Introduction to
Management
Chapter 5
SWOT Analysis
SWOT Analysis can be defined as a
planning exercise in which managers
identify internal organizational
Strengths (S) and Weaknesses (W)
and external environmental
Opportunities (O) and Threats (T).
SWOT Analysis
Based on a SWOT Analysis, managers at the
different levels of the organization select the
corporate, business and functional level
strategies to best position the organization to
achieve its mission and goals.
SWOT Analysis - Steps
The first step in SWOT
Analysis is to identify an
organization's strengths
and weaknesses.
The task facing managers is
to identify the strengths
and weaknesses that
characterize the present
state of the organization.
SWOT Analysis - Steps
The second step in SWOT Analysis begins
when managers embark on a full-scale
SWOT planning exercise to identify potential
opportunities and threats in the environment
that affect the organization at the present or
may affect it in the future.
Importance of SWOT
Analysis
With the SWOT Analysis completed, and
strengths, weaknesses, opportunities and
threats identified, managers can continue the
planning process and determine specific
strategies for achieving the organization's
mission and goals. The resulting strategies
should enable the organization to attain its
goals by taking advantage of opportunities,
countering threats, building strengths and
correcting organizational weaknesses.
Importance of Social
Responsibility
The way a company's managers and
employees view their duty or obligation to
make decisions that protect, enhance and
promote the welfare and well-being of
stakeholders and society as a whole. Without
being socially responsible, the company
builds up a bad reputation and loses
important clients.
Authority
Authority is the power to hold people
accountable for their actions and to make
decisions concerning the use of
organizational resources.
The hierarchy of authority is an organization's
chain of command - the relative authority that
each manager has. Every manager, at every
level of the hierarchy, supervises one or more
subordinates.
Centralization Vs Decentralization
of Authority
Centralization: The concentration of
authority at the top of the managerial
hierarchy.
Decentralization: Giving lower-level
managers and non-managerial
employees the right to make
important decisions about how to use
organizational resources.
Centralization Vs Decentralization
of Authority
Decentralizing authority allows an organization
and its employees to behave in a flexible way
even as the organization grows and becomes
taller. BUT, too much decentralization has
certain disadvantages:
a) If division, functions, or teams are given too
much decision-making authority, they may
begin to pursue their own goals at the
expense of organizational goals.
Centralization Vs Decentralization
of Authority
b) Also too much decentralization can result in
a lack of communication among functions or
divisions.
Top managers must seek the balance between
centralization and decentralization of
authority!
HUMAN RESOURCE
MANAGEMENT
Activities that managers engage in to
attract and retain employees and to
ensure that they perform at a high
level and contribute to the
accomplishment of organizational
goals.
Components/Functions of
HRM System
• Recruitment and Selection
• Training and Development
• Labor and Benefits
• Pay and Benefits
• Performance Appraisal and
Feedback
Recruitment and Selection
Recruitment: Activities that managers engage
in to develop a pool of qualified candidates
for open positions.
Selection: The process that managers use to
determine the relative qualifications of job
applicants and their potential for performing
well in a particular job.
Important Activities of
Recruitment and Selection
1) Human Resource Planning: Activities that
managers engage in to forecast their current
and future needs for human resources.
2) Job Analysis: Second important activity
where HR department is identifying the tasks,
duties and responsibilities that make up a job
and the knowledge, skills and abilities
needed to perform the job.
Important Activities of
Recruitment and Selection
A job analysis can be done in a number of ways, including
observing current employees as they perform the job or
interviewing them. Often managers rely on
questionnaires compiled by jobholders and their
managers.
After managers have completed human resource planning
and job analyses for all jobs in an organization, they will
know their human resource needs and the jobs they
need to fill. They also know the knowledge, skills, and
abilities that potential employees need to perform those
jobs. At this point, recruitment and selection can begin.
Important Activities and
Recruitment Selection
3) External and Internal Recruitment:
External: When managers recruit externally to
fill open positions, they look outside the
organization for people who have not worked
for the organization previously.
Means for external recruitment: advertisements
in newspapers, magazines and websites,
career fairs at colleges etc.
Important Activities and
Recruitment Selection
Internal: When recruiting is internal, managers
turn to existing employees to fill open
positions. Employees recruited internally are
either seeking lateral moves (job changes
that entail no major changes in responsibility
or authority levels) or promotions.
Advantages of internal recruitment:
Internal applicants are already familiar with
the organization.
•
Important Activities and
Recruitment Selection
• Managers already know the candidates; they
•
•
have considerable information about their
skill, abilities and behavior at work.
Internal recruitment can help boost levels of
employee motivation and morale, both for
the employee who gets the job and for other
workers.
Finally, internal recruiting is normally less
time-consuming and expensive than external
recruiting.
Important Activities and
Recruitment Selection
4) The Selection Process:
Once managers develop
a pool of applicants for
open positions through
the recruitment process,
they need to find out
whether each applicant is
qualified for the position
and likely to be a good
performer.
Important Activities and
Recruitment Selection
The selection process has several selection
tools to help sort out the relative qualifications
of job applicants and appraise their potential
for being good performers in a particular job.
Selection Tools:
a) Background Information
b) References
c) Paper-and-Pencil Tests (Ability and
Personality Tests)
Important Activities and
Recruitment Selection
d) Physical Ability Tests (eg for firefighters)
e) Performance Tests (Performance on actual
job tasks)
f) Interviews (Structured interview: Managers
ask each applicant the same standard
questions. Unstructured interview: Proceeds
more like an ordinary interview.)
Training
Training: Teaching organizational members how to
perform their current jobs and helping them
acquire the knowledge and skills they need to be
effective performers.
Types of Training:
a) Classroom Instruction: Through classroom
instruction, employees acquire knowledge and
skills in a classroom setting. This instruction can
take place within the organization or outside it,
such as courses at local colleges and
universities.
Training
b) On-the-job Training: Learning occurs in the
work setting as employees perform their job
tasks. This kind of training can be provided
by coworkers or supervisors or can occur
simply as jobholders gain experience and
knowledge from doing the work.
Development
Development: Building the knowledge and skills
of organizational members so that they are
prepared to take on new responsibilities and
challenges.
Types of Development(Beside the two types of
training mentioned before):
a) Varied Work Experiences :Top Managers
need to develop an understanding of, and
expertise in, a variety of functions, products
and services, and markets.
Development
To develop executives who will have this
expertise, managers frequently make sure
that employees with high potential have a
wide variety of different job experiences. This
can broaden employees' horizons and help
them think more about the big picture.
b) Formal Education: Many large organizations
reimburse employees for tuition expenses
they incur while taking college courses and
obtaining advanced degrees.
Performance Appraisal
and Feedback
Performance Appraisal: The evaluation of
employees' job performance and
contributions to their organization.
Performance Feedback: The process through
which managers share performance
appraisal information with subordinates, give
subordinates an opportunity to reflect on their
own performance and develop, with
subordinates, plans for the future.
Performance Appraisal
and Feedback
Types of Performance Appraisal:
a) Trait Appraisals: Managers assess subordinates
on personal characteristics that are relevant to
job performance like skills.
b) Behavioral Appraisals: Managers assess how
workers perform their jobs - the actual actions
and behaviors that workers exhibit on the job.
c) Result Appraisals: For some jobs, how people
perform the jobs is not as important as what they
accomplish or the results they obtain.
Performance Appraisal
and Feedback
d) Objective and Subjective Appraisals:
Whether managers appraise performance in
terms of traits, behaviors or results the
information they assess is either objective or
subjective. Objective appraisals are based on
facts and are likely to be numerical,
Subjective appraisals are based on
manager's perceptions of traits, behaviors or
results.