MANAGEMENT

Chapter 1: Manager and Management

Who are managers and where do they work?
- Where do managers work?
It’s obvious that managers work in organizations.
The organization is: A deliberate arrangement of people brought together to accomplish a
specific purpose.
Common Characteristics of Organizations
- Distinct purpose: typically expressed through goals the organization hopes to accomplish.
- People working together: each organization is composed of people. It takes people to
perform the work that’s necessary for the organization to achieve its goals.
- A deliberate systematic structure: all organizations develop a deliberate structure within
which members do their work.
+ That structure may be open and flexible, with no specific job duties or strict
adherence to explicit job arrangements. For instance, most big projects at Google (at
any one time, hundreds of projects are in process simultaneously) are tackled by small,
focused employee teams that set up in an instant a complete work just as quickly.
+ Or the structure may be more traditional—like that of Procter & Gamble or General
Electric or any large corporation—with clearly defined rules, regulations, job
descriptions, and some members identified as “bosses” who have authority over other
members. In the military, there is a well-defined hierarchy. In the U.S. Air Force, the
General of the Air Force is the highest-ranking officer and Second Lieutenant is the
lowest ranking officer. Between the two are nine officer ranks.
- Who Is a Manager?
+ How Are Managers Different from Nonmanagerial Employees?
Nonmanagerial Employees: People who work directly on a job or task and have no
responsibility for overseeing the work of others. Examples, associates, team members
Managers: Individuals in organizations who direct the activities of others. They were the
organizational members who told others what to do and how to do it. corporation./ coorperate
+ What Titles Do Managers Have?
- Top Managers: Responsible for making decisions about the direction of the organization.
Examples; President, Chief Executive Officer, Vice-President
- Middle Managers: Manage the activities of other managers. Examples; District Manager,
Division Manager
- First-line Managers: Responsible for directing nonmanagerial employees. Examples;
Supervisor, Team Leader, forehead
- What Do Managers Do?
+ What Is Management?
 Management: The process of getting things done effectively and efficiently, with and through
people. Management involves coordinating and overseeing the work activities of others so
their activities are completed efficiently and effectively.
- Effectiveness: “Doing the right things”, doing those tasks that help an organization reach its
goals. Whereas efficiency is concerned with the means of getting things done, effectiveness is
concerned with the ends, or attainment of organizational goals.
- Efficiency: Concerned with the means, efficient use of resources like people, money, and
equipment. Efficiency refers to getting the most output from the least amount of inputs or
resources. Managers deal with scarce resources including people, money, and equipment and
want to use those resources efficiently. Efficiency is often referred to as “doing things right,”
that is, not wasting resources.
In successful organizations, high efficiency and high effectiveness typically go hand in hand.
Poor management (which leads to poor performance) usually involves being inefficient and
ineffective or being effective but inefficient.
Example: Xiaomi’s logo change: effectiveness + efficiency
Xiaomi spent 300,000 just to change logo (round the edges of its old square). This helped the company to
gain public attention about the redesign and get even much more money while still make sure brand
recognition. Thus, the time, money they have put into the change are well-spent (successful marketing
campaign)
Efficiency (means): resources usage
Effectiveness(ends): goal attainmen t

+ Four Management Functions

- Planning: Defining the organizational purpose and ways to achieve it. They set goals,
establish strategies for achieving those goals, and develop plans to integrate and coordinate
activities.
- Organizing: Arranging and structuring work to accomplish organizational goals. Managers
are also responsible for arranging and structuring the work that employees do to accomplish
the organization’s goals. When managers organize, they determine what tasks are to be done,
who is to do them, how the tasks are to be grouped, who reports to whom, and where
decisions are to be made.
- Leading: Directing the work activities of others. Every organization has people, and a
manager’s job is to work with and through people to accomplish goals. This is the leading
function. When managers motivate subordinates, help resolve workgroup conflicts, influence
individuals or teams as they work, select the most effective communication channel, or deal in
any way with employee behavior issues, they’re leading.
- Controlling: Monitoring, comparing and correcting work performance. After goals and plans
are set (planning), tasks and structural arrangements are put in place (organizing), and people
are hired, trained, and motivated (leading), there has to be an evaluation of whether things are
going as planned. To ensure goals are met and work is done as it should be, managers monitor
and evaluate performance. Actual performance is compared with the set goals. If those goals
aren’t achieved, it’s the manager’s job to get work back on track. This process of monitoring,
comparing, and correcting is the controlling function.
+ What Roles Do Managers Play?
Henry Mintzberg observed that a manager’s job can be described by ten roles performed by
managers in three general categories
- Interpersonal Roles: interact with their employees for the purpose of achieving
organizational goals.
Figurehead: social, ceremonial and legal responsibilities that their employees expect him to
fulfill. They are the source of inspiration and authority to his employees. As head of a
department or an organisation, a manager is expected to carry out ceremonial and/or
symbolic duties. A manager represents the company both internally and externally in all
matters of formality. He is a networker but he also serves as an exemplary role model. He is
the one who addresses people celebrating their anniversaries, attends business dinners and
receptions.
Leader: communicating performance goals, training and mentoring employees, supporting
employee efforts, supplying resources, evaluating employee performance, motivating
employees towards higher level productivity. In his leading role, the manager motivates and
develops staff and fosters a positive work environment. He coaches and supports staff, enters
into (official) conversations with them, assesses them and offers education and training
courses.
Liaison: A manager serves as an intermediary and a linking pin between the high and low
levels. In addition, he develops and maintains an external network. As a networker he has
external contacts and he brings the right parties together. This will ultimately result in a
positive contribution to the organization.

- Informational Roles: the managerial role involves the processing of information

which means that they send, pass on and analyze information.
Monitor: As a monitor the manager gathers all internal and external information that is
relevant to the organization. He is also responsible for arranging, analyzing and assessing this
information so that he can easily identify problems and opportunities and identify changes.
Disseminator: As a disseminator the manager transmits factual information to his subordinates
and to other people within the organization. This may be information that was obtained either
internally or externally.
Spokesperson: As a spokesman the manager represents the company and he communicates to
the outside world on corporate policies, performance and other relevant information for
external parties.
- Decisional roles
Entrepreneur: The entrepreneurs in a firm are usually top-level managers. They identify
economic opportunities, lead the initiative for change, and make product decisions.
Disturbance Handler: Top and middle managers will react to disturbances (unexpected events)
in the organization whether internal or external. They will decide what corrective actions
should be taken to resolve the problems. In his managerial role as disturbance handler, the
manager will always immediately respond to unexpected events and operational breakdowns.
He aims for usable solutions. The problems may be internal or external, for example conflict
situations or the scarcity of raw materials.
Resource Allocator: All levels of management will make resource allocation decisions,
depending upon whether the decision affects the entire organization, a single department, or a
particular task or activity. In his resource allocator role, the manager controls and authorizes
the use of organizational resources. He allocates finance, assigns employees, positions of
power, machines, materials and other resources so that all activities can be well-executed
within the organization.
Negotiator: Depending on the effect on the organization, most negotiation is done by the top
and middle-level managers. Top managers will handle negotiations that affect the entire
organization, such as union contracts or trade agreements. Middle-level managers negotiate
most salary and hiring decisions. As a negotiator, the manager participates in negotiations
with other organizations and individuals and he represents the interests of the organization.
This may be in relation to his own staff as well as to third parties. For example salary
negotiations or negotiations with respect to procurement terms.
=> Negotiate with stockholders (A stakeholder has a vested interest in a company and can
either affect or be affected by a business' operations and performance, typical stakeholders are
investors, employees, customers, suppliers, communities, governments, or trade associations.)

+ What Skills Do Managers Need?

Conceptual Skills: Used to analyze complex situations. Conceptual skills are the skills
managers use to think and to conceptualize abstract and complex situations. Using these
skills, managers see the organization as a whole, understand the relationships among various
subunits, and visualize how the organization fits into its broader environment. Managers
then can effectively direct employees’ work.
Interpersonal Skills: Used to communicate, motivate, mentor and delegate. Which involves
the ability to work well with other people both individually and in a group. Because all
managers deal with people, these skills are equally important to all levels of management.
Managers with good human skills get the best out of their people. They know how to
communicate, motivate, lead, and inspire enthusiasm and trust.
Technical Skills: Based on specialized knowledge required for work. Technical skills are the
job-specific knowledge and techniques needed to proficiently perform work tasks. These
skills tend to be more important for first-line managers because they typically manage
employees who use tools and techniques to produce the organization’s products or service the
 organization’s customers. Often, employees with excellent technical skills get promoted to
first-line manager.
Political Skills: Used to build a power base and establish connections
+ Skills Needed at Different Managerial Levels
Top manager: deal with ideas, strategic goals => conceptual skills
Middle: communicate, monitor=> human skills
Lower: direct nonmanagerial employees with specific tasks => technical skills

In small firm, the structure is simple, the information channel is short and easy for the employee,
company to receive the in4 so the disseminator is less important. In contrast, large firm has complicated
structure and long in4 channel so disseminator is more important.
In shark tank tv program, sharks play the role of large firm and find the start up with potential to invest
=> resource allocator, spend money for activities, projects that have potential in the future. They don’t
have to play as entrepreneur because they can buy ideas from small firms. In addition it’s hard to make a
change, innovation to the system of large firm so entrepreneur is lowest.
Back to the Shark tank Tv program, the small companies don’t have reputation in the market so they need
a representor to build relationships with outside stakeholders and increase the brand for the company =>
spokeperson is the most important.
- Is The Manager’s Job Universal?
The universality of management: The reality that management is needed in all types and sizes
of organizations, at all organizational levels, in all organizational areas, and in organizations
no matter where located

CD

In reality, a manager’s job varies with along several dimensions

Level in the Organization: Top-level managers do more planning than supervisors

Profit vs. Nonprofit: Management performance is measured on different objectives

Size of the Organization: Small businesses require an emphasis in the management role of
spokesperson
National Borders: These concepts work best in English-speaking countries and may need to
be modified in other global environments
- Why Study Management?
All of us have a vested interest in improving the way organizations are managed
Organizations that are well managed find ways to prosper even in challenging economic times
After graduation most students become managers or are managed
+ What Can Students of Management Learn From Other Courses?
Anthropology: The study of social societies which helps us learn about humans and their
activities
Economics: Provides us with an understanding of the changing economy and competition in a
global context
Philosophy: Inquiries into the nature of things, particularly values and ethics
Political Science: The study of behavior and groups within a political environment
Psychology: The science that seeks to measure, explain and sometimes change the behavior of
humans
Sociology: The study of people in relation to their fellow human beings
+ What Factors Are Reshaping and Redefining Management?
Welcome to the new world of management! Today managers must deal with
Changing workplaces
Ethical and trust issues
Global economic uncertainties
Changing technologies
Manager must be concerned with:
Customers services: the importance of customers and clearly believes that focusing on
customers is essential to success. Without them, most organizations would cease to exist. Yet,
focusing on the customer has long been thought to be the responsibility of marketing types.
The implication is clear: managers must create a customer-responsive organization where
employees are friendly and courteous, accessible, knowledgeable, prompt in responding to
customer needs, and willing to do what’s necessary to please the customer.
Social media: Today, the new frontier is social media, forms of electronic communication
through which users create online communities to share ideas, information, personal
messages, and other content. And employees don’t just use these on their personal time, but
also for work purposes. That’s why managers need to understand and manage the power and
peril of social media. More businesses are turning to social media as a way to connect with
customers. Increasingly, many companies encourage employees to use social media to
become employee activists. For this purpose, employee activists draw visibility to their
workplace, defend their employers from criticism, and serve as advocates, both online and off.
Innovation: Success in business today demands innovation. Innovation means exploring new
territory, taking risks, and doing things differently. And innovation isn’t just for high-tech or
other technologically sophisticated organizations. Innovative efforts can be found in all types
of organizations.
Sustainability: what’s emerging in the twenty-first century is the concept of managing in a
sustainable way, which has had the effect of widening corporate responsibility not only to
managing in an efficient and effective way but also to responding strategically to a wide range
of environmental and societal challenges. Although “sustainability” means different things to
different people, the World Business Council for Sustainable Development describes a
situation where all the earth’s inhabitants can live well with adequate resources. From a
business perspective, sustainability has been described as a company’s ability to achieve its
business goals and increase long-term shareholder value by integrating economic,
environmental, and social opportunities into its business strategies. Sustainability issues are
now moving up the agenda of business leaders and the boards of thousands of companies.
+ Why Are Customers Important to the Manager’s Job?
Without customers, most organizations would cease to exist
Today we’re discovering that employee attitudes and behaviors play a big part in customer
satisfaction
Managers must create a customer-responsive where employees are friendly, knowledgeable,
responsive g to customer needs
+ Why Is Innovation Important to the Manager’s Job?
“Nothing is more risky than not innovating”
Innovation isn’t just important for high technology companies but essential in all types of
organizations
A Brief History of Management’s Roots
- Early Management
- Classical Approaches
- Other Classic Approaches
- Behavioral Approaches
- The Hawthorne Studies
- Quantitative Approaches
- Contemporary Approaches
 Chapter 2: Foundation of decision making
- How Do Managers Make Decisions?
- The decision-making process

Step 1: Identify a Problem

Every decision starts with a problem, a discrepancy between an existing and a desired
condition. How do managers identify problems? In the real world, most problems don’t
come with neon signs flashing “problem.”Managers also have to be cautious not to confuse
problems with symptoms of the problem. Keep in mind that problem identification is
subjective. One manager might consider this to be the problem, but another manager might
not. In addition, a manager who resolves the wrong problem perfectly is likely to perform
just as poorly as the manager who doesn’t even recognize a problem and does nothing. As you
can see, effectively identifying problems is important, but not easy.
Step 2: Identify Decision Criteria
Once a manager has identified a problem, he or she must identify the decision criteria
important or relevant to resolving the problem. Every decision-maker has criteria guiding his
or her decisions even if they’re not explicitly stated. Sometimes, decision criteria change.
Step 3: Allocate Weights to the Criteria
If the relevant criteria aren’t equally important, the decision-maker must weigh the items in
order to give them the correct priority in the decision. How? A simple way is to give the most
important criterion a weight of 10 and then assign weights to the rest using that standard.
Of course, you could use any number as the highest weight.
Step 4: Develop Alternatives
The fourth step in the decision-making process requires the decision-maker to list viable
alternatives that could resolve the problem. In this step, a decision-maker needs to be creative,
and the alternatives are only listed—not evaluated just yet.
Step 5: Analyze Alternatives
Once alternatives have been identified, a decision-maker must evaluate each one. How? By
using the criteria established in Step 2. Keep in mind that these data represent an assessment
of the eight alternatives using the decision criteria, but not the weighting. When you multiply
each alternative by the assigned weight, you get the weighted alternatives as shown in Exhibit
2-4. The total score for each alternative, then, is the sum of its weighted criteria. Sometimes a
decision-maker might be able to skip this step. If one alternative scores highest on every
criterion, you wouldn’t need to consider the weights because that alternative would already be
the top choice. Or if the weights were all equal, you could evaluate an alternative merely by
summing up the assessed values for each one.
Evaluation of decision effectiveness = assessment criteria x criteria weight
Step 6: Select an Alternative
The sixth step in the decision-making process is choosing the best alternative or the one that
generated the highest total in Step 5.
Step 7: Implement the Alternative
In Step 7 in the decision-making process, you put the decision into action by conveying it to
those affected and getting their commitment to it. We know that if the people who must
implement a decision participate in the process, they’re more likely to support it than if you
just tell them what to do. Another thing managers may need to do during implementation is
reassess the environment for any changes, especially if it’s a long-term decision. Are the
criteria, alternatives, and choices still the best ones, or has the environment changed in such a
way that we need to reevaluate?
Step 8: Evaluate Decision Effectiveness
The last step in the decision-making process involves evaluating the outcome or result of the
decision to see whether the problem was resolved. If the evaluation shows that the problem
still exists, then the manager needs to assess what went wrong. Was the problem incorrectly
defined? Were errors made when evaluating alternatives? Was the right alternative selected
but poorly implemented? The answers to the questions asked as a result of evaluating the
outcome might lead you to redo an earlier step or might even require starting the whole
process over.
- What is the Rational Model of Decision Making?
Rational Model assumes:
- That managers’ decision making will be rational logical and consistent choices to maximize
value
- The problem faced would be clear and unambiguous
- The decision-maker would have a clear and specific goal
- Know all possible alternatives and consequences
 - What is Bounded Rationality?
The concept of bounded rationality: a more realistic approach to describing how managers
make decisions is, which says that managers make decisions rationally, but are limited
(bounded) by their ability to process information. Because they can’t possibly analyze all
information on all alternatives, man-agers satisfice, rather than maximize. That is, they
accept solutions that are “good enough.” They’re being rational within the limits (bounds)
of their ability to process information.
Most decisions that managers make don’t fit the assumptions of perfect rationality, so they
satisfice. However, keep in mind that their decision-making is also likely influenced by the
organization’s culture, internal politics, power considerations, and by a phenomenon called
escalation of commitment, an increased commitment to a previous decision despite evidence
that it may have been wrong. Why would decision-makers escalate commitment to a bad
decision? Because they don’t want to admit that their initial decision may have been flawed.
Rather than search for new alternatives, they simply increase their commitment to the
original solution.
- What Role Does Intuition Play in Managerial Decision Making?
Intuitive Decision Making: Making decisions on the basis of experience, feelings and
accumulated judgment described as “unconscious reasoning.”
Intuitive decision-making can complement both rational and bounded rational decision-
making. First of all, a manager who has had experience with a similar type of problem or
situation often can act quickly with what appears to be limited information because of that
past experience. In addition, a recent study found that individuals who experienced intense
feelings and emotions when making decisions actually achieved higher decision-making
performance, especially when they understood their feelings as they were making decisions.
The old belief that managers should ignore emotions when making decisions may not be the
best advice.

- How Do Problems Differ?

Structured Problem: A straightforward, familiar, and easily defined problem
Unstructured Problem: A problem that is new or unusual for which information is ambiguous
or incomplete.
- What Are Programmed and Non programmed Decisions?
Programmed Decisions: A repetitive decision that can be handled using a routine approach
Nonprogrammed Decisions: A unique and nonrecurring decision that requires a custom-made
solution. Decisions that must be custom made to solve unique and nonrecurring problems.

Exhibit 3-8 describes the differences between programmed and nonprogrammed decisions.
Lower-level managers mostly rely on programmed decisions (procedures, rules, and
policies) because they confront familiar and repetitive problems. As managers move up the
organizational hierarchy, the problems they confront become more unstructured. Why?
Because lower-level managers handle the routine decisions and let upper-level managers deal
with the unusual or difficult decisions. Also, upper-level managers delegate routine decisions
to their subordinates so they can deal with more difficult issues. Thus, few managerial
decisions in the real world are either fully programmed or unprogrammed. Most fall
somewhere in between.
 Chapter 3: The management environment
External: Firm identify what they might choose to do
Internal: Firms identify what they can do
- Organizational environment

- Management environment
External Analyses’ outcomes
External environment is the factors, forces, situations, and events outside the organization that
affect its performance.
One of the biggest mistakes managers make today is failing to adapt to the changing world.
No successful organization, or its managers, can operate without understanding and dealing
with the dynamic environment—external and internal—that surrounds it.
The term “external environment” refers to factors, forces, situations, and events outside the
organization that affect its performance.
Components of External Environment
• The economic component encompasses factors such as interest rates, inflation, changes
in disposable income, stock market fluctuations, and business cycle stages.
• The demographic component includes trends in population characteristics such as age,
race, gender, education level, geographic location, income, and family composition.
• The technological component focuses on scientific and industrial innovations. The
technological component focuses on scientific and industrial innovations. (Mọi lĩnh vực công
nghệ đang làm thay đổi cấu trúc của tổ chức và cách điều hành của nhà quản trị.
Ảnh hưởng: Rút ngắn vòng đời của sản phẩm, thay đổi nhu cầu sản phẩm, tạo ra được những
tính năng công dụng mới, thay đổi cách sản xuất, quản lý trong doanh nghiệp.)
• The sociocultural component is concerned with societal and cultural factors such as
values, attitudes, trends, traditions, lifestyles, beliefs, tastes, and patterns of behavior. The
sociocultural component is concerned with societal and cultural factors such as values,
attitudes, trends, traditions, lifestyles, beliefs, tastes, and patterns of behavior. (Yếu tố văn hóa
xã hội bao gồm nhân khẩu học và các giá trị văn hóa của xã hội mà công ty hoạt động; Thể
hiện nhu cầu, quan điểm, lối sống và hành vi tiêu dùng của khách hàng.)
• The political/legal component looks at federal, state, and local laws, as well as other
countries’ laws and global laws. It also includes a country’s political conditions and stability.
The political/legal component looks at federal, state, and local laws, as well as other
countries’ laws and global laws. It also includes a country’s political conditions and stability.
(Tạo môi trường cho tổ chức hoạt động; Quyết định đến những việc doanh nghiệp có thể làm,
không được phép làm và bắt buộc phải làm; Các chính sách pháp luật có thể thúc đẩy hoặc
hạn chế sự phát triển của doanh nghiệp)
• The global component encompasses issues associated with globalization and a world
economy. The global component encompasses issues associated with globalization and a
world economy. (Hạ thấp hoặc xóa bỏ các hàng rào về hợp tác đầu tư, thương mại giữa các
quốc gia; Đối thủ cạnh tranh và thị trường tiêu dùng toàn cầu ngày càng phức tạp)

- General Environment: Segment of the general environment

- Opportunities and Threats

Opportunity: A condition in the general environment that, if exploited, helps a company
achieve strategic competitiveness.
Threat: A condition in the general environment that may hinder a company’s efforts to
achieve strategic competitiveness.
 - Industry Environment
The set of factors directly influencing a firm and its competitive actions and competitive
responses. Porter’s 5 forces:
Threat of new entrants
Power of suppliers
Power of buyers
Threat of product substitutes
Intensity of rivalry among competitors
These five forces explain why profitability in certain industries is higher than in others.
+ Bargaining Power of Suppliers (supply power tăng -> profit giảm -> tăng
cạnh tranh)
The bargaining power of suppliers describes how strong a supplier can influence input costs
and company operations. The presence of powerful suppliers reduces the profit potential in an
industry. Suppliers increase competition within an industry by threatening to raise prices or
reduce the quality of goods and services. As a result, they reduce profitability in an industry
where companies cannot recover cost increases in their own prices.
Supplier power increases when:
- Suppliers are large and few in number. (độc quyền -> supplier is more powerful than
buyer)
Say, a supplier operates under an oligopoly market with few players. Meanwhile, the
company operates under a monopolistic competitive market with many players. In this case,
the supplier has a higher negotiating power on price, quality, and sale terms.
- Suitable substitute products are not available. (k có substitution -> dựa hoàn toàn vào
product của supplier -> tăng supplier’s power)
Companies are, therefore, forced to rely on deliveries from their current suppliers.
Conversely, if there are many substitutions available, it is easy for the company to switch
from its current supplier. It increases the bargaining power of the company.
- Individual buyers are not large customers of suppliers and there are many of them. (k
phải khách quan trọng -> supply mặc cả ép giá buyer thoải mái)
Suppliers’ revenue and profits do not depend on sales to the company or other industry
players; they only make a small contribution. Suppliers sell to various industries.
- Suppliers’ goods are critical to the buyers’ marketplace success. (sản phẩm của
supplier là tốt nhất -> mặc cả)
It has a higher quality than other suppliers. Its supply dramatically affects the production and
quality of the company’s output. That, of course, increases the bargaining power of suppliers.
- Suppliers’ products create high switching costs.( high switching costs -> khó chuyển
sang cái khác -> buộc phải ở lại -> supplier mặc cả)
If switching from one supplier to another one will require a costly investment on the buyer’s
side, then the power of the supplier will increase. For example, if suppliers in some industries
require buyers to pay an initial sign up fee or purchase a certain equipment or software to be
able to deal with them in the future, this would mean that if the buyer ever wanted to switch
suppliers, they would have to pay all those fees all over again. This constitutes a barrier to
switching and plays in the supplier’s favor. On the other hand, if switching between suppliers
is as easy as exchanging some emails and canceling contracts without any penalties, then the
bargaining power of suppliers here will be very low and it plays in the buyer’s favor.
- Suppliers pose a threat to integrate forward into buyers’ industry. (supplier bán trực
tiếp cho người tiêu dùng chứ k qua công ty -> supplier profit hơn)
Forward integration is when one player in the value chain starts assuming the role of the next
player.
For example, if a retail supplier starts bypassing a retailer (buyer) and sells directly to
customers. A good example of this is when Nike launched its Nike Direct program, which lets
it bypass a lot of retail partners and sell directly to consumers. By doing this, Nike has
reduced their retail partners from 30,000 to only 40, and started keeping more of the profits to
itself.
Of course, this gives more power to the supplier and directly affects the buyer because now
the buyer is in direct competition with the supplier.
+ Bargaining Power of Buyers (buyer power tăng -> buyer giảm giá + cạnh
tranh vs ng khác vì k cần trả giá cao khi thất bại -> giảm industry profit
nhưng tăng buy profit)
The presence of powerful buyers reduces the profit potential in an industry. Buyers increase
competition within an industry by forcing down prices, bargaining for improved quality or
more services, and playing competitors against each other. The result is diminished industry
profitability
Buyer power increases when:
- Buyers are large and few in number.
If the number of buyers is small relative to that of suppliers, the buyer’s power will be
stronger.
- Buyers purchase a large portion of an industry’s total output.
- Buyers’ purchases are a significant portion of a supplier’s annual revenues.
If a buyer is able to get similar products/services from other suppliers, buyers depend less on
a particular supplier. Therefore, the power of the buyer would be greater.
- Buyers’ switching costs are low.
If there are not many alternative suppliers available, the cost of switching is high. Therefore,
buyer power would be low.
- Buyers can pose threat to integrate backward into the sellers’ industry.
If the buyer is able to integrate or merge suppliers, the buyer has greater bargaining power
over the existing suppliers.
+ Threat of Substitute Products (threat of sub tăng -> tăng compete -> giảm
profit cho company)
Substitution threat affects the profitability of an industry because consumers can choose to
purchase the substitute instead of your product. The availability of close substitute products
will make your industry more competitive. A lack of comparable substitute alternatives makes
an industry less competitive, increases profit potential for the firms in the industry but
potentially could find it hard to change direction or innovate.
The threat of substitute products increases when:
- Buyers face few switching costs.
Are switching costs low, meaning there is little if anything is preventing your customer from
purchasing the substitute product/service to the determent of your own offering.
- The substitute product’s price is lower.
Giá cái sub nhỏ hơn thì demand sub lớn như vi
- Substitute product’s quality and performance are equal to or greater than the existing
product.
Sub có chất lượng tốt hơn thì purchase sub
- Differentiated industry products that are valued by customers reduce this threat.
Các sp khác nhau thỏa mãn nhu cầu khác nhau của customer -> ít sub -> giảm threat
+ Intensity of Rivalry Among Competitors (càng tăng thì compete tăng ->
industrial profit giảm)

Industry rivalry increases when:

- There are numerous or equally balanced competitors.
- Industry growth slows or declines.
- There are high fixed costs or high storage costs.
- There is a lack of differentiation opportunities or low switching costs.
- When high exit barriers prevent competitors from leaving the industry.
+ Barriers to Entry (barrier tăng -> khó gia nhập thị trường -> compete
giảm -> industrial profit tăng)
Barriers to entry are the obstacles or hindrances that make it difficult for new companies to
enter a given market. These may include technology challenges, government regulations,
patents, start-up costs, or education and licensing requirements.
New entrants to an industry bring new capacity and the desire to gain market share, and they
often also bring substantial resources. As a result, prices can be low, cost can be high, and
profits can be low. There is a relationship between threat of new entrants, barriers to entry,
and reaction from existing competitors.
For example:
– If barriers are high and reaction is high, then the threat of entry is low.
– If barriers are low and reaction is low, then the threat of entry is high.
There are seven major barriers to entry, including: (1) economies of scale, (2) product
differentiation, (3) capital requirements, (4) switching costs, (5) access to distribution
channels, (6) cost disadvantages independent of scale, and (7) government policy.
- Economies of Scale:
+ Marginal improvements in efficiency that a firm experiences as it incrementally increases
its size
+ Economies of scale càng to thì new entrant càng khó -> barrier cao
Factors (advantages and disadvantages) related to large- and small-scale entry
- Flexibility in pricing and market share
- Costs related to scale economies
- Competitor retaliation

- Interpreting Industry Analyses

Unattractive industry (low profit potential)
+ Low barriers to entry
+ Supplier and buyer have strong position
+ Have great threat of substitution
+ Intense rival among competition
Attractive industry (high profit potential)
+ High barriers to entry
+ Suppliers and buyers have a weak position
+ Few threats from substitute products
+ moderate rival among competition
Internal Analyses’ outcomes
- Resources: what company have
+ Are the source of a firm’s capabilities.
+ Are broad in scope.
+ Cover a spectrum of individual, social and organizational phenomena.
+ Alone, do not yield a competitive advantage.
+ Are a firm’s assets, including people and the value of its brand name.
+ Represent inputs into a firm’s production process, such as:
● Capital equipment
● Skills of employees
● Brand names
● Financial resources
● Talented managers
+ Types of Resources
● Tangible resources
Financial resources
Physical resources
Technological resources
Organizational resources
● Intangible resources
Human resources
Innovation resources
Reputation resources
+ Tangible resources

+ Intangible resources
Since it has been note the major factor affecting the organization productivity is the human
factor, many organizations willingness to invest human resources development program in the
areas of communication skills, problem solving ability, leadership qualities, creativity and
others related skills. Employees are able to obtained new skills and knowledge in the training
programs in order to contribute to the organisational development such as productivity
improvement, preparation for organization’s growth, developing the learning culture and so
on.
- Capabilities: what company can do
+ Represent the capacity to deploy resources that have been purposely integrated to achieve a
desired end state
+ Emerge over time through complex interactions among tangible and intangible resources
+ Often are based on developing, carrying and exchanging information and knowledge
through the firm’s human capital
+ The foundation of many capabilities lies in:
The unique skills and knowledge of a firm’s employees
The functional expertise of those employees
+ Capabilities are often developed in specific functional areas or as part of a functional area.

https://global.toyota/en/company/vision-and-philosophy/toyotaway_code-of-conduct/
The Toyota Code of Conduct organizes the basic attitudes necessary for people working at the
company and in society, providing a description of basic conducts. It also details what is
required of employees and what needs to be kept in mind. Along with the Toyota Way 2020,
it is essential that each employee carries out the Guiding Principles at Toyota and fulfills their
social responsibilities.
- Core competencies: what company can do to be better
+ Resources and capabilities that are the sources of a firm’s competitive advantage:
Distinguish a company competitively and reflect its personality.
Emerge over time through an organizational process of accumulating and learning how to
deploy different resources and capabilities.
+ Activities that a firm performs especially well compared to competitors.
+ Activities through which the firm adds unique value to its goods or services over a long
period of time.
+ Building Core Competencies
Four Criteria of Sustainable Competitive Advantage

- Building Sustainable Competitive Advantage

https://slideplayer.com/slide/5197070/
https://www.slideshare.net/yashasvibhadoriya/lect-3-internalanalysis
https://www.slideshare.net/forshaf/industry-and-competitor-analysis-lec-5
 Chap 4: FOUNDATIONS OF PLANNING
What is planning?
- Planning is often called the primary management function because it establishes the basis/ standard
for all the other things managers do they organize, lead, and control
- It’s concerned with ends (what is to be done) as well as with means (how it’s to be done)
- Planning encompasses (bao gồm) defining the organization’s objectives or goals, establishing an
overall strategy for achieving those goals, and developing a comprehensive hierarchy of plans to
integrate and coordinate activities.

Managers should plan for at least 4 reasons

- Planning establishes coordinated effort. (Tạo động lực để làm việc) It gives direction to managers
and nonmanagers alike. When employees know where the organization or work unit is going and
what they must contribute to reach goals, they can coordinate their activities, cooperate with each
other, and do what it takes to accomplish those goals. Without planning, departments and individuals
might be working at cross-purposes, preventing the organization from moving efficiently toward its
goals.
- Planning reduces uncertainty by forcing managers to look ahead, anticipate change, consider the
impact of change, and develop appropriate responses. It also clarifies the consequences of actions
managers might take in response to change. Even though planning can’t eliminate change, managers
plan in order to anticipate changes or bad situations and develop the most effective response to them.
- Planning reduces overlapping and wasteful activities. If too many people do the same activities
that they think belong to their responsibilities and there will be overlapping and wasteful activities.
When work activities are coordinated around established plans, wasted time and resources and
redundancy can be minimized. Furthermore, when means and ends are made clear through planning,
inefficiencies become obvious and can be corrected or eliminated.
- Planning establishes the goals or standards that facilitate control. If managers are unsure of what
they are trying to accomplish, they will be unable to determine whether or not the goal has actually
been achieved, whether the performance of the employees is good or not since they have no standard
to compare with. In planning, goals and plans are developed. The actual performance is compared
against the goals, significant deviations are identified, and necessary corrective action is taken.
Without planning, there would be no way to control.

- The Hierarchy of Goals

In well-run companies, the goals from the top of the organization down to where you’re working should
form an unbroken chain (or “hierarchy”) of goals.
The hierarchy of goals diagram in Figure 3-1 summarizes this. At the top of the company, the president
and his or her staff set strategic goals. Lower-level managers (in this case, vice presidents) then set goals
(such as “Add one production line at Plant A”).
Without a clear plan at the top, no one in the company would have the foggiest notion of what to do. At
best, you’d all be working at cross-purposes.
What Are Some Criticisms of Formal Planning?

− Planning may create rigidity: Once the plans are made it is difficult to change them. The
existence of plan puts managerial activities in a rigid framework that is not very flexible.
Programmes are carried out according to plans. Managers become more concerned with observing
the rules and procedures as laid down in the plan rather than achieving the goals.
− Formal plans can’t replace intuition and creativity: For instance, the rapid rise of Apple
Computer in the late 1970s and throughout the 1980s was attributed in part to the creativity and
anti-corporate attitudes of one of its cofounders, Steven Jobs. But as the company grew jobs felt a
need for more formalized management something he was uncomfortable performing. He hired a
CEO, who ultimately ousted Jobs from his own company. With Job’s departure came increased
organizational formality – the very thing Jobs despised because it hampered creativity
− Planning focuses managers’ attention on today’s competition, not on tomorrow’s survival:
planning focuses on how to best capitalize on existing business opportunities within the industry.
It often does not allow for managers to consider creating or reinventing the industry.
Consequently, plans may result in costly blunders and incur catch up costs when others take the
lead. On the other hand, some companies have found much of their success to be the result of
forging into uncharted waters, designing and developing new industries as they go.
− Formal planning reinforces success, which may lead to failure: Success may breed failure in
an uncertain environment. It is hard to change or discard successful plans to leave the comfort of
what works for the anxiety of the unknown. Successful plans, however, may provide a false sense
of security – generating more confidence than they deserve. Managers often won’t deliberately
face that unknown until they are forced to do so by changes in the environment. But by then, it
may be too late.

Reason why small and medium sized companies don’t want to do/focus on planning
Follow plans is not flexible. The companies tend to focus on what is going on in the market, if focus on
plans only, they might lose a lot of chances
Organization is too small and there are a lot of things to do => always busy, don’t have time to spend on
planning and it not help them in order to take opportunities => rigidity
Have no ability to plan and have to hire consulting companies but the price/fee is very high.

What Do Managers Need to Know About Strategic Management?

Strategies
Plans for how the organization will do what it’s in business to do, how it will compete successfully, and
how it will attract its customers in order to achieve its goals
Take actions: Strategic Management: is what hat managers do to develop an organization’s strategies
Strategic Management Process: A six-step process that encompasses strategy planning, implementation,
and evaluation

External: Moi truong vi mo, cac nganh canh tranh

Internal:
- Văn hoá TC
- Các năng lực cốt lõi
- Tình hình tài chính
- Cơ cấu tổ chức
- Thương hiệu
- Khả năng của NV
- Khả năng nghiên cứu và phát triển
Mission: A statement of an organization’s purpose. Defining the mission forces managers to identify
what it’s in business to do. For instance, the mission of Avon is “To be the company that best understands
and satisfies the product, service, and self-fulfillment needs of women on a global level.” The mission of
Facebook is “a social utility that conncets you with the people around you”
Capabilities: An organization’s skills and abilities in doing the work activities needed in its businessCore
Competencies: The major value-creating capabilities of an organization
SWOT Analysis :The combined external and internal analyses
Strengths: Any activities the organization does well or any unique resources that it has
Weaknesses: Activities the organization doesn’t do well or resources it needs but doesn’t possess
Opportunities: Positive trends in the external environment
Threats: Negative trends in the external environment

⇨ After completing the SWOT analysis, managers are ready to formulate appropriate strategies is,
strategies that (1) exploit an organization’s strengths and external opportunities, (2) buffer or protect
the organization from external threats, or (3) correct critical weaknesses
What Are Various Types of Strategies?

Plan and strategy

Plan: Specific, short term, less sustainable
Strategy: General, long term, Sustainable

Level of strategy
CORPORATE-LEVEL STRATEGY
At the corporate level strategy however, management must not only consider how to gain a competitive
advantage in each of the line of businesses the firm is operating in, but also which businesses they should
be in in the first place. This level of strategy is only necessary when the company operates in two or more
business areas through different business units with different business-level strategies that need to be
aligned to form an internally consistent corporate-level strategy. That is why corporate strategy is often
not seen in small-medium enterprises (SME’s), but in multinational enterprises (MNE’s) or
conglomerates.
An organizational strategy that specifies what businesses a company is in or wants to be in and what it
wants to do with those businesses. The 3 main types of corporate strategies are growth, stability, and
renewal

Growth Strategy
- A corporate strategy in which an organization expands the number of markets served or products
offered either through its current business(es) or through new business(es).
- Because of its growth strategy, an organization may increase revenues, number of employees, or
market share.
● Some growth strategies include:
● Concentration: focuses on its primary line of business and increases the number of products
offered or markets served in this primary business Chiến lược tăng trưởng tập trung:
Kinh doanh trong một ngành duy nhất. Biện pháp: tăng doanh số, mở rộng thị trường, thành
lập cty mới như cty mẹ hoặc trong chuỗi cung ứng/phân phối.

● Vertical Integration: (da dang hoa tap trung)

- In backward vertical integration, the organization becomes its own supplier so it can control its inputs.
(example: Netflix provides a platform for produces of films, TV, and other content. However, the
company was reliant on third-parties to provide new content that its subscribers would like. In 2013,
Netflix decided to vertically integrate and enter the production business. So in turn, it not only
produced shows and films but also provides the distribution network through its streaming services.
This strategy has become vital as it has helped differentiate it from competitors and control the type of
shows that are made available.)
- In forward vertical integration, the organization becomes its own distributor and is able to control its
outputs (Amazon has vertically integrated much of its business. Not only does it act as a marketplace
for buyers and sellers – but it also offers its own products and services, as well as its own distribution
channel. So in effect, it has 3 stages in the supply chain. It sources the products, markets and sells
them on its website, and then distributes them)
● Horizontal Integration: combining/merging with competitors
- Facebook and Instagram: Facebook's acquisition of Instagram in 2012 for a reported $1 billion. Both
Facebook and Instagram operated in the same industry (social media) and shared similar production
stages in their photo-sharing services. Facebook sought to strengthen its position in the social sharing
space and saw the acquisition of Instagram as an opportunity to grow its market share, reduce
competition, and gain access to new audiences. Facebook realized all of these through its acquisition.
Instagram is now owned by Facebook but still operates independently as its own social media
platform
- Disney-Pixar: Walt Disney Company's $7.4 billion acquisition of Pixar Animation Studios in 2006.
Disney began as an animation studio that targeted families and children. However, the entertainment
giant was facing market saturation with its current operations along with creative stagnation.
Vertical + horizontal: Chiến lược đa dạng hoá tập trung
- Hoạt động trong các phân ngành mới, liên quan đến ngành KD chính của doanh nghiệp.
- Biện pháp: thông qua sáp nhập, mua lại, thành lập mới.

● Diversification: (da dang hoa to hop)

- Related diversification happens when a company combines with other companies in di fferent, but
related, industries. (Same factories, machines, distributions)
- Unrelated diversification is when a company combines with firms indi fferent and unrelated industries.
(1 company moving to a new industry: Vin moves from travelling and real estate inustry to vin school
vin mart, Vin fast(vehicles), Vin eco
- Process for company to diversify and how many businesses that company should open in to mangage
effectively
- Chiến lược đa dạng hoá tổ hợp
- Mở rộng h/đ sang các lĩnh vực không có quan hệ với các lĩnh vực đang KD

Stability Strategy: A corporate strategy in which an organization makes no significant changes continues
to do what it is currently doing. Thus the organization becomes stagnant, which means it neither grows
nor declines in growth. For example, the organization may continue to serve the same clients, offering
same products and services, maintaining its market share and sustaining the current business

Renewal Strategy: A corporate strategy that addresses declining organizational performance. The two
types of renewal strategies are retrenchment and turnaround strategies. Retrenchment strategy is used in
short run for minor problems and for more serious and drastic problem turnaround strategy is used. Both
the strategies require cutting costs and restructuring of organizational requirements.
Theo đuổi CL suy giảm khi:
Cạnh tranh gay gắt
Việc bãi bỏ các quy định ảnh hưởng đến hoạt động
Biện pháp:
Rút lui khỏi Lĩnh vực KD
Thu hẹp quy mô (lĩnh vực KD, nhân sự)

ALL IN ALL
If realize that we have opportunities strengths=> growth strategy
If don’t have strengths but have a lot of weaknesses, the outside environment creates threats=> renewal
strategy
Have strengths but the environment creates threats not opportunities or when the environment creates
opportunites but we have a lot of weaknesses and no abilities => Stability strategy

COMPETITIVE/ BUSINESS LEVEL STRATEGY

- Answer question “How do we compete?”, “How do we gain (a sustainable) competitive advantage
over rivals?”. The competitive-level strategy is aimed at gaining a competitive advantage by offering
true value for customers while being a unique and hard-to-imitate player within the competitive
landscape.
- Competitive Strategy: An organizational strategy for how an organization will compete in its
business(es) / sth that set them apart/ higher position than their competitors
- Competitive Advantage: What sets an organization apart; its distinctive edge
- Strategic Business units (SBUs): An organization’s single businesses that are independent and
formulate their own competitive strategy
- For a small organization in only one line of business or a large organization that has not diversified
into different products or markets, its competitive strategy describes how it will compete in its
primary or main market.
- For organizations in multiple businesses, however, each business will have its own competitive
strategy that defines its competitive advantage, the products or services it will offer, the customers it
wants to reach, and the like

Types of Competitive Strategies

- Cost Leadership Strategy: Competing on the basis of having the lowest costs in the industry =>
attract customer to buy due to low price (have to have big market, factories, huge number of products,
the more products you product the lower marginal cost, sell at low price to a lot of customers=> still
can increase profit => products can be standardized and produced in big scale, highly valued to
customers (they have to use every day, buy in big amount: food, minerals)
Cac yeu to anh huong
- 1. Quy mô sản xuất 2. Kinh nghiệm
- 3. Công nghệ “cứng” 4. Sự lựa chọn chính sách
- 5. Cách thức khai thác năng lực sản xuất 6. Cơ cấu tổ chức
- 7. Công nghệ “mềm” 8. Mức, độ liên kết+ sự ăn khớp các hoạt động
- 9. Sự chia sẻ hoạt động 10. Địa điểm:
EX1: WALMART
Walmart is a US multinational retail corporation that operates 11,484 supermarkets and discount stores
across 27 countries. Its competitive advantage strategy is based on selling branded products at low
costs, 15%-30% lower than their competitors, attracting the largest number of customers possible.
o Achieving low operational costs through automation & technology
o Have big contracts with the manufacturers, buy at big quantity
o Minimized spending on human resources (including very low wages)
o Working closely with suppliers that dominate industry brands
o Use their own transportation system to deliver
o Own fleet of 3,000 trucks & 12,000 trailers, cutting on outsourcing costs
o And even meeting with vendors to help them cut their own costs, building a win-win relationship
Additionally, Walmart implemented a satellite network system to share information through the
company’s network of stores, distribution centers, and suppliers.
EX2: IKEA
Needless to say, the famous Swedish furniture retailer has absolutely revolutionized the furniture
industry.
By producing huge quantities of standardized products that people can actually assemble themselves,
IKEA has gained a significant competitive advantage with its cost leadership strategy. Today, the
multinational group operates 433 stores across 52 countries.
IKEA is an absolute leader in the furniture industry when it comes to low costs, and here is why:
o Standardized products – as opposed to competitors, IKEA doesn’t offer personalized products.
Practically all of them are standardized, which allows the company to produce them in huge quantities
for all of its stores worldwide. And achieve economies of scales that smaller competitors are just not
able to.
o Self – assembly – the retailer seeks for suppliers who are able to manufacture quality subassemblies at
the lowest costs possible, with customers having to assemble the furniture themselves. Which is one
reason why their prices are so low, as IKEA doesn’t spend budget on employees for the assembly
process. You could hire them additionally, but they are not included in the basic product price.
o Outsourcing – as many other companies do, IKEA also outsources the manufacturing of its products
in low-wage countries, which allows them to cuts on costs additionally.

- Differentiation Strategy: Competing on the basis of having unique products

(products/service/people that serve) that are widely valued by customers
- 1. Đặc biệt sản phẩm 2. Sản phẩm hỗn hợp
3. Liên kết với các hãng khác 4. Cá biệt hoá sản phẩm
5. Sự phức tạp của sản phẩm 6. Marketing sản phẩm
7. Liên kết giữa các chức năng 8. Thời gian
9. Địa điểm 10. Danh tiếng
11. Dịch vụ và hỗ trợ khách hàng
Ex 1: HERMES

Exclusivity: The most important aspect of the company’s differentiation strategy isexclusivity. Of course, exc

Difficult access– you can’t simply enter a Hermés shop and purchase a Birkin bag. You need to have a histo

o
Waiting list– if you want a Birkin bag, you will not only have to wait for your invitation to purchase. You w

o
Lack of choice– now, if waiting for a few months wasn’t enough, you will most probably not have a saying

o
Scarcity– Hermés Birkin bags are handcrafted, and the lack of massive production processes, combined wit

Craftmanship: As I just mentioned, the Birkin bags, but also all the brand’s purses and handbangs, arehand-cra
 EX 2: TESLA

Product innovation: The first and most important point isproduct innovation. Tesla entered the automotive ind

But these are not the only aspects of Tesla’s product differentiation. Some others include: The possibility to cu

From the tech functionalities to the materials the cars are built it, it is no surprise that Tesla really managed to

Marketing strategy
Another point of differentiation for Tesla is their Marketing strategy…or the lack of one.

According to Forbes, the company focuses more onreferrals and word of mouth advertisingrather than traditio

And of course, let’s not forget that itsCEO Elon Muskis a walking advertisement himself. From his iconic inte

-
Focus Strategy: Competing in a narrow segment or niche with either a cost focus or a differentiation focus

Ex 1: HERMES

Exclusivity: The most important aspect of the company’s differentiation strategy isexclusivity. Of cours

Difficult access– you can’t simply enter a Hermés shop and purchase a Birkin bag. You need to have a histo

o
Waiting list– if you want a Birkin bag, you will not only have to wait for your invitation to purchase. You w

o
Lack of choice– now, if waiting for a few months wasn’t enough, you will most probably not have a saying

o
Scarcity– Hermés Birkin bags are handcrafted, and the lack of massive production processes, combined wit

Craftmanship: As I just mentioned, the Birkin bags, but also all the brand’s purses and handbangs, areh
 EX 2: TESLA

Product innovation: The first and most important point isproduct innovation. Tesla entered the automo

But these are not the only aspects of Tesla’s product differentiation. Some others include: The possibility to cu

From the tech functionalities to the materials the cars are built it, it is no surprise that Tesla really managed to
Marketing strategy
Another point of differentiation for Tesla is their Marketing strategy…or the lack of one.
According to Forbes, the company focuses more onreferrals and word of mouth advertisingrather than traditio

And of course, let’s not forget that itsCEO Elon Muskis a walking advertisement himself. From his iconic inte

-
Focus Strategy: Competing in a narrow segment or niche with either a cost focus or a differentiation fo

FUNCTIONAL STRATEGIES
Functional-level strategy: The strategies used in an organization’s various functional departments to
support the competitive strategy
- Functional-level strategy is concerned with the question “How do we support the business-level
strategy within functional departments, such as Marketing, HR, Production and R&D?”. These
strategies are often aimed at improving the effectiveness of a company’s operations within
departments. The goal is to align these strategies as much as possible with the greater business
strategy. If the business strategy is for example aimed at offering products to students and young
adults, the marketing department should target these people as accurately as possible through their
marketing campaigns by choosing the right (social) media channels. Technically, these decisions are
very operational in nature and are therefore NOT part of strategy. As a consequence, it is better to call
them tactics instead of strategies.
Departmental Managers’ Strategic Planning Roles
Figure 3-9 graphically illustrates how Southwest Airlines’ activities fit the firm’s low-cost strategy. The
larger (pink) circles represent the pivotal aims that support Southwest’s low-cost system. These pivotal
aims include limited passenger services and frequent reliable departures. Southwest’s departments each
must support these aims. For example, “limited passenger service” means no seat assignments. “Highly
productive ground crews” means high compensation, flexible union contracts, and employee stock
ownership, or in summary:
High Pay > Highly Productive Ground Crews > Frequent Departures > Low Costs
High compensation packages: They don’t have many employees and employees have to do multiple
tasks: do at cabin, serve customers => do more things than employees in other normal company, don’t
have high specialization in work. Customers feel that services is good and low price => l use products,
services more. The company also reduce cost of training or recruit new people because employees is loyal
and don’t want to change company.
FIGURE: Linking Company-Wide and HR Strategies

Basic Model of How to Align HR Strategy and Actions with Business Strategy

Example and explain how the company use functional level strategy to achieve the competitive
strategy
EX: apply cost leadership strategy in very big market. Decathlon S.A. is a French sporting goods retailer
and the largest sporting goods retailer in the world. There is a wide collection of products for all the
sports including football, baseball, basketball, cricket, badminton, etc. Decathlon also has all the items for
less popular sports like archery, billiard, darts, field hockey, roller skates, volleyball and even scuba
diving. Not just men, there is a separate and diverse section for women and kids as well.
Decathlon brand aims to encourage sports all over the world.
So, it makes sure every sporting gear is available at affordable prices. It has consistently maintained its
low prices by not compromising with quality. This is because of the optimization of internal processes in
design and logistics. Cost leadership, along with decent quality is the core competency of this brand.
Decathlon keeps its prices around 20 percent lower than its competitors.
Decathlon promotes itself as an innovative brand (marketing) with a high product-quality relation. It
uses its R&D to cater to consumer needs and communicates this to its users. Decathlon group has the
third largest Research and Development facility in France. The affordability factor with that quality is the
differentiator in Decathlon. All its distinctive features are portrayed through institutional publicity. It also
heavily promotes self-owned brand in a way which describe its constant thirst for innovation. These
brands are exclusively available at Decathlon stores. The unique customer in-store experience, where
people can spend time knowing more about the sport and enjoying their time is the differentiator, the
unique selling point of Decathlon. This USP is highlighted in its promotion campaigns. This concludes
the Decathlon marketing mix.
EX: Coca-Cola and its Differentiation Strategy. R&D department: improve the unique shape, the new
product (form, size,..) - zero light,... which meet the demand. Then when they join in other country, they
do research about that country deeply --> set the prices, the consumers' behavior. Marketing: Showing
that the products are for everybody and bring joy and happiness - instead of introducing about only the
product

How Do Managers Set Goals and Develop Plans?

Goals (objectives): Desired outcomes or targets. They guide managers’ decisions and form the criteria
against which work results are measured.
Plans: Documents that outline how goals are going to be met. They usually include resource allocations,
budgets, schedules, and other necessary actions to accomplish the goals.
Stated Goals: Official statements of what an organization says, and wants its stakeholders to believe, its
goals are. However, stated goals are often conflicting and influenced by what various stakeholders think
organizations should do
Real Goals: Those goals an organization actually pursues as shown by what the organization’s members
are doing
Traditional Goal Setting: Goals set by top managers flow down through the organization and become
sub-goals for each organizational area
When the hierarchy of organizational goals is clearly defined, it forms an integrated network of goals, or
a means-ends chain. Higher-level goals (or ends) are linked to lower-level goals, which serve as the
means for their accomplishment.
In other words, the goals achieved at lower levels become the means to reach the goals (ends) at the next
level. And the accomplishment of goals at that level becomes the means to achieve the goals (ends) at the
next level and on up through the different organizational levels. That’s how traditional goal setting is
supposed to work.
Mục tiêu thuộc cấp cao hơn là mục đích cho các mục tiêu cấp dưới
Mục tiêu của cấp thấp hơn là phương tiện để hoàn thành các mục tiêu cao hơn
Nguyên tắc:các mục tiêu sẽ được đưa ra ở cấp cao nhất và sau đó sẽ được phân chia thành các mục tiêu
nhỏ hơn phân bổ cấp dưới trong tổ chức.
Ưu điểm
+ Các nhà quản trị biết được điều gì là tốt nhất cho tổ chức
+ Mỗi nhân viên sẽ nỗ lực làm việc để đạt được mục tiêu đã đề ra trong phần trách nhiệm của họ.
Nhược điểm:
+ Mục tiêu chung chung, thiếu cụ thể.
+ Mục tiêu bị mất đi tính khách quan và tính đồng nhất xuyên suốt tổ chức

Instead of using traditional goal setting, many organizations use management by objectives (MBO),
a process of setting mutually agreed-upon goals and using those goals to evaluate employee
performance => 2 way directions of information: flow top to bottom and bottom to top.
4 yto cua MBO: Mục tiêu rõ ràng, Tập thể ra quyết định, 3. Có thời hạn, 4. Kiểm tra tiến độ thực hiện
* Quy trình MBO
1. Xác định mục tiêu tổng thể và chiến lược
2. Các mục tiêu chính được phân bố cho các đơn vị và phòng ban
3. Cán bộ quản lý các đơn vị phối hợp với cấp trên để xác định các mục tiêu cụ thể của đơn vị
4. Các mục tiêu cụ thể được phối hợp thiết lập cho tất cả các thành viên trong các phòng ban
5. Các kế hoạch hành động được cụ thể hoá và được các nhà quản trị và cấp dưới thông qua
6. Các kế hoạch hành động được triển khai
7. Tiến trình thực hiện các mục tiêu được kiểm tra thường xuyên, thông tin phản hồi được cung cấp
8. Việc hoàn thành các mục tiêu được thúc đẩy bởi hệ thống thường trên kết quả công việc
MBO uu diem: Thiết lập được những mục tiêu khó, cụ thể dẫn đến kết quả cao.
Đánh giá hiệu quả hoạt động tốt hơn
Cho phép nhân viên tham gia và tạo động lực cho nhân viên
Giúp cho sự kiểm tra đạt được hiệu quả
Cons: Nhấn mạnh vào những mục tiêu ngắn hạn
Tốn thời gian
Nhiều công việc quản lý trên giấy tờ hơn (vì nhiều người tham gia, nhiều khâu, qua nhiều lần xét duyệt và
quyết định)
Nhà quản lý theo đuổi các mục tiêu với bất kỳ mức chi phí nào.
PLANS
The most popular ways to describe plans are in terms of their: Breadth (strategic versus tactical); time
frame (long term versus short term), specificity (directional versus specific), and frequency of use (single
use chi dung 1 lan versus standing: can reuse the plan).
Breadth:
- Strategic Plans ke hoach chien luoc: Plans that apply to the entire organization and encompass the
organization’s overall goals
- Tactical Plans ke hoach chien thuat: Plans that specify the details of how the overall goals are to be
achieved
Time frame
- Long-term Plans: Plans with a time frame beyond three years
- Short-term Plans: Plans with a time frame of one year or less
Specificity:
- Specific Plans: Plans that are clearly defined and leave no room for interpretation
- Directional Plans: Plans that are flexible and set general guidelines
Frequency of use
- Single-use Plan
o A one-time plan specifically designed to meet the needs of a unique situation
- Standing Plans
o Plans that are ongoing and provide guidance for activities performed repeatedly

Commitment Concept: The idea that plans should extend far enough to meet those commitments made
when the plans were developed
Strategic Plan – A strategic plan is a high-level overview of the entire business, its vision, objectives,
and values. This plan is the foundational basis of the organization and will dictate decisions in the long
term. Crucial components include the vision, mission, and values.
Tactical Plan – The tactical plan describes the tactics the organization plans to use to achieve the
ambitions outlined in the strategic plan. It usually has a scope of a year or less and breaks down the
strategic plan into smaller more actionable chunks. Components include specific goals with fixed
deadlines, budgets, and resources.
Operational Plan – The operational plan describes the day to day running of the company. The
operational plan charts out a roadmap to achieve the tactical goals within a realistic timeframe. This plan
is highly specific with an emphasis on short-term objectives. These can include policy, rules, and
procedure.

Entrepreneurship: The process of starting new businesses, generally in response to opportunities

Entrepreneurial Ventures: Organizations that pursue opportunities, are characterized by innovative
practices, and have growth and profitability as their main goals
In contrast to entrepreneurial ventures: Small Business: An independent business having fewer than 500
employees that doesn’t necessarily engage in any new or innovative practices and that has relatively
little impact on its industry

What’s in a Full Business Plan?

• Executive Summary
– Summarizes the key points that the entrepreneur wants to make about the proposed
entrepreneurial venture
• Analysis of Opportunity
– Sizes up the market by describing the demographics of the target market
– Describes and evaluates industry trends
– Identifies and evaluates competitors
• Analysis of the Context
– Describes the broad external changes and trends taking place in the economic,
political-legal, technological, and global environments
• Description of the Business
– Describes how the entrepreneurial venture is going to be organized, launched, and
managed
• Financial Data and Projections
– Cover at least three years and contain projected income statements,cash flow
analysis, balance sheets, breakeven analysis, and cost controls.
 Chap 5: ORGANIZATIONAL STRUCTURE AND CULTURE
What is organizing?
Once the organization’s goals, plans, and strategies are in place, managers must develop a structure that
will best facilitate the attainment of those goals.
Organizing: The function of management that creates the organization’s structure
Organizational Design: When managers develop or change the organization’s structure
Vdu when want to change from differentiation to cost leadership => change organizational structure;
when first establish the business, don’t have organizational structure (first appear in the market)=>
create the organizational structure.
Work Specialization: Dividing work activities into separate job tasks; also called division of labor.
Individual employees “specialize” in doing part of an activity rather than the entire activity in order to
increase work output. People only focus on main job tasks=> skillful=> increase productivity.
Organizational chart: the model that describes organizational structure/design.

At some point, the human diseconomies from division of labor surface as boredom, fatigue, stress, low
productivity, poor quality, increased absenteeism, and high turnover exceed the economic advantages
(see Exhibit 5-1)
Firstly if workers do specific tasks, it may become boring and their productivity may fall as a result.
High levels of specialization could lead to possible diseconomies of scale.
If an assembly line becomes highly specialized, production could be brought to a halt if there is a
blockage in one area. It can be beneficial if there are more people specialized in different aspects. (kiểu
speed và pressure cao có ng đáp ứng đc có ng ko thì sẽ làm chậm tiến độ hoặc đứt gãy chuỗi sản xuất:
process stops at the middle)
What Is Departmentalization?
Departmentalization: phân khâu: How jobs are grouped together
 There are five common forms of departmentalization although an organization may use its own unique
classification. No single method of departmentalization was advocated by the early writers. The method
or methods used should reflect the grouping that would best contribute to the attainment of the goals of
the organization and the individual units.
- Functional Departmentalization: Grouping activities by functions performed
For example, a manufacturing company may create a production department, sales and marketing
department, an accounting department, and a human resources department. Functional
departmentalization may be advantageous because it can increase efficiency and expertise since all
related activities are performed in one place by one group of people that specialize in that activity.
- Product Departmentalization: Grouping activities by major product areas
- Customer Departmentalization: Grouping activities by customer
The grouping of the organization according to the different classes of customer or clients. It focuses on
special customer needs.
- Geographic Departmentalization: Grouping activities on the basis of geography or territory
This is often a good idea for large multinational firms with offices around the world. All activities
related to the organization's activities in each region are handled by a department in that region. One
advantage of this method is that it ensures the development of expertise specific to the political, social,
and cultural needs of the region. Sending managers to work in each region provides excellent training
for upper level management positions where a broad perspective is required for success.
- Process Departmentalization: Grouping activities on the basis of work or customer flow
These departments require manpower and material so as to carryout operations.
casting -> pressing -> finishing -> inspection and shipping

Cross-functional Teams: Teams made up of individuals from various departments and that cross
traditional departmental lines. Gather together, when project is finished pp come back to their
department
 What Are Authority and Responsibility?
Chain of Command: The line of authority extending from upper organizational levels to lower levels,
which clarifies who reports to whom
Authority: The rights inherent in a managerial position to give orders and expect the orders to be
obeyed
Responsibility: An obligation to perform assigned duties
When managers delegate authority, they must allocate commensurate responsibility. That is, when
employees are given rights, they also assume a corresponding obligation to perform

The operation manager position

- Responsible for helping build upon PING’s internal quality and engineering knowledge base,
specifically as it applies to key process related items that will aid design engineers in improving their
ability to design for manufacturability, aid in specification development, and eliminate design
loopbacks.
- Responsible for understanding, following, and supporting all pertinent ISO procedures.
- Responsible for understanding and following all pertinent company and departmental policies,
procedures, and protocols.
- Responsible for remaining current within their area of expertise, not only relative to the market, but in
relation to known published advances in the pertinent specific body of knowledge.
- Other duties may be assigned by Management.

What are Different Types of Authority Relationships?

- Line Authority: Authority that entitles a manager to direct the work of an employee.
- Staff Authority : Positions with some authority that have been created to support, assist, and advise
those holding line authority.
- Chain of Command: The line of authority extending from upper organizational levels to lower levels,
which clarifies who reports to whom

What is power quyền lực?

Authority quyền hạn goes with the job. Power, on the other hand, refers to an individual’s capacity
to influence decisions. Authority is part of the larger concept of power. Have au=> have power;
have power=> may not have au because need position to affect pp’ decisions. That is, the formal rights
that come with an individual’s position in the organization (authority) are just one means by which an
individual can affect the decision process (power)
Authority is based on the perceived legitimacy of the individual in power.

Nghe si keu goi tu thien: referent power not expert power vi expert phai la decisions related to their
field.

What is span of control?

Span of Control: The number of employees a manager can efficiently and effectively supervise
Although early writers came to no consensus on a specific number, most favored small spans—
typically no more than six workers—in order to maintain close control

Left (narrow span of control): 6 levels of managers, distance btw top and bottom is very high so the in4
flow is slow, salary to pay for all 1365 managers is a lot, depending on the efficiency the left one is not
as efficient as the right one but cannot decide which one is more effective, use this when have
complicated tasks require employees to have lots of knowledge, skills
Right (large span of control): 4 levels of managers, is more efficient, use this when have simple tasks
repetitive activities, behaviors => big sized company
Big sized company, in order to economize they have to increase the span of control, reduce the layer
of the managers as well as reducing salaries for the managers.

What is Formalization?
Formalization chính thức hóa: How standardized an organization’s jobs are and the extent to which
employee behavior is guided by rules and procedures,
If company have high level of formalization, employees have to wait for permission instruction,
guide of the managers. If have low level of formalization employees can make decisions
themselves.
Centralization: The degree to which decision making takes place at upper levels of the organization
Decentralization: The degree to which lower-level managers provide input or actually make decisions

What Contingency Variables Affect Structural Choice?

Mechanistic Organization: A bureaucratic organization; a structure that’s high in specialization,
formalization, and centralization => rigid
Organic Organization: A structure that’s low in specialization, formalization, and centralization =>
flexible
The mechanistic organization (or bureaucracy) was the natural result of combining the six elements of
structure. Adhering to the chain-of-command principle ensured the existence of a formal hierarchy of
authority, with each person controlled and supervised by one superior
The organic organization is a highly adaptive form that is as loose and flexible as the mechanistic
organization is rigid and stable. Rather than having standardized jobs and regulations, the organic
organization’s loose structure allows it to change rapidly as required
How Does Technology Affect Structure?
Unit Production: The production of items in units or small batches
Mass Production: Large-batch manufacturing
Process Production: Continuous flow of products being produced

Differences between Ford and Toyota automobile production

Ford: Mass production: demand of the customers is high and only focuses on 1 or several types of
products=> need to produce for the big market=> mass
Toyota: Process Production: Japan, demand for one type of product is not big, they want different types
of products=> demand for each products in each period is varied => process (how many lexus in 1
month, how many cambric 1 one month) => have plans for production line
Japan is very famous for “just in time” theory: Toyota structure allow the company to reduce the cost of
inventory. Furthermore, Toyota implements Activity-Based Costing strategy which track cost in term of
activities, so operating in this way the company can greatly comply to its strategic objectives. Therefore,
the company easily identify the activity that do not add value to the company and cut down the cost of it
as well as assure the quality of the product.
Simple Structure: An organizational design with low departmentalization, wide spans of control,
authority centralized in a single person, and little formalization
Functional Structure: An organizational design that groups similar or related occupational specialties
together
Divisional Structure: An organizational structure made up of separate business units or divisions
Contemporary Designs in boundaryless structure
Virtual Organization: An organization that consists of a small core of full-time employees and outside
specialists
Network Organization: An organization that uses its own employees to do some work activities and
networks of outside suppliers to provide other needed product components or work processes
 What is Organizational Culture?
Organizational culture: the shared values, principles, traditions, and ways of doing things that
influence the way organizational members act. In most organizations, these shared values and
practices have evolved over time and determine, to a large extent, how “things are done around here”
Organizational Culture Components/Levels
- 2 Components: Iceberg Model
Visible (symbols, languages,…) and invisible (norms, values, beliefs,…) that can influences visible.

- Schein’s (1985): 3 Components

- Hofstede’s (1985) Model: 4 Components

Values can influence all the outside layers

 An organization’s culture may have an effect on its structure, depending on how strong, or weak, the
culture is. Strong cultures—those in which the key values are deeply held and widely shared—have
a greater influence on employees than do weaker cultures. The more employees accept the
organization’s key values and the greater their commitment to those values, the stronger the culture is

How to maintain organizational culture?

ASA framework: Attraction; Selection; Attrition
Socialization
Changes in leadership: Policies & Rules; Communication
Changes through M&A
 Chap 6: LEADER SHIP AND TRUST
Who Are Leaders, and What Is Leadership?
Leader: Someone who can influence others and who has managerial authority (Leader=> manager;
manager may not be leader)
Leaders: work with employees, think out of the box, think about long futures, goals, like to take risks,
do sth new, lead people and stay at the first, can create the values
Managers: Assign the work to employees, follow 4 functions planning organizing leading and
controlling so that leading is the requirement of a manager, make sure the work is in correct direction,
think about everyday performance, stay behind and push employees to do the job, follow the policies,
procedures and count the values
Leadership: The process of leading a group and influencing that group to achieve its goals

Trait Theories of Leadership: Theories that isolate characteristics (traits) that differentiate leaders
from nonleaders (trustworthiness, people skills, competency, intelligence, decisiveness, creativity)
 1 ⬄2, 3 ⬄ 4, 5 ⬄6

Behavioral Theories of Leadership: Theories that isolate behaviors that differentiate effective
leaders from ineffective leaders

- Autocratic Style: A leader who centralizes authority, dictates work methods, makes unilateral
decisions, and limits employee participation
- Democratic Style: A leader who involves employees in decision making, delegates authority,
encourages participation in deciding work methods, and uses feedback to coach employees
- Laissez-Faire Style: A leader who generally gives employees complete freedom to make decisions
and to complete their work however they see fit

How Did the University of Michigan Studies Differ?

Also developed two dimensions of leadership behavior
Employee Oriented: A leader who emphasizes the people aspects.
Production Oriented: A leader who emphasizes the technical or tas

k aspects

Identified 5 styles for management

- impoverished management
- task management
- middle-of-the-road management
- country club
- team management
The Mangagerial Grid: A two-dimensional grid for appraising leadership styles based on
- (1, 1) low concern for pp (vertical) and product (horizontal): Impoverished management: exertion of
minimum effort to get required work done is appropriate to sustain organization membership
- (1, 9) Country club management: Thoughtful attention to needs of pp for satisfying relationship leads
to a comfortable, friendly organization atmosphere and work tempo.
- (9, 1) Task management: Efficiency in operations results from arranging conditions of work in such a
way that human elements interfere to a minimum degree.
- (9, 9) Team management: work accomplished is from committed pp; interdependence through a
“common stake” in organization purpose leads to relationships of trust and respect.
- (5, 5) Middle of the road management: adequate organization performance is possible through
balancing the necessity to get out work with maintain morale of pp at a satisfactory level. Maybe not
so effective (Cái gì cũng muốn làm nhưng nguồn lực lại hạn chế, nửa vời)

How Do Followers’ Willingness and Ability Influence Leaders?

Situational Leadership Theory (SLT): A leadership contingency (ngau nhien) theory that focuses on
followers’ readiness
Readiness: The extent to which people have the ability and willingness to accomplish a specific task
- R1: People are both unable and unwilling to take responsibility for doing something. Followers
aren’t competent or confident.
- R2: People are unable but willing to do the necessary job tasks. Followers are motivated but lack the
appropriate skills.
- R3: People are able but unwilling to do what the leader wants. Followers are competent, but don’t
want to do something.
- R4: People are both able and willing to do what is asked of them
Four Situational Styles
- Telling (high task–low relationship:R1): The leader defines roles and tells people what, how, when,
and where to do various tasks
- Selling (high task–high relationship:R2): The leader provides both directive and supportive
behavior
- Participating (low task–high relationship: R3): The leader and followers share in decision making;
the main role of the leader is facilitating and communicating
- Delegating (low task–low relationship: R4): The leader provides little direction or support
R1: the leader needs to use the telling style and give clear and specific directions
R2: the leader needs to use the selling style and display high task orientation to compensate for the
followers’ lack of ability, give instruction and tell them what to do + display high relationship
orientation, supportive behavior to get followers to completely believe in the leader’s desires, if
managers put effort in R2, direct and encourage, the performances will be much higher and employees is
loyal to organization
R3: the leader needs to use the participating style to gain their support, if managers put effort in R3
pull them close to organization, give them chance to participate in activities, decision making process,
communicate encourage to know why they are unwilling
R4: the leader doesn’t need to do much and should use the delegating style.
R1 R4 managers don’t have to put effort and resources into

What Do Contemporary Views of Leadership Tell Us?

Transactional Leaders: Leaders who lead primarily by using social exchanges (or transactions)
Transformational Leaders: Leaders who stimulate and inspire (transform) followers to achieve
extraordinary outcomes. Transformational leadership is a leadership style that can inspire positive
changes in those who follow. Transformational leaders are generally energetic, enthusiastic, and
passionate. Not only are these leaders concerned and involved in the process; they are also focused
on helping every member of the group succeed as well, give not only rewards and money to employess

How Do Charismatic and Visionary Leaders Differ?

Charismatic Leaders: Enthusiastic, self-confident leaders whose personalities and actions influence
people to behave in certain ways
Visionary Leadership: The ability to create and articulate a realistic, credible, and attractive vision of the
future that improves on the present situation
Why Do Leaders Need to Empower Employees?
Empowerment: The act of increasing the decision-making discretion of workers
Those at the lower levels of the organization often have the knowledge to make quick decisions

Trust is the Essence of Leadership

Credibility: The degree to which followers perceive someone as honest, competent, and able to inspire
Trust: The belief in the integrity, character, and ability of a leader
 Chap 7: MOTIVATING AND REWARDING EMPLOYEES
Motivation
- The process by which a person’s efforts are energized, directed, and sustained toward attaining a goal
- Individuals differ in motivational drive
- Overall motivation varies from situation to situation
Three Elements of Motivation This definition has 3 key elements:
1. Energy - a measure of intensity or drive.
2. Direction - effort channeled in a direction that benefits the organization.
3. Persistence - when employees persist in putting forth effort to achieve those goals.

Maslow’s hierarchy of needs theory

Maslow was a psychologist who proposed that within every person is a hierarchy of 5 needs:
1. Physiological needs lowest level in the hierarchy: These most basic human survival needs include
food and water, sufficient rest, clothing and shelter, overall health, and reproduction. Maslow states that
these basic physiological needs must be addressed before humans move on to the next level of fulfillment
2. Safety needs: include protection from violence and theft, emotional stability and well-being,
health, security, and financial security.
3. Social needs: relate to human interaction and are the last of the so-called lower needs, needs of
connecting with other pp in society. Friendships and family bonds—both with biological family
(parents, siblings, children) and chosen family (spouses and partners). Additionally, membership in social
groups contributes to meeting this need, belonging to a team of coworkers, a union, club, or group of
hobbyists.
4. Esteem needs: The higher needs, beginning with esteem, are ego-driven needs. The primary
elements of esteem are self-respect (the belief that you are valuable and deserving of dignity) and self-
esteem (confidence in your potential for personal growth and accomplishments) => self-esteem can be
broken into two types: esteem which is based on respect and acknowledgment from others, and esteem
which is based on your own self-assessment. Self-confidence and independence stem from this latter type
of self-esteem.
5. Self-actualization needs highest level: the fulfillment of your full potential as a person
(sometimes called self-fulfillment needs). Self-actualization needs include education, skill development
—the refining of talents in areas such as music, athletics, design, cooking, and gardening—caring for
others, and broader goals like learning a new language, traveling to new places, and winning awards. =>
increase money, relax
What Are McGregor’s Theory X and Theory Y?
Douglas McGregor is best known for proposing two assumptions about human nature:
- Theory X: The assumption that employees dislike work, are lazy, avoid responsibility, and must be
coerced to work
This kind of employee: he have the safety jobs until retire => have demand of money, lower level of need
=> managers need to know about the demand, needs and desires and characteristic of this kind =>
influence them how to have good behaviors towards work, abilities to work
- Theory Y: The assumption that employees are creative, enjoy work, seek responsibility, and can
exercise self-direction
This kind of employees: good attitudes => his needs are at higher level (esteem and self-actualization) =>
give them the chance in order to explore their talents

What Is Herzberg’s Two-Factor Theory? (also called motivation-hygiene theory)

Herzberg’s two-factor theory proposes that: Intrinsic factors are related to job satisfaction while extrinsic
factors are associated with job dissatisfaction
- Hygiene Factors (extrinsic): Factors that eliminate job dissatisfaction but don’t motivate.
- Motivators (in): Factors that increase job satisfaction and motivation

Work itself: employees may not find all their tasks interesting or rewarding, but you should show the
employee how those tasks are essential to the overall processes that make the practice succeed. You
may find certain tasks that are truly unnecessary and can be eliminated or streamlined, resulting in greater
efficiency and satisfaction.
⇨ Motivators are related to Maslow’s higher needs (top 2 highest)

⇨ Hygiene factors are related to Maslow’s lower needs (top 3 lowest)

What Is Equity Theory?

Equity Theory: The theory that an employee compares his or her job’s input-outcomes ratio with that of
relevant others and then corrects any inequity
Referent: The persons, systems, or selves against which individuals compare themselves to assess equity
Distributive Justice: Perceived fairness of the amount and allocation of rewards among individuals
Procedural Justice: Perceived fairness of the process used to determine the distribution of rewards

What Is Goal-Setting Theory?

Goal-Setting Theory: Specific goals increase performance. Difficult goals, when accepted, result in
higher performance (nếu mà không đc accept thì những công nhân theo theory X sẽ lười biếng và k làm
vc dẫn tới lower performances)
Self-Efficacy: An individual’s belief that he or she is capable of performing a task
Individual has internal locus of control: everything happens to them is because of their abilities,
actions. If external locus: they tend to blame external factors instead of themselves (do loi cho ngoai
canh)
How Does Job Design Influence Motivation?
Job Design: The way tasks are combined to form complete jobs
Job Characteristics Model (JCM): A framework for analyzing and designing jobs that identifies 5
primary core job dimensions, their interrelationships, and their impact on outcomes
Job Enrichment/Enlagrement: The vertical expansion of a job by adding planning and evaluation
responsibilities

Core job dimensions

1. Skill variety, the degree to which a job requires a variety of activities so that an employee can use a
number of different skills and talents. (actions: combine tasks, establish clients relationships)
2. Task identity, the degree to which a job requires completion of a whole and identifiable piece of
work. (combine tasks, form natural work units)
3. Task significance, the degree to which a job has a substantial impact on the lives or work of other
people. (form natural…)
4. Autonomy, the degree to which a job provides substantial freedom, independence, and discretion to
the individual in scheduling the work and determining the procedures to be used in carrying it out.
(expand jobs vertically)
5. Feedback, the degree to which doing work activities required by a job results in an individual
obtaining direct and clear information about the effectiveness of his or her performance. (open feedback
channels, establish clients rela)

How Does Expectancy Theory Explain Motivation?

Expectancy theory states that an individual tends to act in a certain way based on the expectation that the
act will be followed by a given outcome and on the attractiveness of that outcome to the individual.

1. Expectancy or effort-performance linkage is the probability perceived by the individual that exerting
a given amount of effort will lead to a certain level of performance.
2. Instrumentality or performance-reward linkage is the degree to which the individual believes that
performing at a particular level is instrumental in attaining the desired outcome.
3. Valence or attractiveness of reward is the importance that the individual places on the potential
outcome or reward that can be achieved on the job. Valence considers both the goals and needs of the
individual.

Motivating a Diverse Workforce

Compressed Workweek: A workweek in which employees work longer hours per day but fewer days
per week
Flexible Work Hours (flextime): A scheduling system in which employees are required to work a
certain number of hours per week but are free, within limits, to vary the hours of work
Job Sharing: When two or more people split (share) a fulltime job
Telecommuting: A job approach in which employees work at home but are linked by technology to the
workplace
To maximize motivation among today’s workforce, managers need to think in terms of flexibility. For
instance, studies tell us that men place more importance on having autonomy in their jobs than do women.
In contrast, the opportunity to learn, convenient and flexible work hours, and good interpersonal relations
are more important to women.
A diverse array of rewards is needed to motivate employees with such diverse needs.

Designing Appropriate Rewards Programs

Open-Book Management: An organization’s financial statements are shared with all employees
Employee Recognition Programs: Programs that consist of personal attention and expressions of
interest, approval, and appreciation for a job well done
Pay-for-Performance Programs: Variable compensation plans that pay employees on the basis of some
performance measurement

Carrot and stick method to motivate employees

Stick: use the power, punishment to make employees to finish task => negative because motivation
comes from fear of being punished => not for long time
Carrot: rewards, benefits that give to employees => Should apply in a flexible way

Motivation methods of some companies

 Chap 8: FOUNDATIONS OF CONTROL
Control: The management function that involves monitoring activities to ensure that they’re being
accomplished as planned and correcting any significant deviations

Control Process: A three-step process of measuring actual performance, comparing actual performance
against a standard, and taking managerial action to correct deviations or to address inadequate standards
Steps:
Establishing standards and methods for measuring performance.
Measuring performance.
Determining whether performance matches the standard.
Taking corrective action.

How Do Managers Measure?

To determine actual performance, a manager must first get information about it. Thus, the first step in
control is measuring
4 common sources of information frequently used to measure actual performance are
– personal observation
– statistical reports
– oral reports
– written reports
Management by walking around (MBWA) is a phrase that is used to describe when a manager is out in
the work area, interacting directly with employees, and exchanging information about what’s going on.
Management by walking around can pick up factual omissions, facial expressions, and tones of voice that
may be missed by other sources.

How Do Managers Compare Performance to Planned Goals?

Range of Variation: The acceptable parameters of variance between actual performance and a standard
Deviations outside this range need attention

What Management Action Can Be Taken?

Managers can choose among 3 possible courses of action: do nothing, correct the actual performance, or
revise the standards.
One decision that a manager must make is whether to take immediate corrective action, which corrects
problems at once to get performance back on track, or to use basic corrective action, which looks at how
and why performance deviated before correcting the source of deviation

Types of control dived by When Does Control Take Place?

- The most desirable type of control—feedforward control—prevents problems since it takes place
before the actual activity. (-> inputs: anticipates problems) For instance, when McDonald’s opened its
first restaurant in Moscow, it sent company quality control experts to help Russian farmers learn
techniques for growing high-quality potatoes and to help bakers learn processes for baking high-quality
breads.
- Concurrent control, as its name implies, takes place while a work activity is in progress. (->
process: Corrects problems as they happen) For instance, the director of business product management
at Google and his team keep a watchful eye on one of Google’s most profitable businesses—online ads
- The most popular type of control relies on feedback. In feedback control, the control takes place after
the activity is done (-> output: corrects problems after they occur).

How Do Managers Keep Track of Finances?

In order to meet profitability goals, managers need financial controls
Traditional financial measures managers might use include: ratio analysis and budget analysis
• Liquidity ratios: measure an organization’s ability to meet its current debt obligations
• Leverage ratios: examine the organization’s use of debt to finance its assets and whether it’s able to
meet the interest payments on the debt
• Activity ratios: assess how efficiently a company is using its assets.
• Profitability ratios: how efficiently and effectively the company is using its assets to generate profit