August 20, 2014

Ethics in the Marketplace - Review Notes

Perfectly competitive free markets satisfy three of the moral criteria: justice, utility, and rights.

But, the virtues of loyalty, kindness, and caring will diminish, while the vices of being greedy, self-seeking, avaricious, and calculating are encouraged.


When used to secure the sale of a product, political bribery can also introduce diseconomies into the operations of markets.

The following considerations are relevant to judging bribery issues.

1. Is the offer of payment initiated by the payer or demanded by the payee with the threat of injury to the payer. If the payee demands payment and the threatened injury is large enough, the payer may not be morally responsible for his payment, or the moral responsibility may at least be diminished.

2. If the payment is made to induce the payee to act against official rules, the payer is a party to immoral act. But if the payment is done to induce the party to do his official duty only, the moral responsibility if diminished.

3. There are cases where it is a local custom to make payments in the normal course of things, then it would appear to be ethically permissible on utilitarian grounds. But it might be a legal violation of the Foreign Corrupt Practices Act of 1977, USA)


Business Ethics: Concepts and Cases, Fourth Edition, Manuel Velasquez, Prentice Hall International

August 7, 2014

Leading - Introduction - Koontz, O'Donnell, Weirich, Kannice

The managerial process of leading is defined as the process of influencing people so that they will contribute to organization and group goals.

Is the above definition comprehensive and capture all activities of leading function. According to me the definition does not capture all facets of leading function.

We have to remember we are explaining the whole process of managing in five steps. Planning, organizing, staffing (resourcing), leading and control. It is during the phase of leading that staff are actually told what is expected of them in next year, next five years or next ten years. The mission, objectives, vision and goals of the company are communicated to them.It means plans are to be communicated and many of the plans or budgets have to be clear. Resources are actually allocated and put under control of some people during the leading stage. Actions that come out of the control stage are implemented through leading function.

So the managerial function of leading is much broader than the process of leading examined in organizational behavior texts.

Koontz et al. clarify this by saying there is more to managing than just leading. Leading is an essential function of managers. Managing involves planning the result of the organization, setting up the organization structure with technology, facilities and people, acquiring various equipment and staff who are competent and controlling activity to correct deviations from the plans during the execution stage.

In the area of leading, behavioral sciences make a major contribution to managing.

Behavioral or Human Factors in Managing

The individuals who join organizations have needs and objectives that important to them and to achieve them only they join organization. Managers, in the function of leading have to ensure that each role in the organization contributes to the aim of the enterprise and also satisfies the needs and objectives of the individual who performs the role. Managers need to have an understanding of multiple roles that people play in society, the individuality of people, and the personalities of people.

Multiplicity of Roles

Both managers and people working in their organizations are members of a broad social system which has a tradition of human dignity and also membership in multiple groups with different descriptions of roles.

No Average Person

In the organization policies are designed for all persons assuming that they are alike. Even though, not all the needs of individuals can be satisfied by an organization, managers need to have latitude in making individual arrangements. There is need to fit the job to the specific person doing the job to some extent.

The importance of Personal Dignity

In an organization, the actions of managers should not violate the dignity of people. The concept of individual dignity means that people must be treated with respect, no matter what their position in the organization.

Consideration of The Whole Person

A person has knowledge, attitudes, skills and personality traits. Each person has a separate bundle. The human being is influenced by external factors and reacts to them quickly and unpredictably. People cannot come to an organization for work, forgetting many other things that are impacting them. Managers have to recognize that whole person is coming into the organization and be prepared to deal with them.

Weirich and Koontz, 10 Edition

Related topics

The Nature and Purpose of Planning
The Nature of Organizing
Resourcing - A Function of Management
Leading - Introduction
Planning and Execution - Theory and Practice
The System and Process of Controlling

August 6, 2014

Manager and Organization Development

Important Points from Weihrich, Cannice, and Koontz   - Koontz and O'Donnell - Management Textbook

The term manager development refers to long-term, future oriented programs and the progress a person makes in learning how to manage. Managerial training, on the other hand, pertains to the programs that facilitate the learning process and is mostly a short-term oriented activity to help managers do their jobs better. Organization development is a systematic, integrated and planned approach to improving the effectiveness of groups of people and of whole organization or a major organizational unit. So the essential difference is that organizational development focuses on the total organization or a segment of it, while manager development concentrates on individuals.

Manager Development

For each manager, the needs of present job, next job and future jobs are to be considered in arranging training and development courses and opportunities for him.

On the job training, planned progression information, job rotation, creation of assistant-to positions, temporary promotions, committee memberships, coaching, conference participation, training program participation etc. are the development avenues.

Organizational Development

OD is a systematic, integrated, and planned approach to improving enterprise effectiveness and efficiency. Defined in this manner, organization development can look at problems in the area of technical skills of the organization, human behavior skills of the organization, business conceptual skills of the organization or its solution design skills. But in practice and the way OD subject has developed, it tends to focus on behavioral issues. Hence the typical problems diagnosed by OD practitioners are lack of cooperation, excessive decentralization or centralization, poor communication etc. The techniques of OD include laboratory training, managerial grid training, and survey feedback. Some OD practitioners also included team building, job enrichment, organizational behavior modification, job design, stress management, career and life planning, and management by objectives as part of their techniques of OD.

The Learning Organization

A learning organization is one that can adapt to changes in the external environment through continuous renewal of its structure and practices.  Peter Senge propose five major ideas as part of developing learning organization.

Systems thinking - An organization has to interact with the environment. Hence it has to understand the environment and make itself to survive environmental changes.

Personal mastery

Mental models

A shared vision

Team learning

David Garvin offers the following definition:  A learning organization is an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.

Acquiring knowledge is not enough;  knowledge has to be applied. Unless behavior is changed creating, acquiring and transferring knowledge have no value to the organization.  Only change in behavior is to be counted as completed learning.

Updated on 6 Aug 2014, 11 Dec 2011

Human Resource Management and Selection

This chapter and subsequent chapters on topic of staffing are not comprehensively covered chapters. Koontz and O'Donell tried to give emphasis to dimension of managers ignoring the important frontline operators. I need to read other books on principles of management to see if they provided any content on staffing of operators.

Staffing is defined as filling and keeping filled positions in the organization structure.

The managerial function of staffing is defined as filling, and keeping filled, positions in the organization structure. This is done by identifying work-force requirements, inventorying the people available, and recruiting, selecting, placing, promoting, appraising, planning the careers of, compensating, and training or otherwise developing both new employees and current job holders so that they can accomplish their tasks effectively and efficiently. Staffing is closely linked to organizing, the setting up of intentional structures of roles and positions. As the organization chart is feasible only when it can be staffed or filled.

Most business executives  would agree that people are the most important asset of an enterprise. The development of these human resources can be managed in a  systematic manner.

In practice, usually there is little or no integration between human resource planning and other managerial functions such as enterprise  In this chapter, the authors tried provide the description of  a conceptual human resource model that integrates the various aspects of human resource planning and links them with other managerial functions.

Staffing affects leading and controlling. Well-trained managers exert leadership by creating an environment in which people, working together in groups, can achieve enterprise objectives and at the same time accomplish personal goals. Similarly, the selection of qualified managers also affects controlling by, for example, preventing undesirable deviations from becoming major problems.

Staffing is carried out within the enterprise. It has to consider internal factors and external environment factors. Therefore, internal factors of the firm - such as personnel policies, organizational climate, and the reward system - must be taken into account. Clearly, without adequate rewards, it is impossible to attract and keep quality human resources managers. Similarly, the external environment cannot be ignored; high technology demands well-trained, well-educated, and highly skilled managers. In fact, technology often demands a multiprofessional work force with managers trained in several professions such as engineering, physics, and mathematics. Another external factor may be a small supply of managers coupled with great demand for managers in the labor market, which may prevent an enterprise from growing at a desired rate.

Effective staffing demands a systems approach.

Enterprise Plans

For effective manpower planning, one must start with enterprise plans,  which are formulated in the planning process. In planning, opportunities for the enterprise are identified, and objectives are set. Alternative courses of action are developed, evaluated, and selected. For example, a favorable market for a new energy-saving engine may be identified. Consequently, a specific market share objective - let us say 3 percent by the end of the year - for the new product line may be considered reasonable.

This may be based on the premise that the Gross National Product will grow at certain  percent annually for a certain period in the future. To be sure, alternative product lines are also considered; but, based on the data, the energy saving vehicle is selected as having the best prospects for success. Because the enterprise operates in an uncertain environment, contingency plans are also developed. It is important, however, that planning not be done in isolation. Rather it must become an input for the staffing function. After all, the plans will have to be implemented by people, hence the importance of relating them to the human resources.

Organization Plans

In order to carry out the plans, organizational arrangements must be made. Thus, to develop the new vehicle, certain required activities are identified and grouped. For example, identification would involve outlining such activities as financing the project, designing the engine, purchasing the parts, assembling the units, analyzing potential markets, developing advertising materials, and a myriad of other details. These activities are then grouped into classifications such as engineering, manufacturing, purchasing, and marketing. Authority is then delegated to managers in these various classifications to perform the activities outlined. Finally provisions are made for vertical and horizontal integration of authority and information relationships. Clearly, the organization structure must be filled and maintained with competent managers, and this is the purpose of human resource planning.

In this connection, one must consider how far in the future an organization and staffing plan should
extend. Basically, this depends on the degree of flexibility an enterprise has, and the "commitment
principle." This principle implies that decisions should be made taking into account the time in the
future necessary to foresee the fulfillment of commitments involved in a decision made today. If, for
instance, an enterprise develops its own managers - as most firms do - fairly long-range plans are
required. On the other hand, firms that adhere to a policy of open competition will be more flexible,
because they may also fill positions with managers from outside as the needs become apparent.
Flexibility also varies with the size of the enterprise. In a large company, so many positions exist that
managers can be transferred to departments with the greatest needs.

After all, the plans will have to be implemented by people, hence the importance of relating them to the human resources.

The Management Inventory

A manpower inventory can indicate the need for proactive action to keep the higher positions in the organization filled. A manpower inventory chart is an an organization chart with managerial positions indicated and further information  with respect to the promotability of each person holding a position under him into his position. In this connection, appraisal of the abilities of managers becomes an important input for the manager inventory chart because it facilitates the assessment of knowledge, skills, and proficiency of managers. Furthermore, this chart is useful for preparing management and organization development plans to overcome deficiencies in managers and to utilize their potential.

Analysis of Needs for Managers:

The needs for managers are determined by enterprise and organization plans and,
more specifically, by the number of managers required and the number of managers available as
identified through the management inventory. These data, therefore, give rise to four demand and
supply situations, which require different emphasis in manpower actions.

With a high supply of, and a high demand for, managers, the focus is on selection, placement, and
promotion. Consequently, efforts are devoted to matching the available managers effectively with
enterprise needs.

Low supply of and a high demand for managers, on the other hand, require a different emphasis. If the
company favors internal promotions - and many firms do - special emphasis would be placed on
training and development to enlarge and improve the pool of managers, but this takes time, and
planning far in advance of actual needs is essential. For most situations, staffing should be based on
open competition for available jobs, and managers from both inside and outside the firm should
be considered. Thus, recruitment is another option. In a situation with a high demand for managers
within the enterprise, chances are that other organizations also have a high demand for managers.
Compensation, therefore, must be competitive. This is important for managers already employed by
the enterprise so that they do not leave the firm, and it is also essential for attracting managers
through the recruitment process.

A company with a high supply of  managers and a low demand has several alternatives available.  Either the firm can change plans to take advantage of the managerial assets, or it may resort to outplacement - a conscious attempt to help managers find and select other suitable employment. Layoffs, demotions, or early retirements are other alternatives.

An organization with a low supply of and a low demand for managers will give special attention to
enterprise plans because the availability of only a few managers may inhibit the firm's future growth.
Since developing managers is a long process, the company should start developing managers early if
there are prospects of changes in demand for managers in the future.

The description of four types of situation indicates  that different supply and demand situations require different emphasis on manpower actions, a fact sometimes ignored in human resource planning.

Recruitment, Selection, Placement, and Promotion

After the need for managerial personnel has been determined, a number of candidates may have to be
recruited, a process which involves attracting qualified managerial candidates to fill the organizational
roles. From these, managers or potential managers are selected by choosing the most suitable
individuals from among the candidates. The aim is to place people in positions where they can utilize
their personal strengths and, perhaps, overcome their weaknesses by getting experiences in those skills
in which they need improvement. Finally, placing a manager into a new position within the enterprise
often results in a promotion that normally involves more responsibility.

Organizations need to have policies for outside recruitment and internal promotion. The policy should provide internal persons adequate opportunity and incentive to develop themselves for moving into higher positions. But it also have to provide an option for the company to recruit an outside person when no person with the competencies is available in the company and also when a really capable person is available. Because high quality persons are an asset an organization.

Skills and Personal characteristics needed by managers

To be effective, managers need the following categories of skills: technical, human, conceptual, and design. Weirich and  Koontz mention that in addition analytical and problem solving abilities and certain personal characteristics are sought in managers.

The personal characteristics sought are:

Desire to manage
Communication skills and empathy
Integrity and honesty
Past performance as manager

In the category of skills, I advocate that conceptual skills are termed as business conceptual skills or even simply as business skills. A business skills is the ability to profitably exchange valuable assets or services. The exchange takes place between suppliers and an organization, between customers and an organization and between employees and an organization. While these are principle categories of business transactions, there are others like government, various public organizations that approach the companies for exchange of value and business skills are to be used here also. Design skills emphasize that the final managerial solution has to be synthesized from using skills in various categories.

Analytical and Problem-solving abilities:  Weirich and Koontz mention that one of the frequently mentioned skills desired of managers is analytical and problem-solving ability. Analytical skills should be used to find the needs of present customers or potential ones. Problem solving skills is to provide the products or services of the organization to the problem being faced by the potential customer (includes current customer also). This analyzing the opportunity and customer problem solving by organization's products and services would mean corporate success. In the analysis stage, managers have to recognize the emotions, needs, and motivations of the people involved in initiating the required change as well as of those who resist change.

Selection Process

Selection Criteria
Application by the candidate
Assessment centers

Orienting and Socializing New Employees

The first few days and week are crucial for integrating the new person into the organization. Orientation involves the introduction of new employees to the enterprise - its functions, tasks, and people. Although staff from the personnel department usually conduct formal programs of orientation, responsibility for orienting the new manager still rests with the superior.

Organizational socialization has three components: acquisition of work skills and abilities, adoption of appropriate role behaviors,and adjustment to the norms and values of the work group.

Updated 6 Aug 2014, 12 Dec 2011

August 1, 2014

Marketing Management Update 2014

July 2014

HBR Issue of July - August 2014 has a special focus on marketing organization.

June 2014

Evolution of Website Optimization and Design

Mastering Digital Marketing
Interview with David Edelman, Coleader, McKinsey Global  Digital Marketing Strategy Group
Video embedded in the article

Digital Volunteer Marketing
Companie have a new channel in marketing especially marketing communications. They have to identify, organize and facilitate digital volunteer marketers that take interest in their product and brand.

Your presence in social media does not deliver competitive advantage any more. You need to use it innovatively to drive marketing performance.
MIT Sloan Management Review Article

Marketing Technologist: Neo of the Marketing Matrix

Management Theory and Practice - Bulletin Board - 2014

Engineering and Management News - A Daily Publication  - Management Principles and Propositions

HBR Business Blogs -

August 2014
August Month Management Knowledge Revision

June 2014
This Management Theory Review is likely to register the one millionth page view this month. Thank you all readers and followers.
14 June 2014 - 990,284

June Month Management Knowledge Revision

Practical Leadership - MIT Course Lecture Notes

Encouraging skills education, connecting companies in the supply chain and exposing smaller firms to advanced technologies are among the six “innovative, non-partisan, and actionable ideas” proposed by a University of Virginia commission to create manufacturing jobs in small- and medium-size firms.

Opportunity for Data Processing Efficiency Improvement

Get Over Your Fear of Conflict

Managing a Negative Out of Touch Boss

Start with a theory, Not Strategy

Germany Innovation system is more broad-based than that of USA and is as productive

May 2014

Leadership Lessons from Jill Abramson

Jill Abramson's Commencement Speech on 19 May 2014

Principles of Management - Subject Update - 2014

Basic Chapter Summaries of Principles of Management Based on Koontz and O'Donnell's Book


Principles and Standards of Ethical Supply Management Conduct with Guidelines
ISM Booklet
Material may be copied and used with permission with credit given to ISM.

7 Principles of effective innovation culture change programs
Frank Mattes
1. Understand your starting point.
2. Draw energy from existing culture.
3. Know where you want to go
4. Act your way into thinking
5. Provide learning spaces
6. Arrange management alignment
7. Use easy and effective navigation tools.

March 2014
Building a Result Driven Organization: Management Lessons From the World of Football

Speaker: Mr. Ferran Soriano - Chief Executive Officer of Manchester City Football Club - United Kingdom

O the second day of The UAE Government Summit on Tuesday in a talk about 'Building a Result-Driven Organization: Management Lessons From the World of Football', Soriano, now CEO of English Premier League's Manchester City Football Club, pointed out:

"It's about common sense. The same management tools, intelligence, and hard work that you use in your business and in the public sector,"  work in football also , expounding on how, in some instances, luck does play a role in the success of a large organisation, but one has to "work very hard to have the opportunity to be in the finals."

If customers are fans, employees are a team, the leader is a coach, then any service organisation could be considered a football club -- that was the theme of Soriano's talk.

He highlighted key managerial concepts adopted by Manchester City Football Club to build a result-driven organisation and shared the key lessons learned for the government to enhance its service delivery performance.

 Soriano revealed how the English Premiere League, the biggest league in the world, is at least double the size of its nearest competitor, the German league. The two biggest clubs, Madrid and Barcelona, discovered 10 years ago that "the market was not Spain; the market is the world."

The former Barcelona FC CEO also noted four ideas from football that can be adapted to public service: a formula for a winning team, leadership, the value of having values, and when to take decisions.

For Soriano, there are two key factors in building a winning team, commitment and balance. Commitment to him is "an inner force of people who want to win. They focus and they truly want to win. You don't buy this commitment in any job with money". On the other hand, he stresses the importance of balance.

To attain and maintain this balance, Soriano says that everyone needs to know what he needs to do and accept this. This may be difficult for stars or seniors, but to succeed, this commitment is what it takes to maintain balance.

As far as leadership, Soriano believes that "you have to choose your leadership style depending on what your team needs," noting that though it is counter-intuitive, it is necessary and that you should make your choice dependent on the levels of commitment and talent of your team and organisation.

He also illustrated three archetypes of players or colleagues, celebrating the visionary who takes risks, appreciating the value of the prudent realist while recognising the necessity of the doer willing to sacrifice for, and carry the team.

The City FC CEO believes that an organisation needs to have fundamental values -- simple ideas that need to be inculcated into all levels of the organisation.

Listen to the whole talk of one hour and twenty two minutes.



Managing for Net Profit and Productivity

Clayton Christensen highlighting the idea that managers are not focusing net profits that are residual after all the costs are deducted from the revenues. The second idea is that managers are not giving adequate attention to cost cutting through productivity improvement and because of that established companies are being threatened by disruptive innovations that are coming with low price/cost products.

Presentation on 11 June 2013 at Said School of Business

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