Unit 1 – Notes Foundations of Management The Management Process The ultimate “bottom line” in every manager’s job is to succeed in helping an organization achieve high performance by well utilizing all of its human and material resources. If productivity in the form of high levels of performance effectiveness and efficiency is a measure of organizational success, managers are responsible for ensuring its achievement. It is their job to successfully mobilize technology and talent by creating work environments within which others work and perform to the best of their abilities. Functions of Management All mangers in daily events must have the capabilities to recognize performance problems and opportunities, make good decisions, and take appropriate action. They do this through the process of management: 1. 2. 3. 4. Planning Organizing Leading Controlling Planning Setting performance objectives and deciding how to achieve them Controlling Measuring performance and taking action to ensure desired results The Management Process Leading Inspiring people to work hard to achieve high performance Organizing Arranging tasks, people, and other resources to accomplish the work Leadership Power An essential part of leadership or management is to influence the people you manage so that they do what you want them to do. The influence of a leader will depend on a variety of factors including their personality and of those around them. For the purposes of this article we will refer to the people that the leader is managing or leading as followers. The influence of a leader over his followers is often referred to as power. Below we will explore the different types of power a leader may have. Reward Power This type of influence is created when the leader is able to offer a reward to his followers for completing tasks/behaving in a certain manner. Rewards in the workplace can take a variety of forms from chocolates, gift vouchers and holidays to promotions, commission and pay rises. Coercive Power This is the opposite of reward power because this power is based on the leader having control over what happens if followers do not act as required. If followers do not undertake the action required, the leader will impose a penalty. Penalties take a variety of forms including withdrawal of privileges, job losses, verbal abuse, and delayed or loss of promotion. In all cases the leader will need to choose the penalty carefully to prevent breaking the law or being the subject of an employment tribunal. Legitimate Power This is the power that a leader has when the followers believe that the leader has “a right” to instruct them and that they have an obligation to follow instructions. Sometimes legitimacy power is created by the leader’s job title (such as captain, doctor, or area manager), combined with the follower’s belief that the job title gives the leader the right to give them orders. Referent Power Referent power is individual power based on a high level of identification with, admiration of, or respect for the powerholder. Nationalism, patriotism, celebrities and well-respected people are examples of referent power in effect. Expert Power As the title suggests a leader has expert power when the followers believe that the leader has “expert” knowledge or skills that are relevant to the job or tasks they have to complete. Often an experienced member of the team or staff in an organization can have expert power even though they are not a supervisor or manager. Summary As can be seen each of the powers is created by the followers belief, if the follower does not hold the requisite belief than then the leader is not able to influence them. Issues of Ethics and Social Responsibility Ethics in Organizations Ethics are an individual’s personal beliefs regarding right and wrong behaviour. Ethical behaviour conforms to generally accepted social norms Unethical behaviour does not conform to generally accepted social norms Much of business is based on factual and practical manners, but there are times when managers have to deal with more abstract concerns. Rather than asking how a manager performs a job we have to ask ourselves the following questions: o Should this be done? o Is it good or bad? o Is it right or wrong? Formation of Personal Ethics Family Influences – Individuals start to form their ethics as children Peer Influences – Your friends influence your ethics Personal Values and Morals - the items that people value and the morals by which they live Life Experiences – experiences also shapes lives and, ultimately, ethics. Situational Factors –factors that arise, often unexpectedly, may influence a person’s ethics. Managerial Ethics How Employees Treat the Organization o The ethical standards of an individual may conflict with the organization’s policies How the Organization Treats Other Economic Agents o Managers also must have ethical standards when dealing with others. It is important to supply truthful communications with others in order to behave ethically Ethics in an Organizational Context Unethical behaviour by mgmt and other employees sometimes occurs because the firm appears to support such behaviour. Employees, who work for firms that support and encourage unethical acts, may find themselves in a conflict-of-interest situation. Managing Ethical Behaviour Top managers are responsible for setting the ethical standards for an organization o Committees can be set up to investigate unethical activities o A code of ethics is a formal written statement of the values and standards that guide the firm Organizational Constituents These include customers, employees, the local community, and creditors, just to name a few Any firm that ignores one of its constituents is asking for trouble Social Responsibility & Organizations The Natural Environment o laws regulate what a company can go with respect to the environment. Previously, companies dumped sewage, and waste products anywhere they could. General Social Welfare o Organizations also can promote the social welfare by contributing to charities. The Government & Social Responsibility Direct Regulation o the establishment of laws that dictate what businesses can and cannot do Indirect Regulation o Finding ways to influences firms to act in a responsible way without laws. o One way is to change the tax structure to make them act in a way that the government thinks is socially acceptable Does a Business have a Social Responsibility? Yes In the eyes of the law a corporation is an artificial person and therefore has certain responsibilities It uses air, water and land, therefore it must use the resources in a careful manner If business accepts it responsibilities then the gov’t will keep rules to a min. Some firms, (GM, IBM) are bigger than many nations and with that comes responsibility No A business is an economic institution & not a social one & its primary responsibility to the shareholder It should focus on maximizing profits Social obligations are discharged through taxes Money spent on social goods takes away from profits & puts you at a disadvantage Politicians have a mandate to decide on what social projects are desirable not managers Managing Social Responsibility Organization Leadership & Culture o The leadership practices of an organization can define the social responsibility adopted by an organization Whistle Blowing o Occurs when an employee discloses illegal conduct by others within the organization Ethics in the Workplace Cultural Relativism Ethical Imperialism No culture’s ethics are superior. The values and practices of the local setting determine what is right or wrong Certain absolute truths apply everywhere. Universal values transcend cultures in determining what is right or wrong. “When in Rome, do as Romans do.” “Don’t do anything you wouldn’t do at home.” How to make tough Ethical Calls The Mirror Test o Ask yourself “What kind of person do I want to see when I shave… or put lipstick on in the morning.” The Sleep Test o How well do you sleep at night? Can you answer the following questions? o Is it legal? o If someone else did it to you would you think that it is fair? o Would you be content if it appeared on the front-page of the Ottawa Citizen? o Would you like your mother to see you do it? If you can answer ‘yes’ to all 4 of these questions then whatever you are about to do is probably ethical.