MG8591 -PRINCIPLES OF

MANAGEMENT

Mrs.P.Sangeetha
Assistant Professor
Department of CSE
P.A College of Engineering and Technology
 UNIT III - ORGANISING
• Nature and purpose – Formal and informal organization –
organization chart – organization structure – types – Line and
staff authority – departmentalization – delegation of authority
– centralization and decentralization – Job Design - Human
Resource Management – HR Planning, Recruitment, selection,
Training and Development, Performance Management , Career
planning and management .

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 NATURE OR CHARACTERISTICS OF
ORGANIZING
Organizing as arranging and structuring work to
accomplish organizational goals. It’s an important process
during which managers design an organization’s structure.
➢ Division of Work
➢ Coordination
➢ Plurality of Persons
➢ Common Objectives
➢ Well-defined Authority and Responsibility
➢ Organization is a Structure of Relationship
➢ Organization is a Machine of Management
➢ Organization is a Universal Process
➢ Organization is a Dynamic Process
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 FORMAL ORGANIZATION
• The formal organization refers to the structure of jobs
and positions with clearly defined functions and
relationships as prescribed by the top management.
(OR)
• Bernard defines formal organization as -
"a system of consciously coordinated activities or forces of
two or more persons. It refers to the structure of well-defined
jobs, each bearing a definite measure of authority,
responsibility and accountability."
• This type of organization is built by the management to realize
objectives of an enterprise and is bound by rules, systems and
procedures.

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 FORMAL ORGANIZATION

• The formal organization is built around four key pillars. They

are:
➢ Division of labour
➢ Scalar and functional processes
➢ Structure
➢ Span of control

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 INFORMAL ORGANIZATION
• Informal organization refers to the relationship between
people in the organization based on personal attitudes,
emotions, prejudices, likes, dislikes etc.
• An informal organization is an organization which is not
established by any formal authority, but arises from the
personal and social relations of the people.
• These relations are not developed according to procedures and
regulations laid down in the formal organization structure;
generally large formal groups give rise to small informal or
social groups.

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 DIFFERENCES BETWEEN FORMAL AND
INFORMAL ORGANIZATION

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 DIFFERENCES BETWEEN FORMAL AND
INFORMAL ORGANIZATION

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 NATURE AND PURPOSE OF ORGANIZING

• Organizational structure is the formal arrangement of jobs

within an organization. This structure, which can be shown
visually in an organizational chart, also serves many
purposes.
• When managers create or change the structure, they’re
engaged in organizational design.

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 ORGANIZATION STRUCTURE

• An organization structure is a framework that allots a

particular space for a particular department or an individual
and shows its relationship to the other.
• An organization structure shows the authority and
responsibility relationships between the various positions in
the organization by showing who reports to whom.
• It is an established pattern of relationship among the
components of the organization.

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 ORGANIZATION STRUCTURE

• March and Simon have stated that-"Organization structure

consists simply of those aspects of pattern of behavior in the
organization that are relatively stable and change only slowly.“
• The structure of an organization is generally shown on an
organization chart.
• It shows the authority and responsibility relationships between
various positions in the organization while designing the
organization structure, due attention should be given to the
principles of sound organization.

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 SIGNIFICANCE OF ORGANIZATION STRUCTURE
• Properly designed organization can help improve teamwork
and productivity by providing a framework within which the
people can work together most effectively.
• Organization structure determines the location of decision-
making in the organization.
• Sound organization structure stimulates creative thinking and
initiative among organizational members by providing well
defined patterns of authority.
• A sound organization structure facilitates growth of enterprise
by increasing its capacity to handle increased level of
authority.
• Organization structure provides the pattern of communication
and coordination.
• The organization structure helps a member to know what his
role is and how it relates to other roles.

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 ORGANIZATION STRUCTURE DESIGN OR
PRINCIPLES OF ORGANIZATION STRUCTURE

• Organizational design is a process that involves decisions

about six key elements:
• Work specialization
• Departmentalization
• Chain of command
• Span of control
• Centralization and Decentralization
• Formalization

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 PURPOSES OF ORGANIZING

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 ORGANIZATION STRUCTURE DESIGN:WORK
SPECIALIZATION
• Work specialization, which is dividing work activities into
separate job tasks.
• Work specialization makes efficient use of the diversity of
skills that workers have.
• Early proponents of work specialization believed that it could
lead to great increases in productivity.
• Most managers today continue to see work specialization as
important because it helps employees be more efficient.
• At some point, however, work specialization no longer leads to
productivity.
• Organizational chart: The visual representation of an
organization’s structure

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 ECONOMIES AND DISECONOMIES OF
WORK SPECIALIZATION

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 ORGANIZATION STRUCTURE
DESIGN:DEPARTMENTALIZATION
• Departmentalization: After deciding what job tasks will be
done by whom, common work activities need to be grouped
back together so work gets done in a coordinated and
integrated way. The basis by which jobs are grouped together
is called departmentalization.
• Five common forms of departmentalization are used, although
an organization may develop its own unique classification.
➢ Functional departmentalization.
➢ Geographical departmentalization.
➢ Product departmentalization.
➢ Process departmentalization.
➢ Customer departmentalization.
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 ORGANIZATION STRUCTURE
DESIGN:DEPARTMENTALIZATION

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 ORGANIZATION STRUCTURE
DESIGN:DEPARTMENTALIZATION

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 ORGANIZATION STRUCTURE
DESIGN:DEPARTMENTALIZATION

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 ORGANIZATION STRUCTURE
DESIGN:DEPARTMENTALIZATION

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 ORGANIZATION STRUCTURE
DESIGN:DEPARTMENTALIZATION

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 ORGANIZATION STRUCTURE
DESIGN:DEPARTMENTALIZATION
• One popular departmentalization trend is the increasing use of
customer departmentalization. Because getting and keeping
customers is essential for success, this approach works well
because it emphasizes monitoring and responding to changes
in customers’ needs.
• Another popular trend is the use of teams, especially as work
tasks have become more complex and diverse skills are needed
to accomplish those tasks, One specific type of team that more
organizations are using is a cross-functional team.
• A cross-functional team which is a work team composed of
individuals from various functional specialties.

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 ORGANIZATION STRUCTURE DESIGN:
CHAIN OF COMMAND

• Chain of Command: The line of authority extending from

upper organizational levels to the lowest levels, which clarifies
who reports to whom.
• Authority :The rights inherent in a managerial position to tell
people what to do and to expect them to do it.
• Acceptance theory of authority: The view that authority
comes from the willingness of subordinates to accept it.

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 ORGANIZATION STRUCTURE DESIGN:
CHAIN OF COMMAND

• Barnard’s view of authority: Barnard contended that

subordinates will accept orders only if the following conditions
are satisfied:
1. They understand the order.
2. They feel the order is consistent with the organization’s
purpose.
3. The order does not conflict with their personal beliefs.
4. They are able to perform the task as directed.

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 ORGANIZATION STRUCTURE DESIGN:
CHAIN OF COMMAND

• The early management writers also distinguished between two

forms of authority:
➢ Line authority
➢ Staff authority
• Line authority: Authority that entitles a manager to direct the
work of an employee.
• Staff authority: Positions with some authority that have been
created to support, assist, and advise those holding line
authority.

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 CHAIN OF COMMAND AND LINE
AUTHORITY

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 ORGANIZATION STRUCTURE DESIGN:
CHAIN OF COMMAND

• Term line is used to differentiate line managers from staff

managers.
• Line refers to managers whose organizational function
contributes directly to the achievement of organizational
objectives.
• In a manufacturing firm, line managers are typically in the
production and sales functions, whereas managers in human
resources and payroll are considered staff managers with staff
authority.
• Whether a manager’s function is classified as line or staff
depends on the organization’s objectives.

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 LINE VERSUS STAFF AUTHORITY

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 ORGANIZATION STRUTURE DESIGN: CHAIN
OF COMMAND

• Responsibility: The obligation or expectation to perform any

assigned duties.
• Unity of command: The management principle that each
person should report to only one manager.
• Although early management theorists (Fayol, Weber, Taylor,
Barnard, and others) believed that chain of command,
authority (line and staff), responsibility, and unity of command
were essential times have changed. Those elements are far
less important today.

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 ORGANIZATION STRUCTURE DESIGN:
CHAIN OF COMMAND
• Responsibility, Chain of Command and Unity of Command are
less important today because:
➢ Information technology also has made such concepts less
relevant today because.
➢ It also means that employees can communicate with anyone
else in the organization without going through the chain of
command.
➢ Also, many employees, especially in organizations where work
revolves around projects, find themselves reporting to more
than one boss, thus violating the unity of command principle.
such arrangements can and do work if communication,
conflict, and other issues are managed well by all involved
parties.
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 ORGANIZATION STRUCTURE DESIGN:SPAN
OF CONTROL

• Span of control: The number of employees, a manager can

efficiently and effectively manage.
• Determining the span of control is important because to a large
degree, it determines the number of levels and managers in an
• Organization.
• An important consideration in how efficient an organization
will be. All other things being equal, the wider or larger the
span, an organization is the more efficient.

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 CONTRASTING SPANS OF CONTROL

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 ORGANIZATION STRUCTURE DESIGN:SPAN
OF CONTROL
• The trend in recent years has been toward larger spans of
control, which is consistent with
➢ Managers’ efforts to speed up decision making
➢ Increase flexibility, get closer to customers,
➢ Empower employees, and reduce costs.
• Managers are beginning to recognize that they can handle a
wider span when employees know their jobs well and when
those employees understand organizational processes. Also,
new pay systems reward quality, service, productivity, and
teamwork.

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 ORGANIZATION STRUCTURE DESIGN:
CENTRALIZATION AND DECENTRALIZATION
• Centralization is the degree to which decision making takes
place at upper levels of the organization. If top managers make
key decisions with little input from below, then the
organization is more centralized.
• The more that lower-level employees provide input or actually
make decisions, the more decentralization there is.
• Centralization-decentralization is not an either-or concept. The
decision is relative, not absolute—that is, an organization is
never completely centralized or decentralized.

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 ORGANIZATION STRUCTURE DESIGN:
CENTRALIZATION AND DECENTRALIZATION
• Early management writers proposed that the degree of
centralization in an organization depended on the situation.
• Many managers believe that decisions need to be made by
those individuals closest to the problems, regardless of their
organizational level .
• As organizations have become more flexible and responsive to
environmental trends, there’s been a distinct shift toward
decentralized decision making. This trend, also known as
employee empowerment, gives employees more authority
(power) to make decisions.

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 CENTRALIZATION OR DECENTRALIZATION

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 ORGANIZATION STRUCTURE DESIGN:
FORMALIZATION
• Formalization refers to how standardized an organization’s
jobs are and the extent to which employee behavior is guided
by rules and procedures.
• In highly formalized organizations, there are explicit job
descriptions, numerous organizational rules, and clearly
defined procedures covering work processes.
• Employees have little discretion over what’s done, when it’s
done, and how it’s done.
• If formalization is low, employees have more discretion in
how they do their work.
• Although some formalization is necessary for consistency and
control, many organizations today rely less on strict rules and
standardization to guide and regulate employee behavior.

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 DELEGATION OF AUTHORITY

• Delegation of Authority means division of authority and

powers downwards to the subordinate.
• Delegation is about entrusting someone else to do parts of your
job.
• Delegation of authority can be defined as subdivision and sub-
allocation of powers to the subordinates in order to achieve
effective results.
• Elements of Delegation
➢Authority
➢Responsibility
➢Accountability

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 DELEGATION OF AUTHORITY
• Authority - in context of a business organization, authority
can be defined as the power and right of a person to use and
allocate the resources efficiently, to take decisions and to give
orders so as to achieve the organizational objectives.
• Responsibility - is the duty of the person to complete the task
assigned to him.
• Accountability - means giving explanations for any variance
in the actual performance from the expectations set.
Accountability cannot be delegated.

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 DELEGATION PROCESS

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 DELEGATION PROCESS

• Allocation of duties – The delegator first tries to define the

task and duties to the subordinate.
• Granting of authority – Subdivision of authority takes place
when a superior divides and shares his authority with the
subordinate. The managers at all levels delegate authority and
power which is attached to their job positions. The subdivision
of powers is very important to get effective results.

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 DELEGATION PROCESS

• Assigning of Responsibility and Accountability – The

delegation process does not end once powers are granted to the
subordinates.
• They at the same time have to be obligatory towards the duties
assigned to them. Responsibility is said to be the factor or
obligation of an individual to carry out his duties in best of his
ability as per the directions of superior.
• Therefore, it is that which gives effectiveness to authority.
• Responsibility is absolute and cannot be shifted.

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 DELEGATION PROCESS

• Creation of accountability – Accountability is the obligation

of the individual to carry out his duties as per the standards of
performance. Therefore, it is said that authority is delegated,
responsibility is created and accountability is imposed.
Accountability arises out of responsibility and responsibility
arises out of authority. Therefore, it becomes important that
with every authority position an equal and opposite
responsibility should be attached.

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 MECHANISTIC AND ORGANIC STRUCTURES
• The mechanistic organization (or bureaucracy) was the natural
result of combining the six elements of structure.
• Adhering to the chain-of-command principle ensured the
existence of a formal hierarchy of authority, with each person
controlled and supervised by one superior.
• Top management would increasingly impose rules and
regulations.
• The early management writers’ belief in a high degree of work
specialization created jobs that were simple, routine, and
standardized.
• Specialization through the use of departmentalization
increased impersonality and the need for multiple layers of
management to coordinate the specialized departments
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 MECHANISTIC AND ORGANIC STRUCTURES
• The organic organization is a highly adaptive form that is as loose
and flexible as the mechanistic organization is rigid and stable.
• The organic organization’s loose structure allows it to change
rapidly as required.
• It has division of labor, but the jobs people do are not standardized.
Employees tend to be professionals who are technically proficient
and trained to handle diverse problems.
• They need few formal rules and little direct supervision because
their training has instilled in them standards of professional conduct.
• The organic organization is low in centralization so that the
professional can respond quickly to problems and because top-level
managers cannot be expected to possess the expertise to make
necessary decisions.

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 MECHANISTIC VERSUS ORGANIC
ORGANIZATIONS

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 CONTINGENCY FACTORS AFFECTING
STRUCTURAL CHOICE

• Appropriate structure is depends on four contingency

variables: the organization’s strategy, size, technology, and
degree of environmental uncertainty
➢Strategy and Structure
➢ Size and Structure
➢ Technology and Structure
➢ Environmental Uncertainty and Structure

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 CONTINGENCY FACTORS AFFECTING
STRUCTURAL CHOICE
• Strategy and Structure
➢ An organization’s structure should facilitate goal
achievement. Because goals are an important part of the
organization’s strategies, it’s only logical that strategy and
structure are closely linked.
➢changes in corporate strategy led to changes in an
organization’s structure that support the strategy.
➢certain structural designs work best with different
organizational strategies.
➢The flexibility and free-flowing information of the organic
structure works well when an organization is pursuing
meaningful and unique innovations.
➢The mechanistic organization with its efficiency, stability,
and tight controls works best for companies wanting to
tightly control costs.

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 CONTINGENCY FACTORS AFFECTING
STRUCTURAL CHOICE
• Size and Structure
➢ An organization’s size affects its structure.
➢ Large organizations— more than 2,000 employees—tend to
have more specialization, departmentalization, centralization,
and rules and regulations than do small organizations.
• once an organization grows past a certain size, size has less
influence on structure. Why?
There are around 2,000 employees, it’s already fairly
mechanistic. Adding another 500 employees won’t impact the
structure much. On the other hand, adding 500 employees to
an organization that has only 300 employees is likely to make
it more mechanistic.
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 CONTINGENCY FACTORS AFFECTING
STRUCTURAL CHOICE
Technology and Structure
• Every organization uses some form of technology to convert
its inputs into outputs.
• To find the impact of technology on structure, Divided the
firms into three distinct technologies that had increasing levels
of complexity and sophistication.
• The first category, unit production, described the production of
items in units or small batches.
• The second category, mass production, described large-batch
manufacturing.

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 CONTINGENCY FACTORS AFFECTING
STRUCTURAL CHOICE
• Finally, the third and most technically complex group, process
production, included continuous process production.
• Organizations adapt their structures to their technology
depending on how routine their technology is for transforming
inputs into outputs.
• The more routine the technology, the more mechanistic the
structure can be, and organizations with more nonroutine
technology are more likely to have organic structures

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 CONTINGENCY FACTORS AFFECTING
STRUCTURAL CHOICE
Environmental Uncertainty and Structure
• Some organizations face stable and simple environments with
little uncertainty.
• Dynamic and complex environments with a lot of uncertainty.
Managers try to minimize environmental uncertainty by
adjusting the organization’s structure.
• In stable and simple environments, mechanistic designs can
be more effective.
• The greater the uncertainty, the more an organization needs the
flexibility of an organic design.

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 WOODWARD’S FINDINGS ON TECHNOLOGY
AND STRUCTURE

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 CONTINGENCY FACTORS AFFECTING
STRUCTURAL CHOICE

• Explain why so many managers today are restructuring their

organizations to be lean, fast, and flexible?
Worldwide economic downturns, global competition,
accelerated product innovation by competitors, and increased
demands from customers for high quality and faster deliveries
are examples of dynamic environmental forces. Mechanistic
organizations are not equipped to respond to rapid
environmental change and environmental uncertainty. As a
result, we’re seeing organizations become more organic.

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 TRADITIONAL ORGANIZATIONAL DESIGNS

• These structures tend to be more mechanistic in nature

➢ Simple Structure
➢ Functional Structure
➢ Divisional Structure

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 TRADITIONAL ORGANIZATIONAL DESIGNS

• Simple structure
An organizational design with low departmentalization,
wide spans of control, centralized authority, and little
formalization.
• Functional structure
An organizational design that groups together similar or
related occupational specialties.
• Divisional structure
An organizational structure made up of separate,
semiautonomous units or divisions.

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 TRADITIONAL ORGANIZATIONAL DESIGNS

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 CONTEMPORARY ORGANIZATIONAL
DESIGNS

• Team Structures
• Matrix and Project Structures
• The Boundaryless Organization
• Learning Organizations

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 CONTEMPORARY ORGANIZATIONAL
DESIGNS

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 CONTEMPORARY ORGANIZATIONAL
DESIGNS

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 EXAMPLE OF A MATRIX ORGANIZATION

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 BOUNDARYLESS ORGANIZATION

• Boundaryless organization, which is an organization whose

design is not defined by, or limited to, the horizontal, vertical,
or external boundaries imposed by a predefined structure.
• What do we mean by boundaries?
There are two types: (1) internal—the horizontal ones
imposed by work specialization and departmentalization and
the vertical ones that separate employees into organizational
levels and hierarchies; and (2) external—the boundaries that
separate the organization from its customers, suppliers, and
other stakeholders.
To minimize or eliminate these boundaries, managers might
use virtual or network structural designs.

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 VIRTUAL ORGANIZATIONS AND NETWORK
ORGANIZATIONS

• Virtual organization :An organization that consists of a small

core of full-time employees and outside specialists temporarily
hired as needed to work on projects.
• Network organization: An organization that uses its own
employees to do some work activities and networks of outside
suppliers to provide other needed product components or work
processes

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 LEARNING ORGANIZATIONS

• Learning Organization: An organization that has developed

the capacity to continuously learn, adapt, and change.Tesco is
an example of a learning organization
• In a learning organization, employees continually acquire and
share new knowledge and apply that knowledge in making
decisions or doing their work. To learn and to apply that
learning—may be the only sustainable source of competitive
advantage.

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 LEARNING ORGANIZATIONS

What structural characteristics does a learning organization need?

➢ Employees throughout the entire organization—across
different functional specialties and even at different organizational
levels—must share information and collaborate on work activities.
➢ Environment requires minimal structural and physical barriers,
which allows employees to work together in doing the
organization’s work the best way they can and, in the process, learn
from each other.
➢ Finally, empowered work teams tend to be an important feature
of a learning organization’s structural design. These teams make
decisions about doing whatever work needs to be done or resolving
issues.
➢ With empowered employees and teams, there’s little need for
“bosses” to direct and control. Instead, managers serve as
facilitators, supporters, and advocates.
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 ORGANIZING FOR COLLABORATION

• An organization’s collaboration efforts can be internal—that is,

among employees within the organization. Or those efforts can
be external collaborations with any stakeholders.
• In both types, it’s important that managers recognize how
such collaborative efforts “fit” with the organization’s
structure and the challenges of making all the pieces work
together successfully.

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 BENEFITS AND DRAWBACKS OF
COLLABORATIVE WORK

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 INTERNAL COLLABORATION

➢ CROSS-FUNCTIONAL TEAMS
➢ TASK FORCES
➢ COMMUNITIES OF PRACTICE

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 INTERNAL COLLABORATION
• CROSS-FUNCTIONAL TEAMS:
➢ Organizations are using team-based structures because
they’ve found that teams are more flexible and responsive to
changing events than are traditional departments or other
permanent work groups.
➢ Teams have the ability to quickly assemble, deploy,
refocus, and disband.
➢ Cross Functional Team is a work team composed of
individuals from various functional specialties. Team members
are brought together to collaborate on resolving mutual
problems that affect the respective functional areas.
➢ The artificial boundaries that separate functions disappear
and the team focuses on working together to achieve
organizational goals.
➢ The concept of cross-functional teams is even being
applied in health care.
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 INTERNAL COLLABORATION
• TASK FORCES. A task force (also called an ad hoc
committee), which is a temporary committee or team formed
to tackle a specific short-term problem affecting several
departments.
• The temporary nature of a task force is what differentiates it
from a cross-functional team.
• Task force members usually perform many of their normal
work tasks while serving on the task force.
• The members of a task force must collaborate to resolve the
issue that’s been assigned to them.
• When the issue or problem is solved, the task force is no
longer needed and members return to their regular
assignments. Many organizations, from government agencies
to universities to businesses, use task forces.
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 INTERNAL COLLABORATION
• COMMUNITIES OF PRACTICE.
communities of practice, which are “groups of people who
share a concern, a set of problems, or a passion about a topic,
and who deepen their knowledge and expertise in that area by
interacting on an ongoing basis.”
Employee councils and networks, share knowledge and help
product development teams on difficult issues.
How effective are these communities of practice?
A recent research study found that communities of practice
can “create value by contributing to increased effectiveness in
employees’ job performance through greater access that they
provide to the ideas, knowledge, and best practices shared
among community members.”
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 SUGGESTIONS FOR MAKING COMMUNITIES
OF PRACTICE WORK

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 EXTERNAL COLLABORATION

• External collaboration efforts have become quite popular for

organizations, especially in the area of product innovation.
• Two forms of external collaboration:
➢open innovation
➢ strategic partnerships.
• Each of these can provide organizations with needed
information, support, and contributions to getting work done
and achieving organizational goals.

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 EXTERNAL COLLABORATION
• OPEN INNOVATION.
open innovation, which is opening up the search for new
ideas beyond the organization’s boundaries and allowing
innovations to easily transfer inward and outward.
Many of today’s successful companies are collaborating
directly with customers in the product development process.
Others are partnering with suppliers, other outsiders, and even
competitors.

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 EXTERNAL COLLABORATION
• STRATEGIC PARTNERSHIPS.
In today’s environment, organizations are looking for
advantages wherever they can get them.
➢ One way they can do this is with strategic partnerships.
➢ Strategic partnerships which are collaborative relationships
between two or more organizations in which they combine
their resources and capabilities for some business purpose.
• Reasons for partnerships :
➢ Flexibility
➢ Informality of arrangements promote efficiencies
➢ Provide access to new markets and technologies,
➢ Entail less paperwork when creating and disbanding projects
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 EXTERNAL COLLABORATION
• Reasons for partnerships :
➢ Risks and expenses are shared by multiple parties
➢ Independent brand identification is kept and can be exploited
➢ Working with partners possessing multiple skills can create
major synergies
➢ Rivals can often work together harmoniously;
➢ Partnerships can take on varied forms from simple to complex
Dozens of participants can be accommodated inpartnership
arrangements
➢ Antitrust laws can protect R&D
The challenge for managers is finding ways to exploit the
benefits of such collaboration while incorporating the collaborative
efforts seamlessly into the organization’s structural design.

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 FLEXIBLE WORK ARRANGEMENT
• Telecommuting
• Compressed Workweeks, Flextime, and Job Sharing.
Telecommuting :
➢ Information technology has made telecommuting possible, and
external environmental changes have made it necessary for
many organizations.
➢ Telecommuting is a work arrangement in which employees
work at home and are linked to the workplace by computer.
➢ Now, many businesses view telecommuting as a business
necessity.
➢ Getting more employees to telecommute provided the
company a way to grow without having to incur any additional
fixed costs such as office buildings, equipment, or parking
lots.

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 FLEXIBLE WORK ARRANGEMENT
➢ The arrangement as a way to combat high gas prices and to
attract talented employees who want more freedom and control
over their work.
Drawback
➢ They argue that employees will waste time surfing the Internet
or playing online games instead of working
➢ They’ll ignore clients, and that they’ll desperately miss the
camaraderie and social exchanges of the workplace.
➢ Significant challenge is making sure that company information
is kept safe and secure when employees are working from
home.

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 FLEXIBLE WORK ARRANGEMENT
• The telecommuter employee may find that the line between
work and home becomes even more blurred, which can be
stressful.
• Managers and organizations must address these important
organizing issues as they move toward having employees
telecommute.

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 FLEXIBLE WORK ARRANGEMENT
• Telecommuting Issues:
➢ One of the first issues to address is encouraging employees to
make that decision to become remote workers.
➢ Companies have encouraged employees to work anywhere but
at the office by pointing to the pay “increase” employees
would receive from money saved on gas, dry cleaning, and
eating out at lunch.
➢ Other companies have used the “green” angle . . . emphasizing
the carbon-free aspect of not driving long distances to and
from the workplace. Managing the telecommuters then
becomes a matter of keeping employees feeling like they’re
connected and engaged.

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COMPRESSED WORKWEEKS, FLEXTIME, AND
JOB SHARING
• Need to restructure work using forms of flexible work
arrangements.
➢ One approach is a compressed workweek, which is a
workweek where employees work longer hours per day but
fewer days per week. The most common arrangement is four
10-hour days (a 4-40 program).
➢ Compressed workweek resulted in a 13 percent reduction in
energy use and estimated that state employees saved as much
as $6 million in gasoline costs.

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COMPRESSED WORKWEEKS, FLEXTIME, AND
JOB SHARING
• Flextime (also known as flexible work hours), which is a
scheduling system in which employees are required to work a
specific number of hours a week but are free to vary those
hours within certain limits.
• A flextime schedule typically designates certain common core
hours when all employees are required to be on the job, but
allows starting, ending, and lunch-hour times to be flexible.
• Flexible work schedules was the most commonly offered
benefit.
• Job sharing :The practice of having two or more people split
a full-time job.
• Many companies have used job sharing during the economic
downturn to avoid employee layoffs.

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 CONTINGENT WORKFORCE
• Contingent workers Temporary, freelance, or contract workers
whose employment is contingent upon demand for their
services .
• Contingent workers can also be temporary employees brought
in to help with special needs such as seasonal work.
Organizational issues associated with contingent workers
• One of the main issues businesses face with their contingent
workers, especially those who are independent contractors or
freelancers, is classifying who actually qualifies as one.
• The decision on who is and who isn’t an independent
contractor isn’t as easy or as unimportant as it may seem.
• Companies don’t have to pay Social Security, Medicare, or
unemployment insurance taxes on workers classified as
independent contractors.
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 CONTINGENT WORKFORCE
• Those individuals also aren’t covered by most workplace laws.
So it’s an important decision.
• There is an incentive to be totally above-board in classifying
who is and is not an independent contractor.
• The legal definition of a contract worker depends on how
much control a company has over the person;
• The more control the company has, “the more likely the
individual will be considered an employee rather than an
independent contractor.”
• Another issue with contingent workers is the process for
recruiting, screening, and placing these contingent workers
where their work skills and efforts are needed.

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 CONTINGENT WORKFORCE

• The final issue a contingent employee’s performance.

• It’s important that managers have a method of establishing
goals, schedules, and deadlines with the contingent employees.
• It’s also important that mechanisms be in place to monitor
work performance and goal achievement, especially if the
contingent employee is working off-site.

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 ORGANIZATIONAL DESIGN CHALLENGES
• Keeping Employees Connected
• Managing Global Structural Issues
Keeping Employees Connected:
• Many organizational design concepts were developed during
the twentieth century when work was done at an employer’s
place of business under a manager’s supervision, work tasks
were fairly predictable and constant, and most jobs were full-
time and continued indefinitely.
• A major structural design challenge for managers is finding a
way to offer flexibility but also keeping widely dispersed and
mobile employees connected to the organization.

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 ORGANIZATIONAL DESIGN CHALLENGES
• Mobile computing and communication technology have given
organizations and employees ways to stay connected and to be
more productive.
• Handheld devices have e-mail, calendars, and contacts that can
be used anywhere. These devices can be used to log into
corporate databases and company intranets.
• Employees can videoconference using broadband networks
and Webcams.
• Many companies are giving employees key fobs with
constantly changing encryption codes that allow them to log
onto the corporate network to access e-mail and company data
from any computer hooked up to the Internet.
• .
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 ORGANIZATIONAL DESIGN CHALLENGES
• Cell phones switch seamlessly between cellular networks and
corporate Wi-Fi connections.
• The biggest issue in doing work anywhere, anytime, however,
is security.
• Companies must protect their important and sensitive
information.
• Fortunately, software and other disabling devices have
minimized security issues.

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 ORGANIZATIONAL DESIGN CHALLENGES
• Managing Global Structural Issues
The structures and strategies of organizations worldwide
are similar, “while the behavior within them is maintaining its
cultural uniqueness.”
• What does this distinction between strategy and culture mean
for designing effective and efficient structures?
When designing or changing structure, managers may need
to think about the cultural implications of certain design
elements.
The structure should support and facilitate organizational
members as they carry out the organization’s work.

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 HUMAN RESOURCE MANAGEMENT(HRM)
Human resource management (HRM)
An important task of HRM is that involves having the right
number of the right people in the right place at the right time.
• A major HRM challenge for managers is ensuring that their
company has a high-quality workforce.
• Why Is HRM Important?
HRM is important for three reasons.
➢ First, it can be a significant source of competitive
advantage as various studies have concluded. people-oriented
HR gives an organization an edge by creating superior
shareholder value.
➢ Second, HRM is an important part of organizational
strategies. Achieving competitive success through people
means managers must change how they think about their
employees and how they view the work relationship.
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 HUMAN RESOURCE MANAGEMENT(HRM)
➢ They must work with people and treat them as partners, not
just as costs to be minimized or avoided.
➢ Finally, the way organizations treat their people has been
found to significantly impact organizational performance.
• Work practices that lead to both high individual and high
organizational performance are known as high-performance
work practices.
• The common thread among these practices seems to be a
commitment to involving employees; improving the
knowledge, skills, and abilities of an organization’s
employees; increasing their motivation; reducing loafing on
the job; and enhancing the retention of quality employees
while encouraging low performers to leave.

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 HIGH-PERFORMANCE WORK PRACTICES

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 EXTERNAL FACTORS THAT AFFECT THE HRM
PROCESS
➢ THE ECONOMY’S EFFECT ON HRM
➢ EMPLOYEE LABOR UNIONS.
➢ LEGAL ENVIRONMENT OF HRM
➢ DEMOGRAPHIC TRENDS
• A labor union is an organization that represents workers and
seeks to protect their interests through collective bargaining.
• Affirmative action :Organizational programs that enhance the
status of members of protected groups.
• What about HRM laws globally?
It’s important that managers in other countries be familiar
with the specific laws that apply there.

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 EXTERNAL FACTORS THAT AFFECT THE HRM
PROCESS
• Work councils link employees with management. They are
groups of nominated or elected employees who must be
consulted when management makes decisions involving
personnel.
• Board representatives are employees who sit on a company’s
board of directors and represent the interests of the firm’s
employees.

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 DEMOGRAPHIC TRENDS
• Workforce trends in the first half of the twenty-first century will be
notable for three reasons:
(1) changes in racial and ethnic composition,
(2) an aging baby boom generation,
(3) an expanding cohort of Gen Y workers.
Gen Y, a population group that includes individuals born from
about 1978 to 1994.
➢ The oldest, most experienced workers (those born before 1946)
make up 6 percent of the workforce.
➢ The baby boomers (those born between 1946 and 1964) make
up 41.5 percent of the workforce.
➢ Gen Xers (those born 1965 to 1977) make up almost 29 percent
of the workforce.
➢ Gen Yers (those born 1978 to 1994) make up almost 24 percent
of the workforce. These and other demographic trends are important
because of the impact they’re having on current and future HRM
practices.

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 HUMAN RESOURCE MANAGEMENT(HRM)
PROCESS

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 HUMAN RESOURCE MANAGEMENT(HRM)
PROCESS
• This first phase of the HRM process involves three tasks:
➢ Human resource planning,
➢ Recruitment and Decruitment,
➢ Selection.
• The second phase of HRM uses
➢Orientation
➢ Training.
• Third phase of HRM uses
➢Employee Performance Management
➢Compensation and Benefits
➢Career Development

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 HRM PROCESS:PHASE I :IDENTIFYING AND
SELECTING COMPETENT EMPLOYEE

• Human Resource Planning:

Human resource planning is the process by which managers
ensure that they have the right number and kinds of capable
people in the right places and at the right times.
Through planning, organizations avoid sudden people shortages
and surpluses.
HR planning entails two steps:
(1) assessing current human resources,
(2) meeting future HR needs.

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 HRM PROCESS:PHASE I :IDENTIFYING AND
SELECTING COMPETENT EMPLOYEE
• CURRENT ASSESSMENT.
An important part of a current assessment is job analysis,
an assessment that defines a job and the behaviors necessary to
perform it.
➢ Information for a job analysis is gathered by directly
observing individuals on the job, interviewing employees
individually or in a group, having employees complete a
questionnaire or record daily activities in a diary, or having job
“experts” (usually managers) identify a job’s specific
characteristics.
➢ Using this information from the job analysis, managers
develop or revise job descriptions and job specifications.

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 HRM PROCESS:PHASE I :IDENTIFYING AND
SELECTING COMPETENT EMPLOYEE
• A job description is a written statement describing a job—
typically job content, environment, and conditions of
employment.
• A job specification states the minimum qualifications that a
person must possess to successfully perform a given job. It
identifies the knowledge, skills, and attitudes needed to do the
job effectively. Both the job description and job specification
are important documents when managers begin recruiting and
selecting

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 HRM PROCESS:PHASE I :IDENTIFYING AND
SELECTING COMPETENT EMPLOYEE

• MEETING FUTURE HR NEEDS.

Future HR needs are determined by the organization’s
mission, goals, and strategies.
Demand for employees results from demand for the
organization’s products or services.

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 HRM PROCESS:PHASE I :IDENTIFYING AND
SELECTING COMPETENT EMPLOYEE
• Recruitment and Decruitment:
• Recruitment :Locating, identifying, and attracting capable
applicants
• Decruitment :Reducing an organization’s workforce

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 RECRUITING SOURCES

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 RECRUITMENT
• Research has found that employee referrals generally
produce the best candidates Why?
Because current employees know both the job and the
person being recommended, they tend to refer applicants who
are well qualified. Also, current employees often feel their
reputation is at stake and refer others only when they’re
confident that the person will not make them look bad.

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 DECRUITMENT OPTIONS

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 SELECTION PROCESS
• Selection :Screening job applicants to ensure that the most
appropriate candidates are hired.
• Any selection decision can result in four possible outcomes—
two correct and two errors.
• A decision is correct when the applicant was predicted to be
successful and proved to be successful on the job, or when the
applicant was predicted to be unsuccessful and was not hired.
• In the first instance, we have successfully accepted; in the
second, we have successfully rejected.
• Reject errors can cost more than the additional screening
needed to find acceptable candidates. Why?
Because they can expose the organization to
discrimination charges, especially if applicants from
protected groups are disproportionately rejected.

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 SELECTION PROCESS
• The costs of accept errors include the cost of training the employee,
the profits lost because of the employee’s incompetence, the cost of
severance, and the subsequent costs of further recruiting and
screening.
• The major emphasis of any selection activity should be reducing the
probability of reject errors or accept errors while increasing the
probability of making correct decisions.
• Managers do this by using selection procedures that are both valid
and reliable.
• VALIDITY AND RELIABILITY. A valid selection device is
characterized by a proven relationship between the selection device
and some relevant criterion.
• Federal employment laws prohibit managers from using a test score
to select employees unless clear evidence shows that, once on the
job, individuals with high scores on this test outperform individuals
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with low test scores MG8591-Principles of Management 108
 SELECTION PROCESS
• A reliable selection device indicates that it measures the same
thing consistently.
• On a test that’s reliable, any single individual’s score should
remain fairly consistent over time, assuming that the
characteristics being measured are also stable
• Quality of fill: This measure looks at the contributions of good
hires versus those of hires who have failed to live up to their
potential.
• Five key factors are considered in defining this quality
measure: employee retention, performance evaluations,
number of first-year hires who make it into high-potential
training programs, number of employees who are promoted,
and what surveys of new hires indicate.
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 SELECTION DECISION OUTCOMES

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 TYPES OF SELECTION TOOLS

• The best-known selection tools include application forms,

written and performance-simulation tests, interviews,
background investigations, and in some cases, physical exams.
• Managers should use ones that effectively predict performance
for a given job.

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 SELECTION TOOLS

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 REALISTIC JOB PREVIEWS

• To increase employee job satisfaction and reduce turnover,

managers should consider a realistic job preview (RJP), which
is one that includes both positive and negative information
about the job and the company.
• Research indicates that applicants who receive an RJP have
more realistic expectations about the jobs they’ll be
performing and are better able to cope with the frustrating
elements than are applicants who receive only inflated
information.

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 HRM PROCESS:PHASE:II-PROVIDING
EMPLOYEES WITH NEEDED SKILLS AND
KNOWLEDGE
• orientation and training.
• Orientation: Introducing a new employee to his or her job and
the organization.
• There are two types of orientation.
➢ Work unit orientation
➢Organization orientation
•Work unit orientation familiarizes the employee with the
goals of the work unit, clarifies how his or her job contributes
to the unit’s goals, and includes an introduction to his or her
new coworkers.

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 HRM PROCESS:PHASE:II-PROVIDING
EMPLOYEES WITH NEEDED SKILLS AND
KNOWLEDGE
• Organization orientation informs the new employee about
the company’s goals, history, philosophy, procedures and rules.
It should also include relevant HR policies and maybe even a
tour of the facilities.
• Many organizations have formal orientation programs, while
others use a more informal approach .
• Successful orientation results in an outsider-insider transition
that makes the new employee feel comfortable and fairly well
adjusted, lowers the likelihood of poor work performance, and
reduces the probability of a surprise resignation only a week or
two into the job.

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 HRM PROCESS:PHASE:II-PROVIDING
EMPLOYEES WITH NEEDED SKILLS AND
KNOWLEDGE
• Employee Training: Employee training is an important HRM
activity. As job demands change, employee skills have to
change.
• Managers are responsible for deciding what type of training
employees need, when they need it, and what form that
training should take.

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 TYPES OF TRAINING

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 TRADITIONAL TRAINING METHODS

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 PHASE:III:RETAINING COMPETENT,HIGH
PERFORMING EMPLOYEES

• Employee Performance Management:

Performance management system establishes performance
standards that are used to evaluate employee performance.
How do managers evaluate employees’ performance?
Different performance appraisal methods are available to
evaluate employees performance.

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 PERFORMANCE APPRAISAL METHODS

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 WHAT DETERMINES PAY AND BENEFITS?

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 SKILL BASED PAY VS VARIABLE PAY

• Skill-based pay systems reward employees for the job skills

and competencies they can demonstrate.
• Under this type of pay system, an employee’s job title doesn’t
define his or her pay category, skills do.
• Research shows that these types of pay systems tend to be
more successful in manufacturing organizations than in service
organizations and organizations pursuing technical .
• Variable pay systems, in which an individual’s compensation
is contingent on performance.

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 CONTEMPORARY ISSUES IN MANAGING
HUMAN RESOURCES.
• These concerns include managing downsizing, sexual
harassment, work–life balance, and controlling HR costs.
• Managing Downsizing: Downsizing (or layoffs) is the
planned elimination of jobs in an organization.
• When an organization has too many employees—which can
happen when it’s faced with an economic recession, declining
market share, too aggressive growth, or poorly managed
operations—one option for improving profits is to eliminate
some of those excess workers.
• How can managers best manage a downsized workplace?
Disruptions in the workplace and in employees’ personal lives
should be expected. Stress, frustration, anxiety, and anger are
typical reactions of both individuals being laid off and the job
survivors
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 TIPS FOR MANAGING DOWNSIZING

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 MANAGING SEXUAL HARASSMENT

• Sexual harassment: Any unwanted action or activity of a sexual

nature that explicitly or implicitly affects an individual’s
employment, performance, or work environment.
• It can occur between members of the opposite sex or of the same
sex.
• Many problems associated with sexual harassment involve
determining exactly what constitutes this illegal behavior.
• The EEOC defines sexual harassment this way: “Unwelcome sexual
advances, requests for sexual favors, and other verbal or physical
conduct of a sexual nature constitute sexual harassment when this
conduct explicitly or implicitly affects an individual’s employment,
unreasonably interferes with an individual’s work performance, or
creates an intimidating, hostile or offensive work environment.”
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 MANAGING SEXUAL HARASSMENT
• What can an organization do to protect itself against
sexual harassment claims?
The courts want to know two things:
1.First, did the organization know about, or should it have
known about, the alleged behavior?
2.Secondly, what did managers do to stop it? With the number
and dollar amounts of the awards against organizations
increasing, it’s vital that all employees be educated on sexual
harassment matters.
In addition, organizations need to ensure that no
retaliatory actions—such as cutting back hours, assigning
back-to-back work shifts without a rest break, etc.—are taken
against a person who has filed harassment charges,

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 MANAGING WORK–LIFE BALANCE

• Smart managers recognize that employees don’t leave their

families and personal lives behind when they come to work.
• Although managers can’t be sympathetic with every detail of
an employee’s family life, organizations are becoming more
attuned to the fact that employees have sick children, elderly
parents who need special care, and other family issues that
may require special arrangements.
• In response, many organizations are offering familyfriendly
benefits, which accommodate employees’needs for work–
family life balance.

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 CONTROLLING HR COSTS

• EMPLOYEE HEALTH CARE COSTS.

• EMPLOYEE PENSION PLAN COSTS.

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 CAREER OPPORTUNITIES IN MANAGEMENT

• Demand for managers in small and medium-sized

organizations in the services field, particularly information and
health care services.
• A good place to land a management position can be a smaller
organization.
• Finding a Culture That Fits
➢First, figure out what suits you.
➢Try to uncover the values that drive the organization.
➢pay particular attention to the specific department or unit
where you’d work

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 CAREER OPPORTUNITIES IN MANAGEMENT
• Taking Risks:
“IYAD-WYAD-YAG-WYAG: If you always do what you’ve always
done, you’ll always get what you’ve always got! So if your life is
ever going to improve, you’ll have to take chances.” —Anonymous
• Responsible risk taking can make outcomes more predictable.
• Here are some suggestions for being a responsible, effective
risk taker in career decisions.
➢It’s important to thoroughly evaluate the risk.
➢Before committing to a career risk, consider what you
could lose or who might be hurt.
➢How important are those things or those people to you?

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 CAREER OPPORTUNITIES IN MANAGEMENT

➢ Explore whether you can reach your goal in another way, thus
making the risk unnecessary.
➢ Find out everything you can about what’s involved with taking this
career risk—the timing;
➢ The people involved; the changes it will entail;
➢ The potential gains and losses, both in the short run and the long
run.
➢ Examine closely your feelings about taking this risk: Are you
afraid? Are you ready to act now?
➢ Will you know if you have risked more than you can afford to lose?
➢ Finally, ensure your employability.
The most important thing you can do is ensuring that you have
choices by keeping your skills current and continually learning new
skills

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 CAREER OPPORTUNITIES IN MANAGEMENT

• REINVENTING YOURSELF
• The only constant thing about change is that it is constant.
• How can you reinvent yourself to deal with the demands of
a constantly changing workplace?
Being prepared means taking the initiative and being
responsible for your own personal career development rather
than depending on your organization to provide you with
career development and training opportunities, do it yourself.
Take advantage of continuing education or graduate courses at
local colleges.
Sign up for workshops and seminars that can help you
enhance your skills.
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 CAREER OPPORTUNITIES IN MANAGEMENT

• REINVENTING YOURSELF
• Upgrading your skills to keep them current is one of the most
important things you can do to reinvent yourself.
• It’s also important for you to be a positive force when faced with
workplace changes.
• If proposed change won’t work, speak up. Voice your concerns in a
constructive manner. Being constructive may mean suggesting an
alternative.
• If change is beneficial, support it wholeheartedly and
enthusiastically.
• The changes that organizations make in response to a dynamic
environment can be overwhelming and stressful. Take advantage of
these changes by reinventing yourself.

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 CAREER OPPORTUNITIES IN MANAGEMENT

• Learning to Get Along with Difficult People

➢ Getting along with difficult people takes a little bit of patience,
planning, and preparation.
➢ What you need is an approach that helps you diffuse a lot of
the negative aspects of dealing with these individuals. it helps
to write down a detailed description of the person’s behavior.
➢ Try to understand that behavior.
➢ See things from his or her perspective.

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 CAREER OPPORTUNITIES IN MANAGEMENT

• Strategies for dealing with different people

• THE HOSTILE, AGGRESSIVE TYPES.
➢ to stand up for yourself;
➢ give them time to run down;
➢ don’t worry about being polite
➢ get their attention carefully;
➢ get them to sit down;
➢ speak from your own point of view;
➢ avoid a head-on fight;
➢ be ready to be friendly.

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 CAREER OPPORTUNITIES IN MANAGEMENT
• THE COMPLAINERS.
➢ to listen attentively;
➢ acknowledge their concerns;
➢ be prepared to interrupt their litany of complaints;
➢ don’t agree, but do acknowledge what they’re saying;
➢ state facts without comment or apology;
➢ switch them to problem solving.

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 CAREER OPPORTUNITIES IN MANAGEMENT
• THE SILENT OR NONRESPONSIVE TYPES.
➢ to ask open-ended questions;
➢ use the friendly,
➢ silent stare; don’t fill the silent pauses for them in conversations;
➢ comment on what’s happening;
➢ help break the tension by making them feel more at ease.
• THE KNOW-IT-ALL EXPERTS.
➢to be on top of things;
➢listen and acknowledge their comments;
➢question firmly, but don’t confront;
➢ avoid being a counter expert;
➢ work with them to channel their energy in positive directions.

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 CAREER OPPORTUNITIES IN MANAGEMENT

• what you want from your job? Whether they do or don’t,

you should spend some time reflecting on what you want your
job to provide you.
• Then, when it’s time to do that all-important job search, look
for situations that will provide you what you’re looking for.
• How Can I Have a Successful Career?
• Understand yourself
• Protect your personal brand
• Be a team player
• Dress appropriately
• Network

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 CAREER OPPORTUNITIES IN MANAGEMENT

➢Ask for help

➢Keep your skills updated
➢Set goals and then work hard to achieve them
➢Do good work

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