high. g The sales revenue of very high. is B Verb preposition collocations Understanding and learning verb preposition collocations will help you to use key expressions more accurately. 1 Match the prepositions in the list to the verbs they are commonly used with. to on by in a to base (something) b to refer c to depend d to exist e to draw attention f to be generated g to contribute h to plot (something) 2 Quickly look back at the text on page 17 and check your answers to 1. 3 Match verb preposition collocations a h in 1 to definitions to mention another idea 2 to use something to form an idea 3 to mark something on a graph or chart 4 to be reliant on, or need the support of, someone or something 5 to be present in a place or market 6 to come from, or be produced by, something 7 to highlight the importance of something 8 to add something else to something 4 Choose a collocation to complete sentences a h. a The research was a study of 500 people. b The success of a product often the investment in it. c Smith Johnson s ideas when developing his theory. d A market leader almost every product sector. e Negative cash flow can a product s decline. f Sales revenue can be a successful marketing campaign. g The Boston Matrix theory is used to the market position of each product in a company s portfolio. h Statistical data is often a graph for the purposes of analysis. 18

8 Writing skills To paraphrase means to express what someone else has said or written using your own words. Being able to paraphrase a text shows that you have understood it. You can change: 1 word order/sentence structure 2 grammatical form, e.g. understanding (v) = an understanding of (n) 3 non-specialized vocabulary, e.g. the complete picture = everything you need to know When you paraphrase someone else s work, the words and the structure change but the meaning stays the same. A Paraphrasing sentences 1 Look at sentences A and B. How are they similar? How are they different? Which sentence is from the text on page 17? Sentence A When managing a collection or portfolio of products, it is important to realize that understanding the performance of an individual product can often fail to give the complete picture. (29 words) Sentence B An understanding of the performance of a single product won t necessarily tell you everything you need to know, and if you are responsible for the management of a portfolio of products it is essential to recognize this fact. (38 words) 2 Look at sentence B in 1 again. Underline phrases in B that have the same meaning as words/phrases 1 5 from A circled below. 1 When managing a collection or portfolio of products, 5 Which sentence, 1 or 2, best paraphrases sentence C from the text. Why is it the best? Sentence C Plotting all of a company s products on to the matrix, it becomes easier to see how well balanced the product portfolio is. (lines 62 66) 1 By plotting a company s products on the matrix, you can more easily see how balanced the portfolio is. 2 You can analyse whether or not a company s product portfolio is well balanced by comparing the individual products using the portfolio matrix. 6 Paraphrase sentences a c. Change the word order and use a synonym for the underlined words. It is considered to be a weakness if a company focuses too much on just one product. If a company focuses too much on just one product it is seen to be a weakness. a It is important for a company to recognize when one of its products is operating in a declining market. b As far as possible, a company should know about the activities of its competitors. c If a company is experiencing financial difficulties it is a good idea to conduct a portfolio analysis. B Writing practice 1 Look at the ideas highlighted in sentence D. Paraphrase it using the techniques in A1 6. Sentence D Portfolio analysis is an important analytical tool as it draws attention to the cash flow and investment characteristics of a company s products and indicates how financial resources can be manoeuvred to attain optimal strategic performance over the long term. (lines 40 48) Unit 4 Marketing 2 it is important to realize that 3 understanding the performance of 4 an individual product 5 can often fail to give the complete picture. 3 Tick what has changed in sentence A. word order vocabulary spelling punctuation grammar meaning 4 Which words/phrases in sentence A have not changed in sentence B? Why is this? 2 Paraphrase sentence E. Sentence E An unbalanced portfolio is one that has too many products grouped in one or two quadrants. Where products are distributed equally, and where market shares and cash flows equate with their market position, the portfolio is said to be financially healthy and well balanced. (lines 66 74) Research task Research a company with a suitable product range. Plot their key products on the Boston Box. 19