Management 1: management & environment (planning)
Organizations
Organization: a deliberate arrangement of people brought together to accomplish some specific purpose.
- Goal orientation: organizations are geared towards specific purposes. These purposes do not have to be
identical with the personal purposes of the organization members. This does not imply that the purposes
pursued must be in a consistent order with one another.
- Division of labor/tasks: organizations consist of several people whose task activities are divided and linked
according to an intended rational pattern.
- Permanent boundaries: organizations have boundaries that allow for differentiating between the
organizational inner and outer world.
Organization competitors and markets industry/sector
macro-environment
The environment of an organization
Macro-environment:
- PESTEL-Analysis: an important strategic analysis tool
that evaluates the effects of external influencing
factors (Marketing 2) on your own company.
Political, Economic, Social, Technological, Ecological,
Legal
Industry/sector:
- 5-forces analysis
- Competitive strategies: (management 2)
Industrywide: cost leadership, differentiation
Particular segment: focus
Connecting the environment and the firm via SWOT-analysis:
Analysis of the firm analysis of the strength and weaknesses (analysis of the
competitors) analysis of the opportunities and threats (analysis of the macro
environment) strategic decisions (management 2)
Stakeholders: all actors that have an interest in the organization and can either
affect or be affect by its goals decisions and actions.
Stakeholder-management steps: stakeholder identification (mapping)
1. Identifying relevant stakeholders and their interests;
2. Evaluating stakeholders and their importance;
3. Implementing measures towards specific stakeholder groups and single
stakeholders
Quantitative decision making and uncertainty
,The optimistic manager will typically follow a maximax choice (maximizing the maximum possible payoff)
The pessimist will often pursue a maximin choice (maximizing the minimum possible payoff) (in elke rij kijken en
daar de laagste selecteren. Daarna moet je het laagste
getal kiezen met de hoogste waarde. In het voorbeeld
17, dus S4)
Management 2: Organizational decision-making and managing change
Decision making
Decision-making process
1. Problem identification: comparison between current reality and some standard/desired state. Vergelijking
tussen nu en de ideale situatie. Als je je probleem niet juist definieert/identificeert zul je nooit een oplossing
vinden. O.b.v: past performance, previously set goals, other organizations.
2. Identifying criteria: factors that are relevant for the decision. (cost, time, risk).
3. Weighting criteria: weigh the factors with their relative priority (e.g., 0-10).
4. Developing alternatives: list alternatives that could solve the problem.
5. Analyzing alternatives: compare with previously set criteria and weights.
6. Selecting alternatives: choose alternatives that are most likely to solve the problem.
7. Implementing alternatives: put decision in action. Who is affected (getroffen)?, are they committed
(betrokken in het decision-making proces)?
Common decision-making errors and bias
Heuristics: vuistregels om de beslissing makkelijker te maken.
Overconfidence: thinking you know more than you do – unrealistically positive views of yourself.
Immediate gratification: wanting immediate rewards – quick payoff [“marshmallow test”: nu 1 marsmallow
of later 2?]
Anchoring effect: fixate on initial information – fail to adjust to new information later. (sollicitatie, CV)
Selective perception: seeing what you want to see – ignoring opposing views.
Confirmation bias: interpret information in a way that confirms your own assumptions.
Framing bias: selecting and highlighting certain aspects while disregarding others.
Availability bias: remembering events that are most recent in your memory.
Representation bias: likelihood of an event based on how closely it resembles other events.
Randomness bias: trying to find meaning in random events.
Sunk costs error: forgetting that current choices cannot correct the past – accept losses! Focus on the
future!
Self-serving bias: taking credit for successes but blaming failures on outside factors
Hindsight: Falsely believing that you would have accurately predicted the outcome after it is known.
Approaches: rational model & bounded rationality
Rational model: logical and consistent choices to maximise value. (perfecte wereld)
Bounded rationality: Rational decisions but limited by ability to process information. Accept solutions are good
enough rather than try to perfect (wase resources and time). We stop at the point we don’t gain more information.
(Niet perfect is ook goed!)
Appoaches: intuition
Experience-based decisions: past experiences
Affect-initiated decisions: feelings or emotions
Cognitive-based decisions: skills, knowledge and training
Values or ethics-based decisions: ethical values or culture
Subconscious mental processing: subconscious mind (het onbewuste, jouw eigen gevoel en intuitie)
Problems – structured and unstructured
,Structured problems: Straightforward and simple, clear goal, familiar problem, information is well-defined and
complete. (klantenservice)
Unstructured problems: new and unusual, unclear goal, unfamiliar problem, information is ambiguous and
incomplete.
Decisions - programmed and non-programmed
Programmed: repetitive decision that can be handled using a routine approach. Relies on previous solutions.
Decision-making process is much shorter. (Purchasing new computers)
Non-programmed: unique and non-recurring (niet terugkerend) decision that requires a custom-made approach. At
the top level, most problems managers face are non-programmed. (New organizational strategy)
Solving structured problems, making programmed decisions
1. Procedures: series of interrelated sequential steps.
Clear problem, clear procedure
2. Rules: explicit statement that tells what can and cannot be done.
Simple to follow, ensuring consistency
3. Policies: guidelines for making decisions
Often open to personal interpretation
Decision making conditions
Certainty: a situation where a manager can make accurate decisions because the outcome of every alternative is
known.
Risk: conditions in which the decision maker is able to estimate the likelihood (waarschijnlijkheid) of certain
outcomes. Managers have historical data from past personal experiences or secondary information that lets them
assign probabilities to different alternatives.
Uncertainty: you face a decision where you’re not certain about the outcomes and can’t even make reasonable
probability estimates. The choice of alternative is influenced by the limited amount of available information and by
the psychological orientation of the decision maker.
Group decision-making
In many cases, these groups represent the people who will be most affected by the decisions being made. Because
of their expertise, these people are often best qualified to make decisions that affect them.
Advantages Disadvantages
More complete information Time-consuming
Diversity of experiences and perspectives Minority domination: members are never perfectly equal
( not the same rank, skills, knowledge, experience)
More alternatives generated: specialisations, quantity, Ambiguous responsibility: who is actually responsible for
diversity of information final outcome?
Increased acceptance of a solution, because the Pressure to conform: Groupthink: views don’t match the
members are affected by the decision and involved in the group’s consensus views and you remain silent to give
process. the appearance of agreement.
Increased legitimacy: decisions made by groups may be
perceived as more legitimate.
Effectiveness of groups: accuracy, speed, creativity, and acceptance, size of the group.
Improve group decision making: brainstorming, nominal group technique (they secretly write a list of general
problem areas or potential solutions to a problem), electronic meeting (faster and cheaper, anoniem).
Strategy and planning
Why plan?
, Coordinated efforts: it gives direction. Understand where the organization is going and what they must
contribute to reach the goals.
Reduced uncertainty: look ahead, anticipate change, consider the impact of change, and develop
appropriate responses. It also clarifies the consequences of the actions managers might take in response
to change.
Reduce overlap and wasteful activities
Establishing goals and standards
Types of plans
Breadth
Strategic: Apply to the entire organization and involve overall goals.
Tactical: Specify details of how the overall goals are to be achieved.
Time frame
Long-term: Time frame beyond three years
Short-term: Cover one year or less
Specificity
Specific: Clearly defined, no room for interpretation
Directional: Flexible, setting general guidelines
Frequency of use
Single use: One-time plan specifically designed to address a unique situation
Standing: Ongoing, providing guidance for activities that are repeated
Strategic management process
Strategic management: what managers do to
develop an organization’s strategies. Get a
sustainable competitive advantage.
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 and satisfy its
customers in order to achieve its goals.
Setting goals
1. Review mission and tasks
Mission and tasks: goals should reflect the organization’s mission.
2. Evaluate resources
Resources: goals should be challenging, but realistic given your available resources.
3. Determine goals individually or with input from others
Measurable, specific and with a timeframe.
4. Make sure goals are well-written and then communicate them to all who need to know.
5. Use feedback
Feedback mechanism: assess progress and change goals as needed.
6. Link rewards to goal achievement
Employees want to know: “What is in it for me?”
Identifying missions, goals and strategies
Vision: what do we want to be? Goals for the future.
