Introduction Business Administration

1
Introduction Business Administration

• Session 2 Managing People

2
Fords improvementthe assembly line

• Ford improved the primary process of producing
  cars from a project lay out to product lay out
  They lay out of the plant was optimized for the
  product an production line.
• What did this mean for the workers?
• What did this mean for their managers?

3
Workers/Managers

• Workers specialize to become more efficient
• Managers manage to improve efficiency of workers
  (procedures, pauses, control)
• Paradigm Humans are machines and can be
  programmed.

4
Hawthorne experiments

• Conditions of workers were changed frequently,
  more autonomy
• Productivity increased..temporarily
• It was the attention not the changes that
  improved productivity.
• Managing is about human relationships.

5
Positive versus negative incentives

• Many management concepts are based on the idea of
  controlling whether people are doing things
  right, rather than on trying to stimulating them
  to do it right.
• Demings Total Quality Management approach took
  the positive approach

6
Demings 14 points

• Constancy of purpose for improvement
• Adopt the new philosophy
• Cease dependency on mass inspection
• End the practice of awarding business on the
  price tag alone
• Improve constantly and forever the system of
  production and service
• Institute job training and retraining
• Institute leadership

7
Demings 14 points (continued)

• Drive out fear
• Break down all barriers between staff areas
• Eliminate slogans, exhortations, targets for the
  work force
• Eliminate numerical quotas
• Remove barriers to pride of workmanship
• Institute a vigorous program of education and
  retraining
• Take action to accomplish the transformation

8
Motivating people

• ERG theory Existence, Relationships, Growth.
• ? Manage on ERG needs
• Equity theory ratio of persons inputs to
  outcomes, compared to a relevant other person
• ? Manage on understanding group dynamics

9
Authority relationships

• Yale experiment
• Boss encouraging teacher to use electro-
  shocks to train a pupil
• Teacher test person teaching with punishment by
  electroshocks of increasing voltage (up to 450
  volt)
• Pupil professional actor simulating painfull
  responses to shocks

10
Result of test

• More than 50 of test persons exercised shocks to
  maximum of 450 volt after encouragement by boss,
  despite being informed of possible results.
• Respecting authority is a very natural
  relationship attitude.
• Very useful in large organizations.
• Bad when innovation and disobedience is required.

11
Employer Employee relationship

• Traditional view
• Employer has a authority hierarchy
• Employee works hard and gets rewarded
• Contemporary view
• Employer and Employee have a common goal, or
• Employer guarantees employability
• ? These new views are needed in the quickly
• changing environment of the global economy!

12
Groups and Teams

• The 5 phases of group development
• Forming ? testing each other out
• Storming ? fight for power
• Norming ? setting up norms
• Performing ? do the real work
• Adjourning ? sharing credits

13
Groups Teams

• Organizations consist of groups of people who
  work together in several constellations over
  time.
• Unsuccessful groups are groups that have not
  completed one of the previous steps.
• Self organizing teams (Deming!) are groups that
  organize and manage themselves to reach a common
  goal.

14
Organizational level

• Traditional view
• Choose an organizational design that fits the
  strategic direction of the company
• Current view Choose an organizational design
  that facilitates
• 1. change
• 2. organizational learning

15
Managing change

• Create a sense of urgency
• Create a guiding coalition
• Develop a vision and strategy
• Communicate the changed vision
• Empower broad based action
• Generate short term wins
• Consolidate gains
• Anchor new approaches in the culture

16
Organizations that went to a significant change

• General Motors, after being under attack from
  Japanese Car Manufacturers (Deming)
• ABP, needing to change from a public institution
  to a competitive firm
• Oce, changing from a nationally oriented firm,
  towards a customer focused supply chain operator.

17
Human Resource Management

• Entry and exit processes
• Growth and development of employees
• Reward and recognition systems
• How people are treated

18
Entry and exit

• Hiring is easy....?
• Mix of work force
• Gender based issues ( management training
  programs, day care centers)
• Exit strategies in big lay offs
• Outsourcing non core activities

19
Growth and development

• Less management means less promotion
  opportunities
• Growth and development can be in terms of
  knowledge ? in company training programs
• Development into ownership, GE and Walmart

20
Guidelines for managing people

• Communication with employees
• Distinguish people
• Fairness and openness
• Be constructively critical of authority
• Sensitive to diversity
• Understand groups and teams
• Be a change leader
• Focus on learning