FOUNDATIONS OF DECISION-MAKING
Table of Contents
FOUNDATIONS OF DECISION-MAKING ................................................. Error! Bookmark not defined. Describe the decision-making process pp.62-66 .............................. Error! Bookmark not defined. Explain the three approaches managers can use to make decisions pp.67-70 Error! Bookmark not defined. Describe the types of decisions and decision-making conditions managers face pp.7073 ............................................................................................................ Error! Bookmark not defined. Discuss group decision–making pp.73-75 .......................................... Error! Bookmark not defined. Discuss contemporary issues in managerial decision-making pp.76-78 ..... Error! Bookmark not defined. Define group and describe the stages of group development pp.246-248 .. Error! Bookmark not defined. Describe the major concepts of group behaviour pp.248-251 ......... Error! Bookmark not defined. Discuss contemporary issues in managing teams pp.259-261 ........ Error! Bookmark not defined. FOUNDATIONS OF DECISION-MAKING SUMMARY: ............................ Error! Bookmark not defined. FOUNDATIONS OF PLANNING ................................................................ Error! Bookmark not defined. Discuss the nature and purpose of planning p.90-92 ........................ Error! Bookmark not defined. Explain what managers do in the strategic management process p.93-98 . Error! Bookmark not defined. Compare and contrast approaches to goal setting and planning p.98-107 . Error! Bookmark not defined. Discuss contemporary issues in planning p.107-108 ........................ Error! Bookmark not defined. FOUNDATIONS OF PLANNING SUMMARY ............................................ Error! Bookmark not defined. FOUNDATIONS OF ORGANISING ............................................................ Error! Bookmark not defined. Describe the six key elements in organisational design p.118-127 . Error! Bookmark not defined. Identify the contingency factors that favour either the mechanistic model or the organic model of organisational design p.127-129 .......................................... Error! Bookmark not defined. Describe the key components of the human resources management process and the important influences on that process p.152-154 ............................... Error! Bookmark not defined. Discuss techniques for stimulating innovation p.186-190 ................ Error! Bookmark not defined. Define organisational change and compare the contrast views on the change process p.190-195................................................................................................ Error! Bookmark not defined. FOUNDATIONS OF ORGANISING SUMMARY ........................................ Error! Bookmark not defined. FOUNDATIONS OF BEHAVIOUR .............................................................. Error! Bookmark not defined. Identify the focus and goals of organisational behaviour p.212-213 Error! Bookmark not defined. Explain the role that attitudes play in job performance p.213-214... Error! Bookmark not defined. Describe different personality theories p.217-223 ............................. Error! Bookmark not defined. Define and explain motivation p.274 .............................................................................................. 2 Compare and contrast early theories of motivation p.274-277 ................................................... 2 Compare and contrast contemporary theories of motivation p.277-284 ................................... 4 FOUNDATIONS OF BEHAVIOUR SUMMARY .......................................... Error! Bookmark not defined. FOUNDATIONS OF LEADING ................................................................... Error! Bookmark not defined. Define leader and leaderships p.304 ................................................... Error! Bookmark not defined. Describe modern views of leadership and the issues facing today’s leaders p.313-319 .. Error! Bookmark not defined. Discuss trust as the essence of leadership p.319-321 ...................... Error! Bookmark not defined. Describe what managers need to know about communicating effectively p.334-342 ...... Error! Bookmark not defined. FOUNDATIONS OF LEADING SUMMARY ............................................... Error! Bookmark not defined.
FOUNDATIONS OF CONTROL ................................................................. Error! Bookmark not defined. Explain the nature and importance of control p.360-361 .................. Error! Bookmark not defined. Describe the three steps in the control process p.361-366 .............. Error! Bookmark not defined. Discuss the types of controls organisations and managers use p.366-370 . Error! Bookmark not defined. Discuss contemporary issues in control p.370-375 ........................... Error! Bookmark not defined. FOUNDATIONS OF CONTROL SUMMARY ............................................. Error! Bookmark not defined.
Define and explain motivation p.274 Motivation refers to the process by which a person’s efforts are energised, directed and sustained towards attaining a goal. This definition has three key elements: energy, direction and persistence. 1. Energy is the measure of an employee’s intensity and drive. o A motivated person works hard. o However, the quality of the effort must be considered as well as its intensity. o High levels of effort don’t necessarily lead to favourable job performance. 2. All employees have to direct their effort towards achieving the organisation’s goals. 3. Employees need to persist in striving to achieve those goals. Compare and contrast early theories of motivation p.274-277 Maslow’s Theory of Motivation o Maslow's Theory of Motivation carries the belief that organisations should attempt to satisfy the level of needs that an employee lacks through a '5 step Hierarchy of Needs' that orders human needs in order of relative importance. o His theory states that employees are motivated through satisfying needs in a sequential order in order from importance, from basic needs such as shelter and pay (physiological needs) to higher order needs such sense of fulfilment (self-actualisation needs). o Maslow emphasised that all employees have needs and will be motivated to achieve those needs. o Only once a need has been satisfied can the employee be motivated by the next need. o Needs that are not satisfied, motivate or influence behaviour however needs that are satisfied do not motivate behaviour. o The 5 stages of the Hierarchy of Needs are 'Physiological needs' which are basic survival needs such as satisfactory payment for survival; 'Safety and Security needs' which are physical and emotional needs such as job security; 'Social and Belonging needs' such as having love, affection and being empowered within the business and having good relationships with management; 'Esteem needs' which is being respected and having a sense of accomplishment such as having a job title and 'Selfactualisation needs' which refer to fulfilling potential and personal growth such as challenging work. Maslow's Hierarchy of Needs 1. Physiological needs: Basic survival needs such as food and water & satisfactory payment for survival. 2. Safety and Security needs: Physical and emotional needs such as safe working conditions and job security. 3. Social/Belonging needs: Love, affection, sense of wellbeing and belonging such as employees being involved in decision making, being empowered and having good relationships with management and work. (e.g. Team building) 4. Esteem needs: Respect and having a sense of accomplishment such as having
responsibilities, promotion and recognition or a 'job title'. 5. Self-actualisation needs: Fulfilling potential, personal growth and development. Challenging work allows creativity and opportunities for personal growth and advancement. Lower Order Needs = extrinsic needs (fair pay and safe working conditions) Higher Order Needs = intrinsic needs (fulfilling potential) Advantages: • Managers can identity the levels of needs that their employees may see as unfulfilled and apply different strategies to satisfy these needs and provide motivation. • Managers have control of motivating employees Disadvantages: • Assumes that needs are satisfied in a sequential order which may not always be the case, employees may have many levels of needs rather than just one at a time. • There is no evidence to suggest that because a need is satisfied, it ceases to motivate. e.g fair pay may continue to motivate an employee throughout their employment • Employees may blame Employers if they are not motivated • Time Consuming Applying Maslow's theory to a Manager • Managers should create an environment in which employees can fulfil needs, identifying the level of needs for individual employees which remains unsatisfied • Satisfying 'needs' motivates employees; employees whose needs are met are likely to have higher job satisfaction and morale, higher labour productivity and contribute to an enhanced corporate culture •
HRM must be able to understand that employees may be at different stages of the hierarchy and implement strategies tailored to individual employees.
McClellan’s Three-Needs Theory David McClelland’s three-needs theory suggests that there are three acquired needs that motivate employees. o
These are: 1. The need for achievement (which is the drive to succeed in relation to a set of standards); 2. The need for power (which is the need to make others behave in a way that they would not have behaved otherwise); and 3. The need for affiliation (which is the desire for friendly and close interpersonal relationships).
The need for achievement has been researched the most. People with a high need for achievement aim to complete personal goals rather than aim to achieve rewards of success. They desire to do something more efficiently than it has been done before. They prefer jobs
that provide responsibility for finding solutions to problems. High achievers avoid what they think are very easy tasks or very difficult tasks. McGregor’s Theory X and Theory Y Dougal McGregor proposed an alternative theory as to what motivates people’s behaviour. Theory X is a negative view of people and assumes that employees have little ambition, dislike work, are lazy, avoid responsibility and must be forced to work to work effectively. Theory Y is a positive view and assumes employees enjoy work, accept responsibility and exercise self-direction. McGregor believed Theory Y would maximise employee motivation. However, no evidence confirms that Theory Y is the only way to motivate employees. Herzberg's Theory of Motivation Herzberg's Theory of Motivation carries the belief that factors which influence motivation could be grouped into two, lower order needs known as hygiene factors and higher order needs known as motivation factors. Hygiene Factors are lower level needs such as job security, working conditions and fair pay. Failure to meet these needs may inhibit motivation and result in job dissatisfaction, but achievement of these factors themselves do not motivate employees. Motivation Factors are higher order needs such as achievement, recognition and chance for personal development. Achievement of these needs may motivate employees however failure to meet these needs will not cause dissatisfaction. Applying Herzberg's theory to a manager • Managers must initially identity and satisfy 'Hygiene Factors' to prevent dissatisfaction from employees • Then, more focus can be placed on motivating factors such as achievement and recognition that may promote motivation in employees. Advantages • Employee is in control of hygiene factors so they can ensure dissatisfaction is avoided • Suggests that employees may have multiple needs at once (a failure of Maslow) • Recognises that some 'basic' needs will not motivate employees • Allows employees to be in control of ensuring employees are satisfied Disadvantages • Employees can place blame on the employer if Hygiene Factors are not satisfied • Time Consuming Compare and contrast contemporary theories of motivation p.277-284 The current contemporary theories of motivation include: goal-setting, job design and equity and expectancy. The Goal-Setting Theory Goal-setting theory says that specific goals increase performance and difficult goals, when accepted, result in higher performance than do easy goals.
o
The specificity of a goal acts as an internal motivator. For example, when a sales rep has the task of making eight sales per day, this gives him/her a specific goal to reach.
o
Employees might not always try harder if they participate in setting of goals – some prefer to be assigned goals. However, participation is usually preferable as some employees might resist accepting difficult challenges. They are more likely to accept challenges into which they had input.
o
Self-generated feedback (where an employee monitors their own progress) has been found to be a more powerful motivator than feedback from someone else.
Three other elements influence the goal-setting theory: goal commitment, adequate self-efficacy and national culture. 1. Goal-setting theory assumes an individual is committed to the goal. Employees are more committed when the goals are made public, when the individual has an internal locus of control and when the goals are self-set rather than assigned. 2. Self-efficacy refers to an individuals’ belief that he or she is capable of performing a task. In difficult situations, people with low self-efficacy tend to reduce their effort or give up, whereas those with high-self efficacy will try harder to complete the challenge. Similarly, individuals with high self-efficacy respond to negative feedback with increased effort and motivation, whereas those with low-self efficacy are likely to reduce their effort. 3. The goal-setting theory depends on the national culture. It works well in countries like Australia/USA as these ideas align well with those cultures. It assumes subordinates will be reasonably independent, people will seek challenges and performance is considered important. Goal setting is unlikely to lead to higher employee performance in countries where cultural characteristics are not like this.
Job Design Job design can influence motivation. Managers should design jobs thoughtfully to reflect the organisation’s environment, employees’ skills and preferences. When jobs are designed as such, employees are motivated to work hard. Oldham and Hackman’s job characteristic model (JCM) describes the ways that managers can design motivating jobs.
1. Skill variety: jobs must require a variety of activities so the work can use a number of different skills. 2. Task identity: jobs must require the completion of a whole piece of work. 3. Task significance: jobs must affect the lives or work of other people. 4. Autonomy: jobs need to provide freedom, independence and discretion to the individual in scheduling the work and determining the procedures to be used in carrying it out 5. Feedback: jobs need to result in employee’s obtaining clear information about the effectiveness of their performance. The model presents three dimensions: skill variety, task identity and task significance to create meaningful work. If these three elements exist in a job, it is likely that an employee will see their job as important and worthwhile. Jobs that possess autonomy result in an employee feeling personally responsible for the jobs end result. If a job provides feedback, an employee will know how effectively they are performing. The JCM suggests it motivates when an employee learn that he or she personally has performed well on a task that he or she cares about (feedback + responsibility/autonomy + meaningfulness of job). The more this occurs, the greater the employee’s motivation. The JCM guides managers for job design for both individuals and teams. The JCM shows managers how jobs can be changed in order to improve the key job elements. They may combine tasks to increase task identity and skill variety. They might expand jobs vertically and increase autonomy. Feedback may be improved by opening feedback channels. By using JCM, managers can tailor job characteristics to individuals to make their work more rewarding.
FOUNDATIONS OF DECISION-MAKING ................................................. Error! Bookmark not defined. Describe the decision-making process pp.62-66 .............................. Error! Bookmark not defined. Explain the three approaches managers can use to make decisions pp.67-70 Error! Bookmark not defined. Describe the types of decisions and decision-making conditions managers face pp.7073 ............................................................................................................ Error! Bookmark not defined. Discuss group decision–making pp.73-75 .......................................... Error! Bookmark not defined. Discuss contemporary issues in managerial decision-making pp.76-78 ..... Error! Bookmark not defined. Define group and describe the stages of group development pp.246-248 .. Error! Bookmark not defined. Describe the major concepts of group behaviour pp.248-251 ......... Error! Bookmark not defined. Discuss contemporary issues in managing teams pp.259-261 ........ Error! Bookmark not defined. FOUNDATIONS OF DECISION-MAKING SUMMARY: ............................ Error! Bookmark not defined. FOUNDATIONS OF PLANNING ................................................................ Error! Bookmark not defined. Discuss the nature and purpose of planning p.90-92 ........................ Error! Bookmark not defined. Explain what managers do in the strategic management process p.93-98 . Error! Bookmark not defined. Compare and contrast approaches to goal setting and planning p.98-107 . Error! Bookmark not defined. Discuss contemporary issues in planning p.107-108 ........................ Error! Bookmark not defined. FOUNDATIONS OF PLANNING SUMMARY ............................................ Error! Bookmark not defined. FOUNDATIONS OF ORGANISING ............................................................ Error! Bookmark not defined. Describe the six key elements in organisational design p.118-127 . Error! Bookmark not defined. Identify the contingency factors that favour either the mechanistic model or the organic model of organisational design p.127-129 .......................................... Error! Bookmark not defined. Describe the key components of the human resources management process and the important influences on that process p.152-154 ............................... Error! Bookmark not defined. Discuss techniques for stimulating innovation p.186-190 ................ Error! Bookmark not defined. Define organisational change and compare the contrast views on the change process p.190-195................................................................................................ Error! Bookmark not defined. FOUNDATIONS OF ORGANISING SUMMARY ........................................ Error! Bookmark not defined. FOUNDATIONS OF BEHAVIOUR .............................................................. Error! Bookmark not defined. Identify the focus and goals of organisational behaviour p.212-213 Error! Bookmark not defined. Explain the role that attitudes play in job performance p.213-214... Error! Bookmark not defined. Describe different personality theories p.217-223 ............................. Error! Bookmark not defined. Define and explain motivation p.274 .............................................................................................. 2 Compare and contrast early theories of motivation p.274-277 ................................................... 2 Compare and contrast contemporary theories of motivation p.277-284 ................................... 4 FOUNDATIONS OF BEHAVIOUR SUMMARY .......................................... Error! Bookmark not defined. FOUNDATIONS OF LEADING ................................................................... Error! Bookmark not defined. Define leader and leaderships p.304 ................................................... Error! Bookmark not defined. Describe modern views of leadership and the issues facing today’s leaders p.313-319 .. Error! Bookmark not defined. Discuss trust as the essence of leadership p.319-321 ...................... Error! Bookmark not defined. Describe what managers need to know about communicating effectively p.334-342 ...... Error! Bookmark not defined. FOUNDATIONS OF LEADING SUMMARY ............................................... Error! Bookmark not defined.
FOUNDATIONS OF CONTROL ................................................................. Error! Bookmark not defined. Explain the nature and importance of control p.360-361 .................. Error! Bookmark not defined. Describe the three steps in the control process p.361-366 .............. Error! Bookmark not defined. Discuss the types of controls organisations and managers use p.366-370 . Error! Bookmark not defined. Discuss contemporary issues in control p.370-375 ........................... Error! Bookmark not defined. FOUNDATIONS OF CONTROL SUMMARY ............................................. Error! Bookmark not defined.
Define and explain motivation p.274 Motivation refers to the process by which a person’s efforts are energised, directed and sustained towards attaining a goal. This definition has three key elements: energy, direction and persistence. 1. Energy is the measure of an employee’s intensity and drive. o A motivated person works hard. o However, the quality of the effort must be considered as well as its intensity. o High levels of effort don’t necessarily lead to favourable job performance. 2. All employees have to direct their effort towards achieving the organisation’s goals. 3. Employees need to persist in striving to achieve those goals. Compare and contrast early theories of motivation p.274-277 Maslow’s Theory of Motivation o Maslow's Theory of Motivation carries the belief that organisations should attempt to satisfy the level of needs that an employee lacks through a '5 step Hierarchy of Needs' that orders human needs in order of relative importance. o His theory states that employees are motivated through satisfying needs in a sequential order in order from importance, from basic needs such as shelter and pay (physiological needs) to higher order needs such sense of fulfilment (self-actualisation needs). o Maslow emphasised that all employees have needs and will be motivated to achieve those needs. o Only once a need has been satisfied can the employee be motivated by the next need. o Needs that are not satisfied, motivate or influence behaviour however needs that are satisfied do not motivate behaviour. o The 5 stages of the Hierarchy of Needs are 'Physiological needs' which are basic survival needs such as satisfactory payment for survival; 'Safety and Security needs' which are physical and emotional needs such as job security; 'Social and Belonging needs' such as having love, affection and being empowered within the business and having good relationships with management; 'Esteem needs' which is being respected and having a sense of accomplishment such as having a job title and 'Selfactualisation needs' which refer to fulfilling potential and personal growth such as challenging work. Maslow's Hierarchy of Needs 1. Physiological needs: Basic survival needs such as food and water & satisfactory payment for survival. 2. Safety and Security needs: Physical and emotional needs such as safe working conditions and job security. 3. Social/Belonging needs: Love, affection, sense of wellbeing and belonging such as employees being involved in decision making, being empowered and having good relationships with management and work. (e.g. Team building) 4. Esteem needs: Respect and having a sense of accomplishment such as having
responsibilities, promotion and recognition or a 'job title'. 5. Self-actualisation needs: Fulfilling potential, personal growth and development. Challenging work allows creativity and opportunities for personal growth and advancement. Lower Order Needs = extrinsic needs (fair pay and safe working conditions) Higher Order Needs = intrinsic needs (fulfilling potential) Advantages: • Managers can identity the levels of needs that their employees may see as unfulfilled and apply different strategies to satisfy these needs and provide motivation. • Managers have control of motivating employees Disadvantages: • Assumes that needs are satisfied in a sequential order which may not always be the case, employees may have many levels of needs rather than just one at a time. • There is no evidence to suggest that because a need is satisfied, it ceases to motivate. e.g fair pay may continue to motivate an employee throughout their employment • Employees may blame Employers if they are not motivated • Time Consuming Applying Maslow's theory to a Manager • Managers should create an environment in which employees can fulfil needs, identifying the level of needs for individual employees which remains unsatisfied • Satisfying 'needs' motivates employees; employees whose needs are met are likely to have higher job satisfaction and morale, higher labour productivity and contribute to an enhanced corporate culture •
HRM must be able to understand that employees may be at different stages of the hierarchy and implement strategies tailored to individual employees.
McClellan’s Three-Needs Theory David McClelland’s three-needs theory suggests that there are three acquired needs that motivate employees. o
These are: 1. The need for achievement (which is the drive to succeed in relation to a set of standards); 2. The need for power (which is the need to make others behave in a way that they would not have behaved otherwise); and 3. The need for affiliation (which is the desire for friendly and close interpersonal relationships).
The need for achievement has been researched the most. People with a high need for achievement aim to complete personal goals rather than aim to achieve rewards of success. They desire to do something more efficiently than it has been done before. They prefer jobs
that provide responsibility for finding solutions to problems. High achievers avoid what they think are very easy tasks or very difficult tasks. McGregor’s Theory X and Theory Y Dougal McGregor proposed an alternative theory as to what motivates people’s behaviour. Theory X is a negative view of people and assumes that employees have little ambition, dislike work, are lazy, avoid responsibility and must be forced to work to work effectively. Theory Y is a positive view and assumes employees enjoy work, accept responsibility and exercise self-direction. McGregor believed Theory Y would maximise employee motivation. However, no evidence confirms that Theory Y is the only way to motivate employees. Herzberg's Theory of Motivation Herzberg's Theory of Motivation carries the belief that factors which influence motivation could be grouped into two, lower order needs known as hygiene factors and higher order needs known as motivation factors. Hygiene Factors are lower level needs such as job security, working conditions and fair pay. Failure to meet these needs may inhibit motivation and result in job dissatisfaction, but achievement of these factors themselves do not motivate employees. Motivation Factors are higher order needs such as achievement, recognition and chance for personal development. Achievement of these needs may motivate employees however failure to meet these needs will not cause dissatisfaction. Applying Herzberg's theory to a manager • Managers must initially identity and satisfy 'Hygiene Factors' to prevent dissatisfaction from employees • Then, more focus can be placed on motivating factors such as achievement and recognition that may promote motivation in employees. Advantages • Employee is in control of hygiene factors so they can ensure dissatisfaction is avoided • Suggests that employees may have multiple needs at once (a failure of Maslow) • Recognises that some 'basic' needs will not motivate employees • Allows employees to be in control of ensuring employees are satisfied Disadvantages • Employees can place blame on the employer if Hygiene Factors are not satisfied • Time Consuming Compare and contrast contemporary theories of motivation p.277-284 The current contemporary theories of motivation include: goal-setting, job design and equity and expectancy. The Goal-Setting Theory Goal-setting theory says that specific goals increase performance and difficult goals, when accepted, result in higher performance than do easy goals.
o
The specificity of a goal acts as an internal motivator. For example, when a sales rep has the task of making eight sales per day, this gives him/her a specific goal to reach.
o
Employees might not always try harder if they participate in setting of goals – some prefer to be assigned goals. However, participation is usually preferable as some employees might resist accepting difficult challenges. They are more likely to accept challenges into which they had input.
o
Self-generated feedback (where an employee monitors their own progress) has been found to be a more powerful motivator than feedback from someone else.
Three other elements influence the goal-setting theory: goal commitment, adequate self-efficacy and national culture. 1. Goal-setting theory assumes an individual is committed to the goal. Employees are more committed when the goals are made public, when the individual has an internal locus of control and when the goals are self-set rather than assigned. 2. Self-efficacy refers to an individuals’ belief that he or she is capable of performing a task. In difficult situations, people with low self-efficacy tend to reduce their effort or give up, whereas those with high-self efficacy will try harder to complete the challenge. Similarly, individuals with high self-efficacy respond to negative feedback with increased effort and motivation, whereas those with low-self efficacy are likely to reduce their effort. 3. The goal-setting theory depends on the national culture. It works well in countries like Australia/USA as these ideas align well with those cultures. It assumes subordinates will be reasonably independent, people will seek challenges and performance is considered important. Goal setting is unlikely to lead to higher employee performance in countries where cultural characteristics are not like this.
Job Design Job design can influence motivation. Managers should design jobs thoughtfully to reflect the organisation’s environment, employees’ skills and preferences. When jobs are designed as such, employees are motivated to work hard. Oldham and Hackman’s job characteristic model (JCM) describes the ways that managers can design motivating jobs.
1. Skill variety: jobs must require a variety of activities so the work can use a number of different skills. 2. Task identity: jobs must require the completion of a whole piece of work. 3. Task significance: jobs must affect the lives or work of other people. 4. Autonomy: jobs need to provide freedom, independence and discretion to the individual in scheduling the work and determining the procedures to be used in carrying it out 5. Feedback: jobs need to result in employee’s obtaining clear information about the effectiveness of their performance. The model presents three dimensions: skill variety, task identity and task significance to create meaningful work. If these three elements exist in a job, it is likely that an employee will see their job as important and worthwhile. Jobs that possess autonomy result in an employee feeling personally responsible for the jobs end result. If a job provides feedback, an employee will know how effectively they are performing. The JCM suggests it motivates when an employee learn that he or she personally has performed well on a task that he or she cares about (feedback + responsibility/autonomy + meaningfulness of job). The more this occurs, the greater the employee’s motivation. The JCM guides managers for job design for both individuals and teams. The JCM shows managers how jobs can be changed in order to improve the key job elements. They may combine tasks to increase task identity and skill variety. They might expand jobs vertically and increase autonomy. Feedback may be improved by opening feedback channels. By using JCM, managers can tailor job characteristics to individuals to make their work more rewarding.
