Management Full Summary Mom

PART 1 - MANAGEMENT OF
ORGANISATIONS
CHAPTER ONE – MANAGING IN ORGANISATIONS..................................1
CHAPTER TWO – MODELS OF MANAGEMENT .........................................5
CHAPTER THREE – ORGANISATION CULTURES AND CONTEXTS.......9
CHAPTER FOUR – MANAGING INTERNATIONALLY..............................14
CHAPTER SEVEN – DECISION MAKING...................................................16
CHAPTER SEVENTEEN – TEAMS................................................................20
CHAPTER FIVE – CORPORATE RESPONSIBILITY ................................. 26
CHAPTER TEN – ORGANISATION STRUCTURE .................................... 30
Catherine Demassez du Castel

PART 1 - MANAGEMENT OF ORGANISATIONS
CHAPTER 1 - MANAGING IN ORGANISATIONS
I. Organisations
Organisation: social arrangement for achieving goals that create value.
How to create value: transforms tangible resources and the intangible resources into good and services. To
use these resources, we need competences.
§ Tangible resources: the physical assets of an organization

§ Intangible resources: the non-physical assets
§ Competences: skills and abilities that an organization uses to deploy resources (systems,
procedures…)
There are different types of organisations:
- Commercial organisations: create wealth by adding value to resources

- Non-for-profit organisations: aim to add value by educating, counselling etc. (cf:
voluntary/charitable organisations)
- Co-operatives: are owned by either the customers or the employee, which receive a share of a
profit as a dividend (usually commercial)
§ Stake holders: individuals, groups, organisations with an interest in, or who affected by what the
organization does
à Internal stakeholders: shareholders, employees etc.
à External stakeholders: the government, other people in the supply chain, customers etc.
II. Management
Management: activity of getting things done with the aid of people and other resources:
- As a universal human activity: whenever people take the responsibility for an activity and
consciously try to shape its progress and outcome
- As a role: whenever a person takes on the role of manager
§ Role: the sum of the expectations that others have about the responsibilities of a person occupying
a position.
§ Manager: someone who gets things done with the aid of people and other resources within an
organisation
Specialisations for manager:

à general manager: responsible for the performance of a distinct unit in an organisation
à functional managers: responsible for the performance of an area of technical or professional
work
à line manager: responsible for the performance of activities that directly meet customers’ needs
à project manager: responsible for managing a project
à entrepreneur: people who see opportunities in a market, and quickly mobilise the resources
to deliver the product or service profitably

CATHERINE DEMASSEZ DU CASTEL 1

Management Hierarchies:
à board of directors: elected by shareholders (or other stakeholders) to supervise the managers
à senior manager: functional or divisional heads (Usually the CEO or MD = Managing Director)
à middle manager: ensure that the first-line managers work well. Responsible for a unit within
a function
à first-line manager: supervise the people who are doing the work. They can continue to perform
the work along with their staff and sometimes only manage them
à people doing the work: people getting the work done in order to deliver the goods and services.
Within this hierarchy, 2 major communications paths are used: Board of

directors
- The reports, information and problems: inform the higher manager how the Senior
company is actually doing Managers
- The instruction, guidance and questions: answer to the reports,
Middle Managers
information and problems
First-line Managers
Management roles
à Mintzberg ten management roles
People doing the work
Category Role Activity

Informational Monitor Seek and receive information, scan reports,
maintain interpersonal contacts
Disseminator Forward information to others, send memos, make

phone calls
Spokesperson Represent the unit to outsiders in speeches a

reports
Interpersonal Figurehead Perform ceremonial and symbolic duties, receive

visitors
Leader Direct and motivate subordinates, train, advise and

influence
Liaison Maintain information links in and beyond the

organization
Decisional Entrepreneur Initiate new projects, spot opportunities, identify

areas of business development
Disturbance handler Take corrective actions during crisis, resolve

conflicts amongst staff, adapt to change
Resource allocator Decide who gets resources, schedule, budget, set

priorities
Negotiator Represent unit during negotiations with unions,

suppliers, and generally defend interests

Other roles of managers:

à As subordinate
à As worker
à As networker: Luthans advocated that
-> successful managers spent much more of their time on networking;
-> effective mangers spent most time on communication and human resources management.
It was confirmed by Wolff and Moser
§ Networking: behaviours that aim to build, maintain and use informal relationships that may help
work related to activities
§ Networking skills: several ways to build a more valuable network (by Trought): Face to Face
network
è Find ways to attend formal networking events
è Use casual conversations to seek out additional people with whom to network
è Create events that others want to attend
è Maintain as well as build, your network by keeping in touch
§ Social media networks:
è Vital to build an active online network on professional sites (cf Linkedin)
è Ensure that the image you present there is the right one for the goals you have in mind
“How managers spend their time” – Rosemary Stewart
à there is 5 profiles, based not on level or function but on how people spend their time:
- Emissaries: spent most of their time out of the organisation, meeting
customers, suppliers or contractors
- Writers: spent most of their time alone reading and writing, had the
fewest contacts
- Discussers: spent most of their time with other people and with their
colleagues
- Trouble-shooters: had fragmented work pattern, with many brief contacts,
especially subordinates
- Committee-members: had the most internal contacts, and spent much
time in formal meeting
Managers in small businesses – O’Gorman et al
Managers in small businesses move frequently from one role to another: constantly receiving reviewing and
giving information.
They spent twice as much time in non-managerial activities (8%) than the managers in bigger businesses.
Management tasks
Management tasks: the four major tasks of managers:
- Planning: set out the overall direction of the work and the
organisation
- Organising: moves abstract plans closer to reality by
deciding how allocate time and effort
- Leading: effort and commitment – influencing, motivating
and communicating
- Controlling: the task of monitoring progress, comparing it
with plan and taking corrective action
The external environment must be taken into account.

An organisation depends on its external environment for its tangible and intangible resources they need, on
the people willing (or not) to buy their goods and services, on sponsors etc.
Management context
The context influence mangers but it is also a tool for them to influence other.
Dimensions of context
Internal context The immediate context of the manager’s work; the culture, objectives; structure
technology; power; people; business processes and finance
Historical context Managers focus on the current issues; however, history influences them, being
the source of the structure within which they work. People welcome familiar
things and resist and fear change
External context The micro- and macro- environment that affect a manager’s performance
Managers and their contexts

Managers can use 3 theories to link their actions with their contexts

Determinism The external context determines an organisation’s performance – the
manager adapt to external changes and have little independence on the
direction of the business
Managerial choice The manager influence events and shape their context
Interaction When managers are influenced by, and themselves influence, the context
III. Skills
Management skills
Management skills: identifiable sets of actions that individuals perform to produce an outcome they value.
Henry Mintzberg: management skills (business & social awareness) should be added to academic theory while
learning how to be a manager. These 3 points are enhanced by, and enhance critical thinking which, according to
Brookfield, identifies the assumptions behind ideas, relates them to their context, imagines alternatives and
recognises limitations.
How to develop skill
Whetton & Cameron: individuals develop skills through 5 steps:
- Assessment: to show learners their present level of skill and motivate improvement
- Learning: to know the theory and research showing why the skill is valuable
- Analysis: to help learners see links between skills used and results achieved
- Practice: to give learners the chance to practice and adapt skills to suit the way they work
- Application: to give learners the chance to use new skills in practical situations

CHAPTER 2 – MODELS OF MANAGEMENT
I. What are models of management
Model: a complex phenomenon by identifying its major elements and relationships. Their aim is to identify
the main variable in a situation or between situations.
II. The ignorance of Models – Pfeffer and Sutton
They observed that managers ignore models for these reasons:
- Trust personal experience more than they trust research

- Prefer to use a method or solution that has worked before
- Are susceptible to consultants who vigorously promote their solutions
- Rely on dogma and myth – even when there is no evidence
- Uncritically imitate practices that appear to have worked well for famous companies
III. A manager’s frame of reference – Alan Fox
He studied the relationship between managers and employees
§ Unitary perspective: managers believe that organisations aim to develop rational ways of
achieving common interests
§ Pluralist perspective: managers believe that the division of labour in modern organisations creates
groups with different interests
§ Radical perspective: managers believe that the vertical and horizontal division of labour sustains
unequal social relations that will keep managers and employees in conflict
IV. The image of an Organisation using metaphors – Gareth Morgan
Metaphor: image used to signify the essential characteristics of a phenomenon.

Morgan identified 8 ways of seeing an organsiation:
- Machines: mechanical thinking and bureaucracies

- Organisms: recognizing how the environment affects their health
- Brains: an information-processing, learning perspective
- Cultures: a focus on belief and values
- Political systems: a view on conflicts and power
- Psychic prisons: how people can become trapped by habitual ways of thinking
- Flux and transformation: a focus on change and renewal
- Instruments of domination: over members, nations, environment

V. The competing value framework – Quinn et al.
They believe that successive models of management

complement, rather than contradict each other
- Vertical axis: the tension between flexibility and

control.
à managers seek flexibility to cope with rapid
change
- Horizontal axis: distinguishes and internal focus from
an external one.
Quinn et al. mention the fact that managers who are self-
aware of their instinctive reaction to people and situation
are more likely to use models effectively to guide what they
say and do.
a. Rational goal models

Adam Smith and Charles Babbage
They talked about the rational goal as a new type of working strategy as they applied it to new factories
Frederick Taylor
Scientific management refers to the attempt to create a science of factory production. He focused on the
relationship between the worker and machine-based production systems. He wanted to secure maximum
prosperity for employer, coupled with maximum prosperity for employee. To do so, he wanted to ensure
that worker reach state of maximum efficiency. He developed 5 principles:
- Determine the one best way of doing a task with help of scientific methods;
- Select best person to do the job so defined;
- Train, teach, develop other workers to follow defined procedures;
- Provide financial incentives;
- Centralize responsibility of planning and controlling to the manager
Frank and Lillian Gilbreth

They implemented scientific management by stating:
- How to reduce unnecessary action and fatigue

- What employers should provide
- Scientific management properly applied enables individuals to reach their potential
Operational research

Operational research (OR): scientific method of proving managers with a quantitative basis for decisions
regarding the operations under their control

b. Internal process models

Max Weber
Bureaucracy: system in which people are expected to follow precisely defined rules and procedures rather
than use personal judgment. The characteristics are:
- Rules and regulations: top managers come up with same rules and formal guidelines that coordinate
middle managers, first-line managers and employees;
- Impersonality: rules leads to impersonality which Weber believed to be good as it limits favouritism;
- Division of labour: jobs are easier to learn as everyone has one specific task
- Hierarchy: he advocated a hierarchy in which jobs were ranked by the amount of authority to make
decisions
- Authority: a system of rules, impersonality, division of labour and hierarchy forms and authority
structure;
- Rationality: using the most efficient means to achieve objectives
Bureaucratic structures and scientific techniques complemented each other and helped to control production
and impose disciplines on factory work.
Henri Fayol
Administrative management: the use of institutions and order rather than relying on personal qualities to
get things done. He came up with 14 different principles of management:
- Division of work: people should specialise in one category, it increases output.

- Authority and responsibility: the right to give orders.
- Discipline: essential for the smooth running of business.
- Unity of command: employee receives order from one superior.
- Unity of direction: one plan for a group having the same objective
- Subordination of individual interest to general interest.
- Remuneration of personnel: should be fair and afford satisfaction to both firm and personnel.
- Centralisation: question of proportion; depends on manager, subordinates, business (varies).
- Scalar chain: chain of superiors from ultimate authority to lowest rank
- Order: materials should be in the right place to minimize loss
- Equity: managers should be friendly and fair
- Stability of tenure of personnel: high employee turnover is not efficient
- Initiative: initiative of all is great source for business; managers need to leave room for initiative
- Esprit de corps: harmony to avoid unnecessary conflict.
c. Human relations Models

They recognised the limitations of the scientific management perspective
Mary Parker Follett
She saw the group as an intermediate institution between solitary individual and the abstract society. She
advocated:
- Replacing bureaucratic institutions by networks

- Enabling individuals to work in groups
- Self-governing principle to support growth of individuals
- Creating integrative unity of members
- She thought labour devalued human creativity
- Human and mechanical side should not be separated.

Elton Mayo
He tested the effect of the physical environment on the output and came to the conclusion that rather the
social situation that the physical environment can be related to an increase in output. (Response showed
close links between work and domestic life.)
The human relations approach emphasizes the importance of social processes at work. Advocates believe
that employees will work better if managers are interested in their well-being and supervise them humanely.
d. Open system model
Open system model: manager should think of their organisation not as a system but as an open system
that interacts with its environment
It links internal parts of a system (organisation) with the whole system

(outside world). Companies depend on their environment for
resources; organisations must ensure pr
ocesses and satisfy feedback loops in order to continuously receive
resources.
It is separated from its environment by the system boundary.
Subsystem are the separate but related parts that make up the total
system
§ System: a set of interrelated parts designed to achieve a

purpose
§ Feedback: the provision of information about the effects of an
activity
Socio-technical system
Socio-technical system: outcomes depend on the interaction of both the technical and social subsystems
(combining tools, machinery, techniques with people, relationships)
Contingency management
Contingency management: mangers must adapt the structure of the organization to external conditions
à It tries to identify those aspect of the environment
Complexity theory
Complexity theory: complex dynamic systems that have the capacity to organise themselves spontaneously
à Systems learn and adapt their internal experiences and from their interactions with similar systems
Complexity arises from feedback between, the parts of linked system.
Linear and Non- linear system
§ Linear system: an action lead to a predictable outcome

§ Non-linear system: an action leads to less / unpredictable outcome

CHAPTER 3 – MODELS OF MANAGEMENT
I. The organisation’s environment
- Internal environment (or context); the manager’s most

immediate context.
- Competitive environment (or context); sometimes known
as the micro-environment, it is the specific environment of
the industry.
- General environment (or context); sometimes known as
the macro-environment, all the other factors that can affect
the organizations.
All together, these form the external environment (or context).
Managers actively shape their environment by lobbying

(=persuading governments and other agencies to act in their favor.)
II. The cultures
Organisation culture: set of values, beliefs, norms and assumptions that are shared by a group and that
guide their interpretation of, and responses to, their environment.
A strong and distinct culture (= “the way we do things around here) helps to integrate individuals into the
team or organizations, and so helps performances.
Developing cultures
A shared culture guides people on how they should contribute, and following this culture strengthens it and
makes it hard to change. Culture is unique, it takes time to develop it. It is a continuous circle from shared
values, to share beliefs, to norms, to individual and group behavior to reinforcing outcomes and back to
sahred values, ...
Components of cultures
The 3 levels of culture, in other words, the degree to which an observer can see its component:
- Artefacts: the visible level, (= elements such as the language or etiquette that someone coming into
contact with a culture can observe, e.g. style, rituals, architecture,...)
- Beliefs and value (= the accumulated ideas that members hold about their work; how people make
decisions, how teams work, how they solve problems).
- Basic underlying assumptions (= being the way to work together).
Types of culture
a. The competing values framework (by Quinn et al.) shows four cultural types
- Rational goal: members value rationality and efficiency.

àThey define effectiveness in terms of economic goals that satisfy external requirements. Motivating
factors include competition and achieving goals. i.e. Large established business.
- Internal process: members focus on internal matters with the goal of making the unit efficient, stable
and controlled.

à Tasks are repetitive, methods stress specialization and rules. Motivating factors include security,
stability and order. i.e. Public authorities dislike changes.
- Human relations: people emphasis the value of informal interpersonal relations.
à They try to nurture and support members, aiming for their well-being and commitment. Motivating
factors include cohesiveness and membership. i.e. voluntary groups and small professional or creative
firms.
- Open systems: people see the external world as a vital source of ideas, energy and resources.
à They also see it as turbulent, requiring entrepreneurial leadership and flexible, responsive
behavior. Motivators are creativity and variety. i.e. start-ups and new businesses.
b. Charles Handy distinguished four cultures: power, role, task and person
Power culture: one dominant central figure strongly influences people’s activities and work. It relies on the
individual, not consensus.
- Role culture: one in which people’s activities are strongly influenced by clear and detailed job
descriptions and other formal signals as to what is expected of them.
- Task culture: one in which the focus of activity is towards completing a task or project using whatever
means are required.
à The focus is on securing resources and people as well as combining their diverse skills to a
common purpose.
- Person culture: when the individual is at the center and any structure or system is there to serve
them.
à The form is unusual – small professional, communal and artistic organizations are probably closest.
c. Multiple Cultures (by Martin)
He proposed that large organizations have multiple cultures, towards which observers take on of three
perspectives:
§ Integration: a focus on identifying consistencies, and acts that support a common goal.
§ Differentiation: a focus on conflict, identifying different and possibly conflicting views.
§ Fragmentation: a focus on the fluidity of organizations, and of changing views about events.
III. The competitive environment – Porter’s five forces
5 forces analysis: technique for identifying and listing those aspects of the five forces most relevant to the
probability of an organization at that time.
He believes that the five forces determine industry profitability, through their effects on prices, costs and
investment requirements.
Competitors: inside the

same industry
Rivals: between different

The arrow means brands (not necessarily
that if one power in the same industry)
changes, the rest
will change too.

Threat of new entrants (=potential entrants)
Factors that affect how easily new entrants can enter an industry include:
- The need for economies of scale, which are difficult to achieve quickly,
- The amount of capital investment required,
- Available distribution channels,
- Subsidies and regulations that benefit existing firms,
- Need for tangible and intangible resources that existing firms control,
- How loyal customers feel to existing firms.
Power of buyers (customers)
§ Competitors: inside the same industry

§ Rivals: between different brands (not necessarily in the same industry)
Buyers seek lower prices or higher quality at constant prices, thus forcing down prices and profitability.
Buyer power is high when:
- The buyer purchases a large part of a supplier’s output,

- There are many substitute products, allowing easy switching,
- The product is a large part of the buyer’s costs, encouraging them to seek lower prices,
- Buyers can plausibly threaten to supply their needs internally.
Threat of substitutes
Substitutes: products in other industries that can perform the same function – such as using cans instead
of bottles – and such close substitutes constrain the ability of firms to raise prices.
This threat is high when:
- Technological developments reduce the advantages of existing providers or open the way to the new
ones,
- Buyers are willing to change their habits,
- Existing firms have no legal protection for their position.
Bargaining power of suppliers
Conditions that increase the bargaining power of suppliers are the opposite of those applying to buyers. The
power of suppliers relative to customers is high when:
- There are few suppliers,

- The product is distinctive, so that customers are reluctant to switch,
- The cost of switching is high (e.g. if a company has invested in a supplier’s software),
- The supplier can plausibly threaten to extend their business to compete with the customer,
- The customer is a small or irregular purchaser.
Suppliers with high bargaining power could be aircraft manufacturer (Boeing and Airbus) or Microsoft.

Intensity of rivalry among competitors
Strong competitive rivalry lowers profitability, and occurs and when:
- There are many firms in an industry,

- There is slow market growth, so companies fight for market share,
- Fixed costs are high, so firms use capacity and overproduce,
- Exit costs are high, specialized assets or management loyalty deter firms from leaving the industry,
which prolongs excess capacity and low profitability,
- Products are similar, so customers can easily switch to other suppliers.
IV. The general environment – PESTEL
PESTEL analysis: technique for identifying and listing the Political, Economic, Socio-cultural, Technological,
Environmental and Legal factors in the general environment most relevant to an organization.
It is easy to list many forces; the importance is to recognize the ones that are likely to have a significant
effect on the organization’s performance.
The different factors are:
- Political factors: they shape what managers can and

cannot do. (e.g. taxation policies, people in the
government)
- Economic factors: how the economy affect the
organization (both the people and the government. (e.g.
IKEA in 2012 due to money shortage in the recession)
- Socio-cultural factors: demographic changes, trends,
people’s priorities (e.g. people with Alzheimer and
dementia in stores, Adidas with the Vegan Stat Smith)
- Technological factors: the company’s physical
infrastructure.
- Environmental factors: the natural resources available in an economy. (e.g. Climate change)
- Legal factors: laws that help (or not) the company. (the actual legal laws)
The list on the right represents all the factors important for managers doing business internationally:
Note: the three elements of a proposal
- The claim or conclusion: the claim answers the question “what is this about”
- The grounds or the facts and evidence to support the claim: the ‘grounds’ answers the question
‘what leads you to say that?’
- The warrant, or bridge between the claim and the grounds: the ‘warrant’ answers the question “How
does your claim connect to the grounds you’ve offered?”

V. Environment complexity and dynamism,

perceptions of environment
The table on the side represents people’s environment.

- Degree of dynamism: degree to which the PESTEL
factors remain the same or changes.
- Degree of complexity: the number and similarity of
PESTEL factors. The order of stability goes from 1 to 4.
Stakeholders and corporate governance

Stakeholders
Stakeholders: people with a legitimate claim on an organization. This claim can arise from different
contributions:
Each stakeholder is part of a nexus of implicit
and explicit contract that make up the
organization.
However, managers are unique in this
respect because of their position at the
center of the nexus of contracts. Managers
are the only group of stakeholders who enter
into a contractual relationship with ALL
other stakeholders.
Corporate governance
Corporate governance: refers to the rules and processes intended to control those responsible for managing
an organization.
Berle and Means described the dilemma facing owners who become separated from the managers they
appoint to run the business.
The principals (owners) then face the risk that managers may not act in their (the principals’) best interests:
they may take excessive investments risk for example, ... The principals are then at the disadvantage to the
agents (=managers). This is now known as the agency theory, which seeks to explain what happens when
one party (the principal, the owner) delegates work to another party (the agent, the manager).
§ Stakeholder theory: for ideas trying to explain the evolving relationship between an organization
and its stakeholders.
§ Governance systems: based on the principle that those managing an organization are accountable
for their actions and create mechanisms to do that.
Mechanism of Corporate Governance

Mallin suggests that to provide adequate oversight, governance systems require:
- An adequate system of internal controls that safeguards assets,

- Mechanisms to prevent any one person having to much influence,
- Processes to manage relationships between managers, directors, shareholders and other stakeholders,
- The ability to balance the interests of shareholders and other stakeholders,
- To encourage transparency and accountability, which investors an many external stakeholders expect.

CHAPTER 4 – MANAGING INTERNATIONALLY
I. Introduction
When expanding one’s business overseas, multiple questions arise: how to organize the overseas activities,
how, if at all, to adapt to local tastes and how to ensure
it adds value. Many overseas ventures, unfortunately,
fail and so destroy value. Managers consider not only
economic aspects of growing overseas, but also
whether the country’s legal system will protect their
investment and its political stability.
From a career point of view, international
management can mean:
- Working as an expatriate manager in another

country,
- Joining or managing an international team with
members from several countries,
- Managing a global organization whose
employees, systems and structures are truly
international in that they no longer reflect its
original, national base.
II. Socio-cultural context
Culture is distinct from human nature and from an individual’s personality, it is a collective phenomenon,
which people learned and shared in a common social environment. While humans share a common biological
feature, those in a particular society, nation or region develop a distinct culture.
Culture Diversity and Evolution

Cultures changes between societies, and not between nations.
However, nations develop institutions with a certain culture (somehow affected by the society in which it
is). Therefore, institutions cannot be understood without considering their culture, and understanding culture
presumes insight into institutions.
Culture and managing internationally

While managing internationally (whether for one company or during companies’ merges or collaboration),
it is important to balance and find a middle way for the divergences in culture.
Thomas and Inkson advocate that those working across culture should develop cultural intelligence, being
skilled and flexible about understanding a culture, and learning about it as they interact with it.
High-context and Low-context cultures
§ High-context cultures: information is implicit and where everything is together (same culture at
work and in the family)
§ Low-context cultures: information is explicit and clear (where the culture differs between families
and work areas...)

Hofstede’s comparison of national cultures
An experiment about how employees react depending on national cultures.
He concluded that culture is a collective programming of people’s minds, which influences how they react
to events. He identified five dimensions of culture and used a questionnaire to measure how people vary
between countries in their attitudes to them:
- Power distance : the extent to which the less powerful members of organisations within a country
expect and accept that power is distributed unevenly.
à A high PD show people accept inequality.
- Uncertainty avoidance: the extent to which members of a culture feel threatened by ambiguous or
unknown situations.
- Individualism/collectivism
à Individualism: a society where everyone is expected to look after themselves and themselves only
à Collectivism: a society where people are integrated into groups in order to protect and help each
other.
- Masculinity/Feminity
à Masculine: emotional gender roles are clearly distinct: men are supposed to be assertive, tough
and focused on material success, whereas women are supposed to be more modest, tender and
concerned with the quality of life
à Feminine when emotional gender roles overlap; both men and women can feel the same way.
- Long-term and Short-term orientation
à LTO: stands for the fostering of virtues orientated towards future rewards
à STO: stands for the fostering of virtues related to the past and present.
Integrating the dimensions

With these notions, nations can be brought together within some “society cultures”.
Current status
Hofstede’s work has some limitations, including:
- The small (and so possibly unrepresentative) number of respondents in some countries;

- Reducing a phenomenon as complex as a nation’s culture (whose population includes many class,
social, ethnic and religious divisions) to five dimensions;
- Basing the original sample on the employees of one global company;
- The likelihood of differences of culture within IBM.
III. Contrasting management systems
Whitley explained that despite the growth of

international trade and the growing
interdependence of business around the
world, countries varies substantially in the
way they organize economic activities:

CHAPTER 7 – DECISION MAKING
The complexity of decision making in organizations arises

from structural divisions. People at all levels and in all units
make (often independent) decisions about problems that
need fixing, and opportunities that may be worth taking.
They arise throughout the management task: inputs,
outputs and transformations. Decisions shape the plan that
guide action throughout the organization, and so have a
direct influence on whether they add value or not.
The illustration on the right show the different topics that

will be study during this chapter. Therefore, it can be used
as a summary graph.
I. Managing decisions
a. Definitions
Decision: a specific commitment to action (usually a commitment of

resources), in the form of a plan to deal with a problem.
Decision making: organizations create a plan to solve a problem
The figure on the left shows how information is at the center of the process.
It feeds to and from each of the elements in a continuous, iterative fashion.
As we deal with one element, we find new information, reconsider, revisit
an earlier element and perhaps decide on a new route to our goal.
b. Paul Nutt on ‘idea discovery’ and ‘idea imposition’
Paul Nutt distinguished an “idea discovery process”, which usually led to success, and an “idea imposition
process”, which usually led to failure.
What distinguish them is the respect of these steps: spend time understanding the claims by talking to
stakeholders to judge the strength of their views. This leads to a clearer view of the “arena of action” on
which to take a decision. Identify the forces that may block them from implementing the preferred idea, as
this helps to understand the interests of stakeholders whose support they need.
c. The formal model of decision making
- Setting goals (or objectives) – the ends

à Define the problem (and the sub-problems).
à Agree on decision criteria (= factors that are relevant in making a decision and that will help
making it. e.g. the different respective characteristics between two products.)
- Specifying what has to be done to achieve the goals – the means
à This could represent listing the available options, for example.
à Schwartz found that giving people too many options makes them uncomfortable to choose and
create stress and frustration. Sometimes a decision tree can help for these decisions (Vroom and
Yetton’s decision model)
- Implementing what has to be done
à This is the stage when the plan requires resources. This often takes longer than expected, and
depends on other people’s decisions and work.

- Monitoring progress
à The final stage is monitoring – looking back to see if the decision has resolved the problem, and
what can be learned.
Programmed and non-programmed decisions
§ Programmed (or structured) decisions:

problems that are familiar and where the
information required is easy to define and
obtain. e.g. a routine procedure (= a repetitive
decision that can be handled by a routine
approach) to decide how much stock a store
manager need to order.
à They may use a rule setting out what to do, or

not do, in a given situation or refer to a policy, which sets out general principles to follow.
§ Non-programmed (unstructured) decisions: situations that are unusual or new, and so require a
unique and new solution. It requires a custom-made solution when information is lacking or unclear.
à These decisions depend on judgement and intuition
Note: the “lower” in the level in organization represents the ‘spot’ in the company: low=employee >< CEO=top
Decision-making conditions
Decisions arise within a context whose nature, measured by the degree of certainty, risk, uncertainty and
ambiguity, materially affects the decision process.
- Certainty: describes a situation where all the

information de decision maker needs is available.
- Risk: situations where the decision maker can
estimate the likelihood of the alternative outcomes.
- Uncertainty: people are clear about their goal but
have little information about which course of action
is most likely to succeed.
- Ambiguity: situation in which the intended goals
and the best way to achieve them are uncertain and
unclear.
Decisions may also be categorized by their dependency (or not) on other decisions. People make decisions
in a historical and social context and so are influenced by the past and possibly future decisions.

Decision-making models
Thompson distinguished decisions in two dimensions:

agreement (1) and the beliefs about cause-and-effect
relationships (2). These created the following table and
models:
The following table will define and explain the different

models:
Features Rational model Administrative, Political model Garbage-can

incremental and model
intuitional models
Clarity of problem Clear problem Vague problems Conflict over goals Goals and solutions
and goal and goals are independent
Degree of certainty High degree of High degree of Uncertainty and/or Ambiguity
certainty uncertainty conflict
Available Much information Little information Conflicting views Costs and benefits
information on about costs and about costs and about costs and are unconnected at
costs and benefits benefits benefits benefits of start
alternatives alternatives
Method of choice Rational choice to Satisficing choice- Choice by Choice by

maximize benefit good enough bargaining among accidental merging
players of streams
Biases in making decisions
People use heuristics, simple rules or mental short cuts, to simplify making decisions. While they help making
decision, they do bring the danger of one or more biases.
- Prior hypothesis bias: results from a tendency to base decisions on information that supports their
beliefs and ignoring what is inconsistent.
- Representative bias: results from a tendency to generalize inappropriately from a small sample or a
single vivid event.
- Optimism bias: human tendency to see the future in a more positive light than is warranted by
experience.
- Illusion of control: source of bias resulting from the tendency of overestimate one’s ability to control
activities and events. e.g. Emilio’s bet on games.
- Escalating commitment: leads to increased commitment to a previous decision despite evidence that
it may have been wrong.
- Emotional attachment: cause by feelings and attachment to something or someone. e.g. Following your
friend’s advice rather than a different advice that has been given to you multiple times.

Group decision making

Vroom and Yetton’s decision model
Vroom and Yetton’s: influence one’s decision making process by facilitating it.
à It distinguished 5 leadership styles, not one better than the other, as well as seven characteristics.
à By being able to change leadership style depending on the different factors, by being flexible, is what
Vroom and Yetton believed to be a good decision-making leader.
The five leadership styles defined are:
- AI (Autocratic): You solve the problem or make the decision yourself using information available to
you at that time.
- AII (Information-seeking): You obtain the necessary information from you subordinate(s), then decide
on the solution to the problem yourself.
- CI (Consulting): You share the problem with relevant subordinates individually, getting their ideas
and suggestion without bringing them together as a group. Then you make the decision that may or
may not reflect your subordinates’ influence.
- CII (Negotiating): You share the problem with your subordinates as a group, obtaining their collective
ideas and suggestions. Then you make the decision that may or may not reflect your subordinates’
influence.
- G (Group): You share the problem with your subordinates as a group. Together you generate and
evaluate alternatives and attempt to reach agreement on a solution. You don’t try to influence the
group to adopt “your” solution, and you are willing to accept and implement any solution that has
the support of the entire group.
Irving Janis and groupthink
Groupthink: mode of thinking that people engage in when they are deeply involved in a cohesive in-group,
when the of action members’ striving for unanimity overrides their motivation to realistically appraise
alternative courses It is the ‘worse’ bias in decision making. It is characterized by eight ‘symptoms’:
- Illusion of invulnerability: any decision they make will be successful.

- Belief in the inherent morality of the group: justifying a decision by reference to some higher value.
- Rationalization: underestimate the negative consequences or risks of a decision.
- Stereotyping out-groups: characterizing opponents or doubters in unfavorable terms, making it easier
to dismiss even valid criticism from that source.
- Self-censorship: suppressing legitimate doubts in the interests of group loyalty.
- Direct pressure: strong expressions from other members (or the leader) that dissent to their favored
approach to be unwelcome.
- Mind guards: keeping uncomfortable facts or opinions out of the discussion.
- Illusion of unanimity: playing down any remaining doubts or questions, even if they become stronger
or more persistent.

CHAPTER 17 – TEAMS
I. Introduction
People at work develop loyalties among small group of fellow

workers, together, these groups work more efficiently.
Indeed, teams have become the strategy of choice when
organizations are confronted with complex and difficult tasks.
People may be brought together in teams for the duration of

a project, whether that project is a short-term problem solving,
middle-term project or long-term work – then they disperse
and re-form in different combinations to work on their next
projects
Teams are often used when the task is too complex that it
exceeds the capacity of an individual, when multiple and quick
decisions are needed, when life of other people depends on
them, ...
II. Types of team

Function of team
Hackman identified seven team functions, the following table summarises the risks an opportunity associated
with each:
Type Risks Opportunities

Top Management teams Under bounded ; abscence of Self-designin; influence over key
To set organisational direction organizational context organizational conditions
Task forces Team and work both new Clear purpose and deadline
For a single unique project
Professional support groups Dependency on others for work Using and honing progessional
Providing expert assistance and/or audiences
Performing groups Skimpy organizational supports Play that is flued by competition

Playing to audiences and/or audiences
Human services teams Emotional drain; struggle for Inherent signification of helping
Taking care of people control people
Customer service teams Loss of involvement with parent Bridging between parent
Selling products and services organization organization and customers
Production teams Retreat into technology; insulation Continuity of work; able to hone
Turning out the product from end users team design and product

Formal team
Formal team: management has deliberately created to perform specific tasks to help meet organizational
goals.
§ ‘Vertical’ teams consist of a manager and his subordinates within a single department or function.
§ ‘Horizontal’ teams consist of staff from roughly the same level, but from several functions.
Informal groups
Informal group: when people come together and interact regularly and develop common interests.
Self-managing teams
Self-managing team operates without an internal manager and is responsible for a complete area of work.
-à Members are responsible for doing the work but have a high degree of autonomy in how they do it: they
manage themselves.
Virtual teams
Virtual teams: members are physically separated, using communications technologies to collaborate across
space and time to accomplish their common task.
III. Crowds, groups and team
Teams differ to crowds in the way that they have a structure to handle the whole process. The structure is
the regularity in the way a unit or a group is organized, such as the roles that are specified.
It is important to differentiate the terms ‘group’ and ‘team’:
§ Working group: collection of individuals who work mainly on their own but interact socially and
share information and best practices.
§ Team: small number of people with complementary skills who are committed to a common
purpose, performance goals, and approach for which they hold themselves mutually accountable.
It is what groups and teams do that matter, not what they are called. Katzenbach and Smith’s definition
suggests some criteria against which to evaluate features of a team:
- Small number: more than about 12 people find it hard to operate as a coherent team. Most teams
have between 2 and 10 people, with between 4 and 8 being the most common.
- Complementary skills: teams benefit from having members who, between them, share technical,
functional or professional skills relevant to the work. Second, a team needs people with problem-
solving and decision-making skills. Finally, a team needs people with interpersonal skills to hold it
together.
- Common purpose: teams cannot work unless members invest time and effort to clarify and
understand their common purpose.
à They need to express this in clear performance foals upon which members can focus their time
and energy.
- Common approach: teams need to decide how they will work together to accomplish their purpose.
(Who does what, ...)
- Mutual accountability: a team cannot work as one until its members willingly hold themselves to
collectively and mutually accountable for the outcomes.

IV. Team composition
Bell defined the team composition as the configuration of members’ attribute (e.g. number, abilities,
demographics, personality, values, attitudes) in a team.
Task and maintenance roles
As team members work on the task, their unique attributes lead them to take on distinct roles. Some
people focus on the task, on doing the job while others focus on keeping the peace and holding the group
together. The table below summarizes the two:
Empahasis on task Emphasis on maintenace

Initiator Encourager
Information seeker Compromiser
Diagnoser Peacekeeper
Opinion seeker Clarifier
Evaluator Summariser
Decision manager Standard setter
Meredith Belbin – Team Roles
He found that successful team are balanced with the 9 following roles:
Roles Typical features
Implementer Disciplined, reliable, conservative and efficient.

Turns ideas into practical actions.
Coordinator Mature, confident, a good chairperson. Clarifies
goals, promotes decision making, delegates well.
Shaper Challenging, dynamic, thrives on pressure. Has the
drive and courage to overcome obstacles.
Plant Creative, imaginative, unorthodox. Solves difficult
problems.
Resource investigator Extravert, enthusiastic, communicative. Explores
opportunities. Develops contacts
Monitor-evaluator Sober, strategic and discerning. Sees all options,
judges accurately.
Team worker Cooperative, mild, perceptive and diplomatic.
Listens, builds, averts friction, calms the waters.
Completer Painstaking, conscientious, anxious. Searches out
errors and omissions. Delivers on time.
Specialist Single-minded, self-starting, dedicated. Provides
knowledge and skills in rare supple
Belbin didn’t suggest that all teams should have 9 people, each with a different preferred team role (the
types of behavior that people display relatively frequently when they are part of a team).
à each team need to find a balance, depending on their task.

V. Stages of team development
Tuckman and Jensen developed a theory that groups potentially pass through 5 different stages of
development:
- Stage 1 – Forming, when members choose or are asked

to join a team.
à They get to know the other members and their task.
- Stage 2 – Storming, the team gets to know each other
and faces difficulties with the members’ differences.
- Stage 3 – Norming, the members begin to accommodate
differences and establish adequate ways of working
together.
à People create or clarify roles and responsibilities.
à The outcome of an effective norming stage is that
members agrees on both the administrative and social
aspects of working together.
- Stage 4 – Performing, the group is working well, get the
job done.
- Stage 5 – Adjourning, the team completes its task and
disbands.
A team that survives will go through these stages many times. (e.g. new members join, other leaves, new
circumstances...) Therefore, the model of the stages of team development looks like this:
Note: virtual teams tend to fail more often as passing those stages are more difficult in a long-distance
relationship.
VI. Team processes
Effective teams develop processes that help them complete their tasks:
Common approach
Common approach: how the team members are successfully going to pass the norming stage.
à It can include: agreeing the purposes of the team and the outputs it will deliver, how to deliver it,
integrating new members, agreeing on time and dates of meeting, ...
Categories of communication
Group members depend on information and ideas from other to do tasks. The table below shows 6
different categories of communication. Depending on which one a team will use most, it is more or less
likely for it to perform well.
Category Explanation
Proposing Putting forward a suggestion idea or course of action
Supporting Declaring agreement or support for an individual or
their idea
Building Developing or extending an idea or suggestion from
someone else
Disagreeing Criticizing another person’s statement
Giving information Giving or clarifying facts, ideas or opinions
Seeking information Seeking facts, ideas or opinions from others

Observing team
This reflect a self-reflecting idea.

à members should develop their observation skills, the activity of concentrating on how a team works rather
than taking part in the activity itself. This means concentrating on the process rather than on the content.
This can help the team identify what they should try to repeat and what they should try to improve.
VII. Outcomes of teams – for the members
Individuals require the feeling of acceptance by a group.

They become members of a team who were loyal to each
other and who have high levels of team-working skills.
Likert maintained that these groups are effective because

of the principle of supportive relationships. He agreed
with Maslow that people value a positive response from
others, which helps to build and maintain their self-
esteem.
However, it is important to maintain social relationships

in different groups. (See figure)
Counter-view (conservative control): the possibility of workers reaching negotiated consensus on how to
shape their behavior according to a set of core values. This happens when teams are self- managing.
In teams, in is often frequent that people work with ‘reward’ and ‘punishments’. Indeed, members rewarded
those who conformed by making them feel part of the team. While when people ‘disobeyed’ they’d be
punished by being kicked out of the group. (i.e. being late too much.)
VIII. Outcomes of teams – for the organization
Teams bring professional and technical skills beyond those of any individual.
à By creating multidisciplinary teams enables the exchange of different valuable information, knowledge and
expertise that bear on a complex problem.
Teams can bring either high efficiency and high-quality job (by providing a structure, a forum, enabling
people to extend their roles, ...) or obstruct performances (if someone prolong discussion to block progress,
by repeating a debate and losing time, ...).
Hackman proposed 3 criteria against which to evaluate a team:
- Has it met performance expectations? Is the group completing the task managers gave to it – not
only the project performance criteria, but also measures of cost and timeliness?
- Have members experienced an effective team? Is it enhancing their ability to work together as a
group? Have they created such a winning team that it represents a valuable resource for future
projects?
- Have members developed transferable team-work skills? Are members developing team-work skills
that they will take to future projects?

IX. Teams in context
Does the task require a team approach?
Teams are not always worth the cost. Sometimes the team may represent an expensive solution to a simple
problem. The usefulness of teams depends on the task:
- Simple puzzles of a technical nature can be done effectively by competent staff working independently.
- Familiar tasks with moderate degrees of uncertainty need some sharing of information and ideas, but
the main work can be done mostly alone.
- A high degree of uncertainty and relatively unknown problems require high levels of information
sharing and deep interpersonal skills, thus requiring a team.
Does the context support the team?
Aspects of a team’s context affect how it performs. A manager should also attend to wider organisational
conditions such as: the availability of team-based rewards, information systems to support the task and
provide feedback on progress, and available education and training, including coaching and guidance.

CHAPTER 5 – CORPORATE RESPONSIBILITY
I. Corporate Malpractice
Controversial issues of malpractice: organisations give generous rewards to senior staff; banks sell
customers unnecessary insurance; and when retailers source foods from factories that pay little attention to
workers’ safety.
à These practices can damage one’s reputation.
II. Corporate responsibility
Corporate responsibility (CR): the awareness, acceptance and management of the wider implications of
corporate decisions. We can distinguish three board forms of CR (according to the Rangan et al model):
1. Philanthropy: the practice of contributing personal or corporate wealth to charitable or similar causes,
and enlightened self-interest, the practice of acting in a way that is costly or inconvenient at present,
but which is believed to be in one’s best interest in the long term.
2. Improving operations: the responsible corporate activity of working on business processes to improve
efficiency. (e.g. on the inputs and resource supplies, workforce activities, operations, product and
service impacts.)
3. Creating shared value: situations where the company and the community work together to adapt part
of the company’s operating system to create shared value
à creating value in a way that also creates value for society by addressing its needs and challenges
(according to Porter and Kramer) – which benefits both.
Philanthropy and enlightened self-interest imply limited interaction between donor and recipient. Improving
operations will involve mainly staff in the company and perhaps a few other people. Creating shared value
implies intense and continuing interaction between parties.
III. Perspectives on individual responsibility

Three domains of human action
Depending on the scale of amount of explicit control,

there are 3 domains on human action.
§ Ethics: a code of values that guide human

action by setting acceptable standards.
§ Laws
§ Society They keep some decision « out of your control »
Four criteria for evaluating an action
Philosophers identified four principles that people use to evaluate whether an action is ethical:
- Moral principle: if someone acts in a way that conforms to accepted principles (do not steal, kill, hurt
voluntarily, ...), it is right: if not, it is wrong.
- Utilitarianism: they evaluate an action on the total balance of
pleasure and pain in the society. An act is right if it brings
more pleasure than it hurts.
- Human rights: they evaluate an action against its effect on
human right that a society recognises.

- Individualism: they evaluate an action against its effect on their interests. An act is right if they can
show that it serves a person’s interests.
However, each evaluation is personal and can be controversial when compared to other beliefs.
IV. Perspectives on corporate responsibility
Criteria of corporate social

performance
Economic responsibility Ethical responsibility Discretionary responsibility

Legal responsibility (Obey
(make a profit that can the law) (do what is right, avoid (Contribute to community,
benefit the shareholders) harm) be philantropic)
The figure above summarizes the four responsibilities that may guide managers’ actions.
Note:
Social contract: mutual obligations that society and business recognize they have to each other. In the ethical
responsibility, managers may act on their view of the social contract.
V. An ethical decision-making model
Ethical decision-making models examine the influence of individual characteristics and organisational
policies on ethical decisions.
Ethical relativism: ethical judgement can’t be made independently of the culture in which the issue arises.
The individual factors represent:
- Stage of moral development: the extent to which a person can distinguish between right and wrong,
the higher it is, the more likely the person will act ethically.
- Ego strength: the extent to which the person can resist impulses and follow their convictions; the
greater it is, the more likely the person will do what they think is right
- Locus of control: the extent to which the person believes they control their life; the more they see
themselves as having control, the more likely they will act ethically.
The contextual factors:
- Work-group norms: beliefs within the work

group about right and wrong behaviour.
- Incentives: management policies on rewards and
disciplines
- Rules and regulations: management policies
about acceptable behaviour.

VI. Stakeholders and corporate responsibility

Stakeholders priorities – balancing trade-offs

Ethical investors: people who only invest in businesses that meet specific criteria or ethical behaviour.
Stakeholders Likely interests towards corporate responsibility

SHAREHOLDERS - Financially-centred investors: high return on investment.
- Ethical investors: strong CR policies, reputation, long-term
financial return.
CREDITORS Prompt payment

MANAGERS Fair income and career prospects, positive reputation for acting
responsibly and sustainable
EMPLOYEES Employment, security, safe working conditions, rewarding work,
fairness in promotion, security and pay.
CUSTOMERS - Majority – price, quality, durability and safety
- Minority – fair-trade sources, fair treatment of staff, care for
environment.
SUPPLIERS Fair terms, prompt payment, long-term relationships

LOCAL COMMUNITIES Employment, income, limits on pollution and noise
GOVERNMENT Pay taxes, obey laws, provide economic development, policies that
support (e.g.) government renewable energy targets.
ENVIRONMENTAL CAMPAIGNERS Minimise pollution, emissions, waste, and assist recycling. Use
Fairtrade sources when possible.
Timothy Devinney questioned the feasibility of the completely ‘socially responsible firm’ since corporations
can be made more ‘virtuous’ one some dimensions, but this will inevitably involve a price on other
dimensions, like most aspect in life, has very few, if any, win/win outcomes.
Stakeholders influence managers
Managers must satisfy the stakeholders; thus they are influenced by them. Whether it is to maximize profit
or anything else.
Managers influence stakeholders – the lobbying business
Managers can, for example, lobby to alter laws in their favour, ...
VII. Corporate responsibility and strategy
David Vogel: how companies who have an interest in being sustainable will do so, but that won’t increase
the global amount of companies that will go sustainable. Indeed, companies who won’t benefit from going
sustainable, won’t do so.

Adapting the Rangan et al model, there are four ways in which CR can contribute to the wider strategy:
1. Corporate mission: the companies that place CR at the heart of their business.
2. Philanthropy and enlightened self-interest: Jones et al suggest that a positive reputation for
responsible behaviour makes a company more attractive to potential employees.
3. Improving operations = improving the sustainability in a company’s operations can be useful:
à Improving the sustainability to produce resources in order to, for example, ensure that the
company will still benefit from the resources later (e.g. Mars with cocoa)
à The ethical consumers: those who take ethical issues into account in deciding what to purchase.
4. Creating shared value. Porter and Kramer said that companies are more likely to perform well if
they aim to create shared value, by balancing the interests of many stakeholders.
Rangan et al. said that no matter what approaches a company chooses, it must construct appropriate
monitoring systems to ensure that it works well.
Does responsible action affect performance?
It is quite unclear whether responsible action affect performance. Four people tried to answer this question:
1. Orlitzky et al.: found a positive relationship between behaviour and financial performance.
2. Ambec and Lanoie: seven mechanisms that enable
firms to improve enviro/eco performance. (See figure
below.)
3. Eccles et al. found that high-sustainability companies
were more likely to:
à Assign responsibility for sustainability to a specific
Board committee,
à Make executive pay depend on environmental,
social and reputational measures,
à Establish a more comprehensive and engaged
stakeholder management process,
à To measure and disclose information related to
employees, customers and suppliers.
High-sustainability companies outperform low-sustainability companies in both stock market as well as

accounting performance.
4. Jones et al. show that companies that are sustainable tend to be more attractive to potential
employees. Three mechanisms support this:
à The job-seekers’ anticipated pride in being associated with such a firm,
à Their perception of a close fit between their and the company’s values
à Their expectations that such companies would treat staff well.
5. Vogel: that firms that spend more on marketing are not necessarily more profitable than those that
spend less, there is no reason to expect more responsible firms to outperform less responsible ones.
VIII. Managing corporate responsibility
- Leading by example: senior managers set the tone for an organisation by their actions.
- Codes of practice: formal statement of the company’s values, setting on the “rules” of the firm.
- Corporate responsibility structure and reporting: the formal systems and roles that companies
create to support responsible behaviour. Most companies include a CR statement in their Annual
Report, and they may include an ethical audit – the practice of systematically reviewing the extent
to which an organisation’s actions are consistent with its stated ethical intentions.

CHAPTER 10 – ORGANISATION STRUCTURE
I. Strategy, organisation and performance
Alfred Chandler: growth and diversification placed too many demands on centralised structures.
à strategy-shaped structure, (creating decentralised, divisional structures, which allow managers at
headquarters to provide overall guidance and control and leaving the detailed of divisions running to local
managers) usually work better. He also studied the way that structure can influence strategy.
Andrews and Boyne: short-term disruption might not always be worth the long-term benefits. As people
value stability, changing structure might endanger this.
II. Designing a structure
Structure of an organization: sum total of the ways in which it divides its labour into distinct tasks and
then achieves co-ordination among then.
The organisation chart
Organisation chart: shows the main departments and senior positions in an organisation and the reporting
relations between them.
à four features of the formal structure (setting out how the organisation’s activities are divided and
coordinated.):
- Tasks: the major activities of the organisation,

- Subdivisions: which departments are responsible for which tasks,
- Levels: the position of each post within the hierarchy,
- Lines of authority: the link the boxes to show people who to report to.
It doesn’t show the informal structure: undocumented relationships between members of the organisation
that emerge as people adapt systems to new conditions and satisfy personal and group needs.
Work specialisation
Vertical specialisation refers to the extent to which responsibilities at different levels are defined. While
horizontal specialisation is the degree to which tasks are divided among separate people or departments.

Chain of command
§ Formal authority: the person in a specified role that has to make decisions, allocate resources or
give instructions.
§ Responsibility: a person’s duty to meet the expectations others have of them in their role. To fulfil
those responsibilities, they require formal authority to manage resources.
§ Delegation: occurs when one person gives another the authority to undertake specific activities or
decisions.
The span of control
§ Span of control: number of subordinates reporting

directly to the person above them in the hierarchy.
§ Tall organisation includes narrow spans of
supervisions.
§ Flat organisation includes a wide spans of
supervision.
Centralisation and decentralisation
§ Centralisation: a relatively large number of decisions are taken by management at the top of the
organisation.
§ Decentralisation: a relatively large number of decisions are taken lower down the organisation in
the operating units.
à Most organisation display a mix of both.
The table here under specifies the advantages and disadvantages of centralisation:
Factor Advantages Disadvantages

RESPONSE TO CHANGE Thorough debate of issues Slower response to local
conditions
USE OF EXPERTISE Concentration of expertise at the Less likely to take account of local
centre makes it easier to develop knowledge or innovative people
new services and promote best
practice methods
COST Economies of scale in purchasing Local suppliers may give better
and using common systems (e.g. value than remote corporate ones
IT)
POLICY IMPLICATIONS Possibly less risk of local Possibly more risk of local
managers acting illegally managers acting illegally
STAFF COMMITMENT Backing of centre ensures wide Staff motivated by more
support responsibility
CONSISTENCY Provides consistent image to the Local staff discouraged from

public – less variation in service taking responsibility – can blame
standards centre

Formalisation
Formalisation: using written or electronic documents to direct and control employees. They include rules,
procedures, instruction manuals, job descriptions, ...
III. Dividing work internally – functions, divisions and matrices
There are 4 types of structure can be defined:
- Functional structure: tasks are grouped into departments based on similar skills and expertise.
- Divisional structure: tasks are grouped in relation to their outputs, such as product, the needs of
different types of customer or even geographical areas.
- Matrix structure: both functional and divisional structures are merged.
The table below states the advantages and disadvantages of both functional and divisional structures:
Structure Advantages Disadvantages

FUNCTIONAL Clear career paths and Isolation from wider interests
professional development damages promotion prospects
Specialisation leads to high Conflict over priorities

standards and efficiency
Lack of wider awareness damages
Common professional interests external relations
support good internal relations
DIVISIONAL Functional staff focus on product Isolation from wider professional
and customer needs and technical developments
Dedicated facilities meet customer Costs of duplicate resources

needs quickly
Common customer focus enables Potential conflict with other

internal relations divisions over priorities Focus on
divisional, not corporate, needs.
IV. Dividing work externally – outsourcing and networks

Outsourcing
Outsourcing: delegating selected value chain activities to an external provider. (Benefits: help save capital
for new companies. Drawback: the company depends on others working to their required standard.)

Collaborative networks
Collaborative network: tasks required by one company are performed by other companies with expertise
in those areas. Miles et al identify their properties:
- Shared interests: shared resources or common goals

- Collaborative values: share knowledge and contribute to the success of fellow community members,
and to seek fairness in contributions and rewards.
- Community-orientated leadership: facilitating growth sustainability, collaboration and promoting
collaborative values and practices.
- Infrastructure to support member collaboration: systems, processes and norms that support both
direct and pooled collaboration among members.
- Expandable resources: knowledge and other resource pools that all members contribute to and draw
from.
Mixed forms
Large organisations usually combine functional, product and geographical structures within the same
company.
V. Coordinating work
- Direct supervision: a manager directly supervises people. Drawback: hard with geographical
separation.
- Hierarchy: the decisions are taken by a certain common supervisor. In a large hierarchy, this can take
a lot of time.
- Standardising inputs and outputs: the staff receive the same training before starting to work.
- Rules and procedures: the indications of how a person should do their work.
- Information systems: ensure people have common information so they can be coordinated.
Homberg et al.: the best performance was in firms where managers had both, developed strong structural
links between the two functions, especially by using teams, and requiring staff to plan projects jointly as well
as ensured that staff in both functions had high market knowledge by rotating them between functions to
learn about customers and competitors.
- Direct personal contact : when human talk to each other.
Mintzberg found that people use this method in both the simplest and the most complex situations.
VI. Mechanistic and organic forms
Burns and Stalker:

§ Mechanistic structure: high degree of task specialisation, people’s responsibility and authority
are closely defined and decision-making is centralised.
à this also refers to a vertical hierarchy.
§ Organic structure is one where people are expected to work together and to use their initiative
to solve problems; job descriptions and rules are few and imprecise.

The table below compares both:
Mechanistic structure Organic structure

Work on specialised tasks Contribute experience to common tasks
Hierarchical structure of control Network structure of contacts
Knowledge located at top of hierarchy Knowledge widely spread
Vertical communication Horizontal communication
Loyalty and obedience valued Commitment to goals valued
Strategy
The figure below shows the relationship between

strategies and structural types. It explains that
strategies require appropriate structures. The more
strategy corresponds to cost leadership, the more
likely it is that managers will create a functional
structure. If the balance is towards differentiation,
they are more likely to create a divisional, team or
network structure.
Technology
Technology: the knowledge, equipment and activities used to transform inputs into outputs. Joan Woodward
found a relationship between technical complexity and company structure:
- Unit and small-batch production: unique goods to a customer’s order.

- Large-batch and mass production: standard productions move along an assembly line, with people
complementing the machinery.
- Continuous process: material flows through complex technology making the product, as people
monitor the process and fix faults.
Environment
Burns and Stalker compared the structure of a long-

established rayon plant in Manchester with the structures
of some new electronics companies that had been created
in the east of Scotland, both were successful but with
different structures. They concluded that both structures
were appropriate for their contexts. They concluded that
stable, predictable environments would encourage a
mechanistic structure; while, volatile, unpredictable environments would encourage an organic structure.
Lawrence and Lorsch: researched how departments are affected by environment and how they differ:
- Those facing unstable environments = less formal structures that those facing stable ones.
- The greater differentiation (when the parts of an organisation develop particular attributes in
response to the demands posed by their relevant external environments) between departments, the
more effort was needed to integrate their work.
- Successful firms achieved more integration (the processed of achieving unity of effort among the
various subsystems in the accomplishment of the organisation’s task) between units by using a variety
of integrating devices such as task forces and project manager with the required interpersonal skills.
- The less effective companies in the uncertain environment used rules and procedures.

Size and life cycle
Weber: small organisations tend to be informal while large organisation had formal, bureaucratic structures;
researched by Pugh and Hickson confirmed this.
Indeed, when an entrepreneur creates a business alone with a few associates, it is first informal before it
starts to grow and become more bureaucratic with more divisions of responsibilities and more rules and
systems to ensure coordination.
Contingencies or managerial choice?
Contingency theories: performance of an organisation depends on having a structure that is appropriate to

its environment.
Determinism is the view that the business environment determines an organisation’s structure
John Child disagreed saying that contingency theorists ignore the degree of structural choice (the scope
that management has to decide the form of the structure, irrespective of environmental conditions) that
managers have.
VII. Learning organisations
Learning organisation: developed the capacity to continuously learn, adapt and change.
Nonaka and Takeuchi: create and solve problems has become a core competence in many businesses;
everyone is a knowledge worker. The table below presents the features of an ideal learning organisation,
based on Pedler et al:
Feature Explanation
A learning approach to strategy The use of trails and experiments to improve
understanding and generate improvements, and to
modify strategic direction
Participative policy making All members are involved in strategy formation,
influencing decisions and values and addressing conflict
Informative Information technology is used to make information
avaibale to everyone and tend to enable frontline staff
to use their initiative
Formative accounting and controle Accoutning, budgeting and reporting systems are
desgined to help people understand the operations of
organisational fincance
Internal exchang Sections and departments think of themselves as
customers and suppliers in an internal ‘supply chain’,
learning from each other
Reward flexibility A flexible and creative reward policy, with financial and
non- financial rewards to meet individual needs and
performance
Enabling structures Organisation charts, structures and procedures are
seen as temporary, and can be changed to meet task
requirements

Boundary workers as environmental scanners Everyone who has contact with customers, suppliers,
clients and business partners is treated as a valuable
information source.
Inter-company learning The organisation learns from other organisation
through joint ventures, alliances and other information
exchanges.
A learning climate The manager’s primary task is to facilitate
experimentation and learning in others, through
questioning, feedback and support.
Self-development opportunities for all People are expected to take responsibility for their own
learning, and facilities are made available, especially to
frontline staff.
These features can be summarized with the following table:
Argyris distinguished between single-loop and double-loop learning:
- Single-loop learning: the system maintains performance at the set level, but is unable to learn that
the temperature is set too high or too low.
- Double-loop learning: asks the question “is that an appropriate target in the first place?”
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PART 1 - MANAGEMENT OF

CHAPTER TWO – MODELS OF MANAGEMENT .........................................5

CHAPTER THREE – ORGANISATION CULTURES AND CONTEXTS.......9

CHAPTER FOUR – MANAGING INTERNATIONALLY..............................14

CHAPTER SEVEN – DECISION MAKING...................................................16

CHAPTER SEVENTEEN – TEAMS................................................................20

CHAPTER FIVE – CORPORATE RESPONSIBILITY ................................. 26

CHAPTER TEN – ORGANISATION STRUCTURE .................................... 30

Catherine Demassez du Castel

CHAPTER 1 - MANAGING IN ORGANISATIONS

Organisation: social arrangement for achieving goals that create value.

§ Tangible resources: the physical assets of an organization

There are different types of organisations:

- Commercial organisations: create wealth by adding value to resources

Specialisations for manager:

CATHERINE DEMASSEZ DU CASTEL 1

Within this hierarchy, 2 major communications paths are used: Board of

Category Role Activity

Disseminator Forward information to others, send memos, make

Spokesperson Represent the unit to outsiders in speeches a

Interpersonal Figurehead Perform ceremonial and symbolic duties, receive

Leader Direct and motivate subordinates, train, advise and

Liaison Maintain information links in and beyond the

Decisional Entrepreneur Initiate new projects, spot opportunities, identify

Disturbance handler Take corrective actions during crisis, resolve

Resource allocator Decide who gets resources, schedule, budget, set

Negotiator Represent unit during negotiations with unions,

CATHERINE DEMASSEZ DU CASTEL 2

Other roles of managers:

Managers in small businesses – O’Gorman et al

Management tasks: the four major tasks of managers:

The external environment must be taken into account.

CATHERINE DEMASSEZ DU CASTEL 3

Managers and their contexts

How to develop skill

Whetton & Cameron: individuals develop skills through 5 steps:

CATHERINE DEMASSEZ DU CASTEL 4

CHAPTER 2 – MODELS OF MANAGEMENT

I. What are models of management

II. The ignorance of Models – Pfeffer and Sutton

They observed that managers ignore models for these reasons:

- Trust personal experience more than they trust research

III. A manager’s frame of reference – Alan Fox

He studied the relationship between managers and employees

IV. The image of an Organisation using metaphors – Gareth Morgan

Metaphor: image used to signify the essential characteristics of a phenomenon.

- Machines: mechanical thinking and bureaucracies

CATHERINE DEMASSEZ DU CASTEL 5

V. The competing value framework – Quinn et al.

They believe that successive models of management

- Vertical axis: the tension between flexibility and

a. Rational goal models

Frank and Lillian Gilbreth

- How to reduce unnecessary action and fatigue

CATHERINE DEMASSEZ DU CASTEL 6

b. Internal process models

- Division of work: people should specialise in one category, it increases output.

c. Human relations Models

Mary Parker Follett

- Replacing bureaucratic institutions by networks