EBA106 管理学

Section 1-2. Intro

Intro

Managers

Top Manager

• Def. Executives responsible for the overall direction of the org’
• Responsible for creating:
  • Context of change
  • Employee buy-in
  • Positive organizational culture via language and action

Middle Manager

• Setting objectives consistent with top management’s goals 【桥梁作用】
• Planning and allocating resources to meet objectives
• Coordinating and linking divisions within a firm
• Monitoring and managing performance of subunits and managers
• Implementing strategies developed by top managers
• Responsible for facilitating team activities toward goal accomplishment

First-Line Manager

• Responsible for managing the performance of entry-level employees (who is responsible for producing a company’s goods and services)
• Responsibilities:
  • Monitoring
  • Teaching
  • Short-term planning
• Encouraging and rewarding

Team Leaders

• Help team members:
  • Plan and schedule work
  • Learn problem-solving methods
  • Work effectively with each other
• Foster internal and external relationships

Roles of Managers

• Interpersonal Roles
  • Figurehead role: Managers perform ceremonial duties 【组织活动】
  • Leader role: Managers motivate and encourage workers to accomplish organizational objectives 【对内领导】
  • Liaison [联络人] role: Managers deal with people outside their units 【对外联络】
• Informational Roles
  • Monitor role: Managers scan their environment for information, contact others for information, and receive unsolicited information 【信息收集与分析】
  • Disseminator role: Managers share collected information with their subordinates and others in the company 【对内信息传递、收集】
  • Spokesperson role: Managers share information with people outside their departments or companies 【对外信息交换】
• Decisional Roles
  • Entrepreneur role: Managers adapt themselves, their subordinates, and their units to change【计划目标,上层建筑】
  • Disturbance handler role: Managers respond to pressures and problems that demand immediate attention and action 【公关】
  • Resource allocator role: Managers decide who gets what resources and in what amounts 【资源分配】
  • Negotiator role: Managers negotiate schedules, projects, resources, goals, outcomes, and employee raises 【事务管理】

Managerial Skills

• Technical skills: 对 team leader 和底层管理者较重要
• Human skills: 与人交际，对所有管理者都重要
• Conceptual skills: 要求有整体思维，分析部分与整体的相互影响
• Motivation to manage: “管理的动力”

根据管理者等级不同，对这些技能的要求也不同。

Top 10 mistakes

1. Insensitive to others: abrasive, intimidating, bullying style
2. Cold, aloof, arrogant
3. Betrays trust
4. Overly ambitious: thinking of next job, playing politics
5. Specific performance problems with the business
6. Overmanaging: unable to delegate or build a team
7. Unable to staff effectively
8. Unable to think strategically
9. Unable to adapt to boss with different style
10. Overdependent on advocate or mentor

Development of Management

Scientific Management

• Goal: Use scientific approaches to improve the productivity
• See overview ⬇️

Bureaucratic and Administrative Management

Quantitative Approach of Management

• involve applying statistic, optimal models
• Use quantitative techniques to
  • improve productivity
  • improve quality
  • reduce costly inventories
• Operations Management tools and methods:
  • Productivity measurement and improvement
  • Linear programming
  • Work measurement techniques, etc.

Human Relations Management

• Focus on people and sees them as valuable organisational resources in their own right.
• Mary Parker Follett’s constructive conflict and coordination – Parties in a conflict should engaging in integrative conflict resolution instead of dominating the other party or compromising
• Chester Barnard – theory of cooperation in formal organisations (defined as a system of consciously coordinated activities or forces created by two or more people)
• “Hawthorne Effect”: Elton Mayo concluded that people’s behavior and attitudes are closely related, so that group factors significantly affect individual behavior.
  • money is less a factor in determining output than group standards and group attitudes.
• Org’ are managed on
  • how managers design jobs
  • how managers work with employee teams
  • how managers communicate with others

System Management & Contingency【意外事故】 Management

• System Management requires manager to think problems as a whole, including something even irrelevant.

• Contingency Management demand managers’ ability to cope with different types of problems, so there are no fixed approaches to offer.

Section 3. Environments

External Environment

Common environment factors

Global Env’

• organization’s participation in and influence from the business of other countries
• shaped by international politics and trade agreements (e.g. WTO, European Union)

Economic Env’

• Growing rate ?
• GDP ? Engel’s Coefficient ?
• How rich is the country ?
• Country’s inequality ? 【贫富差距】
• goods price ? 【物价】
• Unemployment rate ?

Demographic Env’ 【人文？】

• Birth rate ?
• Population aging ?
• Immigration ?

Different population distribution behave differently

Tech Env’

• can change the way society, organization, and individuals operate

Sociocultural Env’

• customs and values in the society which shape people’s behavior
• Traditions are passed down across generations
• influenced by economy and technology

Government & Political Env’

• the government’s regulation of business
• the relationship between business and government

Specific external environment

• Competitors【竞品】
• Customers【需求】
• Suppliers【供给】
• Industry regulation
• Advocacy/interest groups: people who try to influence business practice
• Strategic partners: work together in joint venture

How to affect managers ?

• Flexible arrangement of Jobs and Employment

• An example of POP-MART

• Labubu Phenomenon: 顺应文化潮流和情绪需求，利用市场创造现象级产品和文化（盲盒文化）

Internal Environment

Framework of Env

Organizational Culture

Def. described as the shared values, principles, traditions and ways of doing things that influence the way organization members act.

• Categories
  • Innovation and Risk Taking
  • Stability
  • Aggressiveness: competitive rather than cooperative
  • Team Orientation
  • People Orientation: consider effects on people
  • Outcome Orientation
• Three levels of organization culture
  • Surface level: seen, observable artifacts
  • Expressed level: heard, espoused【拥护】 values
  • Assumption level: believed, unconscious belief

What is a strong culture?

• values shared widely
• convey consistent messages about what’s important (not contradictory)
• most employees can express
• strong connections between values and behaviors

Keys: Adaptability, Consistency, Clear Missions, Employee Involvement

Section 4. Ethics and Social Responsibility

Ethics

• Concepts
  • Managerial ethics: the study of morality and standards of business conduct
  • Ethical behavior follows accepted principles of right and wrong.
  • Workplace deviance is unethical behavior that violates organizational norms about right and wrong.

• The ethical answers that managers choose depend on:
  • ethical intensity of the decision
  • moral development of the manager
  • ethical principles to solve the problems

Ethical decision making: approaches

4 basic approaches

• The utilitarian approach 【效率】
  • focuses on consequences of an action using a utilitarian approach (try to make decisions that result in “greatest good”)
  • but this good may be subjective
• The moral rights approach 【规矩】
  • focuses on an examination of the moral standing of actions independent of their consequences.
  • choose the action that conforms with moral principles and provides positive consequences.
• The universal approach 【普适】
  • choosing a course of action that you believe can apply to all people under all situations
• The justice approach 【投产比】
  • focuses on the equity of process and outcomes.
  • Distributive justice, Procedural justice, Compensatory justice, etc.

Steps for ethical decision making

• Selecting and Hiring Ethical Employees: overt and personality-based integrity tests
• Codes of Ethics:
  1. communicate its code to others both inside and outside the company
  2. develop practical ethical standards and procedures specific to the company’s line of business.
• Ethics Training:
  1. To create an ethical company culture
  2. To achieve credibility with employees
  3. To teach employees a practical model of ethical decision making
• Ethical Climate establishment:
  1. Top managers act ethically
  2. Top management actively participate in the company ethics program
  3. Put in place a reporting system that encourages managers and employees to report potential ethics violations i.e. whistle-blowing

Steps to encourage valid whistle-blowing:

1. Clearly communicate whistle-blowing procedures to all employees. 【公开】
2. Allow for reporting channels in addition to the chain of command or reporting incidents to one’s boss. 【制定规则】
3. Thoroughly investigate all claims based on a consistent procedure.
4. Protect whistle-blowers who make valid claims. 【鼓励】
5. Provide moderate financial incentives or rewards for valid claims. 【鼓励】
6. Publicly celebrate employees who make valid claims.【鼓励】

Basic Model for Ethic Decision Making

1. Identify problems
2. Identify constituents
3. Diagnose the situation
4. Analyze your option
5. Make choice
6. Act

Social responsibility

• Def. Social responsibility is a business’s obligation to pursue policies, make decisions, and take actions that benefit society.
  • shareholder model/efficiency perspective — the only social responsibility that businesses have is to maximize profits
  • stakeholder model/social responsibility perspective — management’s most important responsibility is the firm’s long-term survival

通过观察企业是否损害了 shareholders 的利益，判断企业是否对“效率”（Efficiency）负责

通过观察企业是否损害了 stakeholders 的利益，判断企业是否对“社会责任”（Social Responsibility）负责

How organizations respond

• Social responsiveness refers to a company’s strategy to respond to stakeholders’ economic, legal, ethical, or discretionary expectations concerning social responsibility

1. Reactive: Company does less than society expect
2. Defensive: Company admits responsibility for a problem but does the least required to meet societal expectation
3. Accommodative: Company accepts responsibility for a problem and does all that society expects to solve the problem
4. Proactive: Company anticipates a problem before it occurs and does more than society expects

Social responsibilities for organizations

• Economic responsibility: a company’s social responsibility to make a profit by producing a valued product or service
• Legal responsibility: a company’s social responsibility to obey society’s laws and regulations
• Ethical responsibility: a company’s social responsibility not to violate accepted principles of right and wrong when conducting its business
• Discretionary responsibility: the social roles that a company fulfills beyond its economic, legal and ethical responsibilities

Section 5. Planning

Basic Concepts

• Goal: a desired future condition that the organisation attempts to achieve
• Plan: a blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks and other actions

So what is planning?

• Planning：choosing a goal and developing methods or strategies to achieve the goal

Organisational Goals

Recap: Types of Managers

Then we extend to Levels of Goals and Plans

Then who sets the goals?

• Each manager’s responsibility for setting goals is determined by his/her level within the organization
• Goals are often negotiated between managers; it is important to set realistic goals and to ensure consensus(意见一致)

Rules of setting goals

• Be SMART: Specific, Measurable, Attainable, Realistic, Timely
• Be committed: to develop commitment by
  • involving employees in particular goal-setting,
  • making the goal public,
  • obtaining support from top management.
• When there are multiple goals:
  • Potential conflicts between goals
  • To address potential conflicts, managers should understand optimisation: recognising the conflicts between goals and making balance and coordination

Organisational Planning

Planning process

Planning in different levels

See another picture to better comprehend

• Management by Objectives (MBO) was first outlined by Peter Drucker in 1954
• “Management by Objectives works if you know the objectives, 90% of the time you don’t.”
• Model of MBO Process:

• MBO benefits:
  • focuses efforts on activities that lead to goal attainment
  • improve performance at all company levels
  • improve employee motivation
  • align individual/department goals with company goals

Planning for a turbulent/uncertain environment

Contingency planning

• Rapid and uncertain environmental changes: technological, social, economic etc.
• Contingency planning respond to emergencies
• How to develop?
  • identify important env factors
  • forecast alternatives responses to likely cases(especially worst)

Crisis Management

涉及到一些规模较大，较紧急的事件，多数为外部环境因素。如 COVID-19，经济危机等

• Prevention & Preparation:
  • detect signal from env
  • designate crisis management team and spokesperson
• set up information systems
• need future-ready researches

Innovative planning strategies

Decentralized planning

• Example: Top managers or planning experts work with managers in major devisions/departments to develop their own goals and plans【扁平化管理】

Stretch goals

• Goals that are reasonable but highly ambitious and compelling【超高目标？激发潜能？】

Section 6. Decision Making

Basic Concepts

• Decision: a choice made from available alternatives
• Types of decision-making
  • Programmed decisions: made for situation that has occurred often enough(predictable)
  • Non-programmed decisions: made for unique situation(unpredictable) which affect consequence importantly

Programmed vs. Non-programmed Decisions

Characteristic	Programmed	Non-programmed
Problem Type	Structured	Unstructured
Managerial Level	Lower levels	Upper levels
Information Availability	Readily available	Ambiguous/Incomplete
Solution Basis	Rules/Policies	Judgment/Creativity

Decision-Making Models

1. Classical Model

• Assumptions:
  • Clear goals, complete information, rational choice.
  • Maximizes economic returns.
• Type: Normative/Prescriptive.

2. Administrative Model

• Assumptions:
  • Bounded rationality, satisficing.
  • Vague goals, limited information.
• Type: Descriptive.

3. Political Model

• Assumptions:
  • Conflicts among coalitions.
  • Bargaining under uncertainty.
• Focus: Group dynamics and negotiation.

Comparison

Decision-Making Steps

6 steps as a circle

1. Recognize Requirement (Problem/Opportunity).
2. Diagnose Causes (Analyze underlying factors).
3. Develop Alternatives (Programmed vs. Non-programmed).
4. Select Alternative (Align with goals, risk propensity).
5. Implement (Managerial persuasion).
6. Evaluate & Feedback (Monitor outcomes).

Individual and group decision-making

Individual	Group
Faster	Slower (time-consuming)
Limited perspectives	Diverse ideas/knowledge
Risk of bias	Reduced bias (if managed well)
Accountability clear	Potential for groupthink

Group Techniques:

• Brainstorming (no criticism).
• Nominal Group Technique (ranking ideas).
• Delphi Technique (expert consensus).

Section 7. Organizational Strategy

• Strategy is the plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization’s goals.
  • Resource: Plan for resource allocation to achieve competitive advantage.
  • Competitive Advantage: Unique edge in meeting market needs (e.g., BYD’s battery tech).
  • Sustainable Competitive Advantage: Advantage that competitors cannot replicate.
    • Valuable, Rare, Imperfectly imitable or Non-substitutable resources.

To think of Effective strategy:

• What business we are in ?
• How should we compete in this industry ?
• Who are your competitors, and how should we respond to them ?

Types of Organizational Strategies

1. Corporate Strategies

Type	Focus
Growth	Expansion via new markets/products (e.g., BYD’s vertical integration).
Stability	Maintain current operations.
Renewal	Address declining performance (retrenchment/turnaround strategies).

Growth Subtypes:

• Concentration: Focus on core business.
• Vertical Integration: Control supply chain (e.g., BYD’s battery production).
• Diversification:
  • Related: New products in related markets.
  • Unrelated: New products in unrelated markets (higher risk).

2. Competitive Strategies (Porter’s)

Strategy	Key Features
Cost Leadership	Tight cost control, efficiency (e.g., BYD’s mass EV production).
Differentiation	Unique product/service (e.g., Tesla’s tech innovation).
Focus	Target niche markets (e.g., luxury EVs).

Strategic Tools

The BCG Matrix

• Stars: large share of a fast-growing market
• Question marks: have a small share of a fast-growing market
• Cash cows: have a large share of a slow-growing market
• Dogs: have a small share of a declining market

Porter’s Competitive Strategies (Five Forces)

Strategies

Strategy	Characteristic
Differentiation	Acts in a flexible, loosely knit way, with strong coordination among departments Strong capability in basic research Creative flair, thinks “out of the box” Strong marketing abilities Rewards employee innovation Corporate reputation for quality or technological leadership
Cost Leadership	Strong central authority; tight cost controls Maintains standard operating procedures Easy-to-use manufacturing technologies Highly efficient procurement and distribution systems Close supervision; finite employee empowerment Frequent, detailed control reports
Focus	May use combination of above policies directed at particular strategic target Values and rewards flexibility and customer intimacy Measures cost of providing service and maintaining customer loyalty Pushes empowerment to employees with customer control

Steps for strategy making

1. Assess Need for Change
   • Overcome competitive inertia (resistance to change).
2. Situational Analysis (SWOT)
   • Strengths: R&D capability, flexible production (BYD).
   • Weaknesses: Limited high-end market presence.
   • Opportunities: Government EV policies, global expansion.
   • Threats: Intense competition (Tesla, Xiaomi).
3. Choose Strategic Alternatives
   • Use strategic reference points (risk-averse vs. risk-taking decisions).

Case Study: BYD

• Strengths: Battery tech, vertical integration, R&D investment.
• Weaknesses: Brand perception in premium markets.
• Opportunities: Global EV demand, diversification (e.g., masks).
• Threats: Price wars, trade barriers.

Section 8. Strategic Management

Strategic Management

Adaptation to the Changing Environment

• Global mindset
• Innovation
• Use of IT

Adaptive Strategies

• Defenders
• Prospectors
• Analysers
• Reactors

Case Study: BYD vs. Tesla in Electronic Vehicle(EV) Production

BYD	Tesla
Founded in 1995	Established in 2001
In Shenzhen Stock in 2011	In ??? in 2010
“High-tech”	“Better for Transition”

• What are their growth and competitive strategies ?
• Similarities and Differences ?
• How they adapt ?

BYD	Tesla
higher vertical production(car, batteries, components)	depend on Chinese batteries, but investigate in China partially solve
lower the cost of material(batteries) obtain
Most sold in China	Actively expand international market
Focus on Users experience

New Trends in Strategic Management

Business Ecosystem

What’s that ?

• Case:
  • Apple: iOS ecosystem, with multiple products
  • Xiaomi: MIUI
• static model of business ecosystem

### Ecosystem Strategy

At first, think of whether we build an ecosystem or join one?

And it depends on the nature of business and specific position it occupies in the competitive landscape

1. Focal【中心的】 firm’s ecosystem strategy: think of value propositions, layout of value creation
2. Design governance structure of the ecosystem: defines the roles of the focal firm and the participants and govern their interactions
3. (ultimate task) create ecosystem-specific competitive advantages based on ecosystem specific competencies

Section 9. Lab class

From idea to business

Consideration

• Target Market
• Problem Type
  • Efficiency
  • Decision Support
  • Customer Engagement
• Core Offering
• Pricing Model
  • Freemium vs. Paid Tiers
  • Usage-Based vs. Subcription
• Delivery Channels
• Value-Add Features

MyBusiness: Games Sandbox Business

• TM
  • creative users
  • start-up business
• PT
  • Entertainment requirement
  • Idea exchanging
• CO
  • Game Development Space
  • Easy shared platform for players
• PM
  • Free
  • Price for special API / Functions (maybe)
• DC
  • VR App

Section 10. Innovation

Key Concepts of Innovation

1. Innovation: Implementation of creative ideas into practical solutions (e.g., Tesla’s electric vehicles).
2. Creativity: Generation of unique ideas (e.g., brainstorming sessions at Apple).
3. Invention: Conversion of ideas into tangible products/processes (e.g., Edison’s light bulb).
4. Schumpeter’s Theory:
   • Creative Destruction: New innovations replace old systems (e.g., Netflix replacing Blockbuster).
   • Types of Innovation: New products, markets, processes, supply sources, or organizational structures.

Types of Organizational Innovation

Type	Example
Product Innovation	BYD’s blade battery for EVs.
Process Innovation	Toyota’s lean manufacturing.
Organizational Innovation	Google’s 20% time policy for side projects.
Management Innovation	Agile methodologies in software development.
Service Innovation	Alibaba’s AI-powered customer service.

Innovation Management

1. Creative Work Environment

• Components:
  • Organizational Encouragement (e.g., Google’s “moonshot” projects).
  • Freedom (autonomy in task execution).
  • Resources (time, funding).

2. Approaches to Innovation

Experiential Approach	Compression Approach
- For disruptive change (uncertainty). - Focus: Prototyping, testing, iteration. - Example: SpaceX’s reusable rockets.	- For incremental change (predictability). - Focus: Speed via overlapping steps. - Example: Toyota’s Kaizen.

Innovation Streams

• Technology Cycle: From birth to replacement (e.g., smartphones replacing feature phones).
• Stages:
  1. Technological Discontinuity (breakthrough innovation).
  2. Era of Ferment (competing designs, e.g., VHS vs. Betamax).
  3. Dominant Design (market standard, e.g., USB-C).
  4. Incremental Change (refinements, e.g., iPhone camera upgrades).

Organizational Change

Reasons for Change

• External: Market shifts, regulations (e.g., GDPR).
• Internal: Declining performance, cultural shifts.

Lewin’s 3-Step Model

1. Unfreezing: Recognize need for change (e.g., Kodak acknowledging digital disruption).
2. Changing: Implement interventions (e.g., adopting cloud infrastructure).
3. Refreezing: Reinforce new norms (e.g., training programs).

Resistance to Change

Cause	Mitigation Strategy
Fear of uncertainty	Education & communication.
Loss of control	Participation in decision-making.
Habitual routines	Incentivize new behaviors.

Organizational Decline Stages

1. Blinded: Ignore warning signs (e.g., Blockbuster dismissing streaming).
2. Inaction: Recognize issues but delay action.
3. Faulty Action: Panic-driven decisions (e.g., layoffs without strategy).
4. Crisis: Severe financial/operational collapse.
5. Dissolution: Bankruptcy or acquisition.

Area of Change

• Strategy
• Structure
• Technology
• People

OD (Organizational Development) Techniques

• Survey Feedback: Collect employee insights to drive change.
• Team Building: Enhance collaboration (e.g., cross-department workshops).
• Intergroup Development: Resolve conflicts between teams.

Managing Changes

Stages of changes

• Unfreezing: 知晓变化的必要性
• Change intervention: 行动
• Refreezing: 尽量确保新的改变能持久

Forces and Resistances to change

• Type of forces
  • Change forces
  • Resistance forces
• Reason for Resistance to Change
  • Uncertainty
  • Habit
  • Possible loss
  • Belief
• Techniques to reduce
  • Education & Communication
  • Participation: 让有能力不做的人参与进来
  • Negotiation: 拒绝者来自较强势的群组时
  • etc.

Section 11. Global Management

Global Trade Environment

Trade barriers

• Tariffs: Taxes on imported goods (e.g., U.S. tariffs on Chinese steel).

• Non-Tariff Barriers:

  • Quotas: Import limits (e.g., EU quotas on textile imports).
  • Subsidies: Government support for domestic industries (e.g., EU agricultural subsidies).
  • Customs Classification: Varying import rules to restrict trade.

• General Agreement of Tariff and Trade(GATT) -> WTO

Trade barriers & free-trade agreements

• increase choices, competition, and purchasing power
• create new business opportunities and intensify competition

Globalization

Globalization

• Definition: Integration of markets globally (e.g., Apple sourcing components from 43 countries).
• Impacts:
  • Pros: Increased market access, lower consumer prices.
  • Cons: Economic interdependence (e.g., 2008 financial crisis spreading globally).

Global Consistency vs. Local Adaptation

Global Consistency	Local Adaptation
Uniform rules across countries (e.g., Starbucks’ global brand image).	Tailored strategies for local markets (e.g., McDonald’s offering rice burgers in Asia).

Forms of globalization

• Exporting
• Cooperative contract: Foreign business owner pays a company fee for rights to conduct that business in his/her country
  • Licensing
  • Franchise
• Strategic alliances: Companies combine key resources, costs, risks, technology, and people
  • e.g. most common: Joint venture(合资公司)
• Wholly owned affiliates【境外子公司】
• Global new ventures【境外创业公司】

Global Management Issues

1. Choose Office Locations

• Qualitative Factors:
  • Workforce quality
  • Company strategy
• Quantitative Factors:
  • Kind of facility being built
  • Tariff and non-tariff barriers
  • Exchange rates
  • Transportation and labor costs.

2. Minimize Political Risks

• Avoidance
  • Divesting from high-risk regions (e.g., exiting markets during political instability).
  • Postpone investment til risk shrinks.
• Control
  • (请外国政府修改政策)
• Cooperation: Joint ventures to share risks (e.g., Toyota-GM partnership in the U.S.).

3. Cultural Differences

• Adapt companies to cultural differences
• Ensure adaptation not based on outdated assumptions.

Case Studies in Globalization

1. DJI (Dà-Jiāng Innovations)

• Global Strategy:
  • Dominated consumer drones via R&D focus (e.g., Phantom series).
  • Localized sales teams in the U.S., Europe, and Asia.
• Challenges:
  • U.S. trade restrictions due to security concerns.
  • Competition from Skydio and Autel.

2. SHEIN

• Global Expansion Tactics:
  • Real-Time Data Analytics: Track trends via social media (e.g., TikTok influencers).
  • Fast Fashion Supply Chain: 1-2 weeks from design to delivery vs. Zara’s 3-4 weeks.
• Risks:
  • Sustainability criticisms (e.g., environmental impact of fast fashion).
  • Regulatory scrutiny in the EU and U.S.

Section 13. Organisation Structure and Design

Outline

• Organisational structure
• Organisational design
• Factors affecting structural choice

Organizational Structure

Departmentalization

• Definition: Subdividing work into separate organizational units.

• Types:

  • Functional: Based on business functions (e.g., Sales, Finance).

    • Pros: Efficiency, internal coordination, specialization.
    • Cons: Poor cross-department communication, limited goal alignment.
    

  • Product: Organized by specific products/services (e.g., BYD Electronics).

    • Pros: Product expertise (利好专业管理者), closer to customers (需求向).
    • Cons: Duplication of functions, fragmented goals.

  • Geographic: Divided by regions (e.g., Huawei’s global operations).

    • Pros: effective handling local issues, better serve needs of unique geographic markets
    • Cons: Redundancy, isolation from other units.

  • Customer: Focused on customer segments (e.g., Retail, Wholesale).

    • Pros: solutions for unique needs.
    • Cons: Functional duplication.

  • Matrix: Hybrid structure (e.g., Procter & Gamble).

    • Pros: Resource pooling, efficient complex task management.
    • Cons: High coordination complexity.
  

Organizational Authority

Def. 为达成组织目标的可行使权力

• Types of Authority:

  • Line Authority: Direct command over subordinates (e.g., production managers).
  • Staff Authority: Advisory role for non-subordinates (e.g., HR consultants).

• Span of Control:

  • Definition: Number of employees a manager can effectively

    
    • **Narrow Span **: More layers, suited for complex tasks.
    • Wide Span : Fewer layers, suited for standardized tasks.

• Delegation of authority

  • Centralization vs. Decentralization:
    • Centralization: Stable environments, minor decisions, crisis scenarios.
    • Decentralization: Complex environments, significant decisions, dispersed operations.

Organizational Design

Job Design

• Definition: Structuring tasks within roles for efficiency and engagement.
• Methods:
  • Job Rotation: Shifting employees across roles periodically.
  • Job Enlargement: Expanding task variety within a role.
  • Job Enrichment: Adding decision-making authority to tasks.

Organizational Design Process

Organizational Process: Collection of activities that transform inputs into outputs that are valued by customers

• 6 key elements: job/work specialisation, departmentalisation, chain of command, span of control, centralisation/decentralisation, formalisation [工作是否遵循一定规章制度/标准]

• Mechanistic vs. Organic Structures:

Intraorganizational Processes

• 通过内部活动完成输入到输出

• Reengineering: Redesigning workflows by altering task interdependence.

  • Types of Interdependence(工作流程):
    1. Pooled: Independent contributions.
    2. Sequential: Linear workflow dependencies.
    3. Reciprocal: Collaborative back-and-forth processes.

• Empowerment: Delegating decision-making authority to employees. [下放权力]

Interorganizational Processes

• 通过企业之间的活动完成输入到输出

• Modular Organizations: Outsourcing non-core activities (e.g., design, logistics).

  • Pros: Cost efficiency; Cons: Loss of control.

• Virtual Organizations: Network-based collaboration (e.g., shared resources).

  • Pros: Flexibility, speed; workers combine efforts; allow cost sharing
  • Cons: Quality control challenges.

Factors Affecting Structural Choice

什么因素会影响“机械化/有机组织结构”的选择？

• Strategy
  • Innovation: Requires organic structures (flexibility, open communication).
  • Cost Control: Suits mechanistic structures (standardization, stability).
• Size
  • Large Organizations (>2,000 employees): Tend toward mechanistic structures (formalization, centralization).
• Technology
  • Routine Technology: Aligns with mechanistic structures.
  • Non-Routine Technology: Favors organic structures.
• Environmental Uncertainty
  • Stable Environments: Mechanistic structures perform better.
  • Uncertain Environments: Require organic flexibility.

Section 14. Managing work teams

Outline

• Work teams: basic concepts
• Pros and cons of using teams
• Different types of teams
• Characteristics of teams
• Methods used to enhance work team effectiveness

Basic Concepts of Work Teams

Definition of Work Teams

• Work Teams: Small groups with complementary skills who are mutually accountable for:
  • Pursuing a common purpose
  • Achieving performance goals
  • Improving interdependent work processes

Groups vs. Teams

Aspect	Group	Team
Leadership	Designated leader	Shared/rotated leadership
Accountability	Individual [对一人负责？]	Individual + Mutual [相互负责？]
Purpose	Aligns with organizational goals	Specific team vision
Work Products	Individual outputs	Collective outputs
Effectiveness Measurement	by influence on business	by assessing collective work
Decision-Making	Delegates tasks to individuals	Collaborative problem-solving

Pros and Cons of Using Teams

Advantages

• Improved Performance: Faster product development, higher quality, and efficiency.
• Enhanced Job Satisfaction: Skill development through cross-training.
• Share the benefits of group decision making (see Sec.6)

Disadvantages

• Social Loafing: Members withhold effort.
• Conflict: Cognitive (task-related) vs. Affective (emotional).
• Groupthink [从众效应]
• Minority domination [被个人主导讨论方向]

When to Use Teams

• ✅ Clear purpose requiring collaboration.
• ✅ Resources and rewards for teamwork.
• ❌ Tasks can be done independently.
• ❌ Lack of alignment or resources.

Types of Teams

Based on Autonomy

Type	Workers/Employees	Managers
1️⃣ Traditional Groups	Execution No direct control	receive reports from workers responsible for workers’ performance authority to hire and fire them
2️⃣Employee involvement teams	Provide advice or make suggestions do not have the authority to make decisions Membership: voluntary but expertise	make decisions (Basic Logic: people closest to the problem or situation are best able to recommend solutions.)
3️⃣Semi-autonomous Groups	have the (limited) authority to make decisions solve problems related to the major tasks typically cross-trained in diversified skills and tasks	still play a role but less dominant
4️⃣Self-Managing Teams	manage and control crucial tasks(high authority)	-
5️⃣Self-Designing Teams	Share characteristics of self-managing teams control team design, work tasks, and team membership(full auth)	(all decided by members)

Specialized Teams

• Cross-Functional: Members from different departments (e.g., marketing + engineering).
• Project teams: [一次性项目]
• Virtual: Geographically dispersed members using digital tools.
• Global: Culturally diverse teams requiring sensitivity to norms and communication styles.
  • Managing global teams (see Sec.10)

Team Characteristics

Key Factors

• Norms: Informal rules guiding behavior (e.g., punctuality, honesty).

• Cohesiveness: Attraction to the team, which enhanced by:

  • Present of members in team activities
  • opportunities for task interdependence
  • Engaging in non-work activities

• Size: Optimal size = 6–9 members (balances diversity and coordination).

  • too large: social loaf; minority domination
  • too small: lack diversity of skills; no benefit from team decision making

• Conflict: Manage cognitive conflict (task-focused) and minimize affective conflict.

Stages of Team Development

1. Forming: Members get acquainted.
2. Storming: Conflict over goals/methods.
3. Norming: Roles and norms solidify.
4. Performing: Peak efficiency.
5. Adjourning: Wrap-up for temporary teams.

Enhancing Team Effectiveness

Setting goals & priorities

• SMART Goals: Specific, measurable, and challenging.
• Stretch Goals: Ambitious, seems unreachable.
  • Effective for teams that: 1️⃣ have high autonomy to achieve goals; 2️⃣ empowered with control of resources; 3️⃣ have structural accommodation and bureaucratic immunity
    • Structural accommodation: authorize teams to change org structures/policies/practices
    • Bureaucratic immunity: ability to make changes without getting approval from managers/…

Selecting members

• Individualism-collectivism [集体主义 vs 个人主义]

• Diversity: Balance skills, personalities, and cultural backgrounds.

• Team Player Inventory: Assess preference for teamwork vs. individual work (need higher)

Training & Rewards

• Training Areas(Interpersonal): Conflict resolution, decision-making, technical skills.
• Compensation: Skill-based pay, gainsharing [员工带来的收益需要益及员工], non-financial recognition.

Section 15. Human Resource Management

HRM Overview

Definition: Process of attracting, developing, and retaining a qualified workforce. [“找合适的牛马”]

Key Functions:

1. Recruitment & Selection: 公司需要能吸引求职者的技巧
2. Training & Performance Appraisal: 需要培养应聘者的专业技术
3. Compensation & Employee Separation: 筛选——留下的给予报酬，离开的做好“手续”？

Strategic Alignment: HRM integrates company strategy with workforce management.

External factors

• Economy
• Laws and regulations
• Labour unions [工会？]
• Demography [人口状况]

Recruitment & Selection

Recruitment Methods

	Internal Recruitment	External Recruitment
Def	Promotion from within	a pool of qualified job applicants from outside the company
Methods	Job posting & Career path(planned sequence of jobs)	Career Portals(advertise/job site), employee referrals, Special events, Social media

Case Study: Huawei’s Dual-Career Path

Selection Process

1. Application Review: Résumés and forms.
2. Background Checks: Verify credentials.
3. Interviews:
   • Structured: Standardized questions (e.g., behavioral interviews).
   • Unstructured: Flexible questioning.
4. Tests:
   • Specific ability or aptitude tests: ability needed for the job
   • Cognitive ability tests: employee’s perceptual speed, verbal comprehension
   • Biographical data: personal backgrounds and life experiences
   • Personality assessments: job-related personality dimensions
   • Work simulations

Training & Performance Appraisal

Training Methods

Objective	Methods
Knowledge/Info Transfer	Lectures, e-learning modules
Skill Development	Case studies, group discussions
Behavioral Change	On-the-job training, role-playing, simulations

• ⚠️: All these can be developed by e-learning (computer-based).

Huawei Example:

• Training aligned with business needs.
• Internal experts as trainers.

Performance Appraisal

Common Errors:

• Central Tendency: Rating all employees as in middlee scales.
• Halo error: “All employees perform the same in all parts”
• Leniency Bias: “All perform well”

Improvement Strategies:

• Use Behavioral Observation Scales (BOS) for specific criteria.
• Train evaluators to avoid biases.

Huawei’s System:

• Biannual evaluations (Grades A+ to D).
• Grades impact salary, bonuses, and stock options.

Compensation & Separation

Types of Compensation Decisions

• Pay-level: whether to pay a worker in a level that is below, above or at current market wages.
• Pay-variability: extent to which employee’s pay varies with individual and organization performances.

Option	Description
Piecework	Employees are paid a set rate for each item they produce
Commissions	Employees earn a percentage of each sale they make
Profit sharing	Company pays a percentage of its profits to employees in addition to regular compensation
Employee stock ownership plans (ESOPs)	Employees are awarded shares of company stock in addition to regular compensation
Stock options	Employees have the right to purchase shares of stock at a set price

• Pay-structure: extent to which people in the company receive very different levels of pay

Pay Structure	Description
Hierarchical	Large pay gaps between levels.
Compressed	Smaller pay differences.

Huawei Case:

• Salary + performance bonus + stock dividends.
• Promotions based on biannual evaluations.

Employee Separation

Best Practices for Layoffs:

• Provide clear explanations.
• Offer outplacement services (e.g., counseling).
• Concern of non-seaprated employees (e.g. why they are not terminated)

Retirement Plans:

• Early Retirement Incentives (ERIPs).
• Phased Retirement: Gradual reduction in work hours.

Employee turnover

• Functional turnover: Loss of poor-performing employees
• Dysfunctional turnover: Loss of high-performing employees

Section 16. Managing Diversity

The Importance of Diversity for Organizations

Definition of Workplace Diversity

• Variety of demographic, cultural, and personal differences among employees and customers.
• Value: Differences enhance innovation and drive business success.

Diversity vs. Affirmative Action

Diversity	Affirmative Action
Broad focus (demographic, cultural, personal)	Targets minorities/women
Exists naturally	Requires purposeful steps
Goal: Inclusive environment	Goal: Legal compliance

Business Benefits

• Cost Savings: Reduces turnover and lawsuits.
• Talent Attraction: Appeals to a broader talent pool.
• Problem-Solving: Diverse teams yield higher-quality solutions.
• Market Growth: Better understanding of diverse customer bases.

Types of Diversity

• Surface-level [直接发现]
• Deep-level [需要进一步了解才能发现]
• Hidden-level [暂未发现]

Challenges Brought by Diversity

Personal Bias

Surface-Level Diversity Challenges

Discrimination Type	Example	Mitigation Strategies
Age	Overlooking older employees for training	Monitor training access, foster intergenerational collaboration.
Gender	“Glass ceiling” limiting women’s advancement	Mentorship programs, inclusive social activities.
Race/Ethnicity	Hiring disparities	Standardize selection criteria, conduct audits.
Disabilities	Lack of accommodations	Provide assistive tech, actively recruit.

Case Study: “Bamboo Ceiling”

• Issue: Asian-Americans face career barriers due to stereotypes.
• Solution: Challenge stereotypes, promote inclusive leadership.

Impacts on Individual Behavior and Workplace Interactions

Deep-Level Diversity

• Big Five Personality Dimensions:
  1. Extraversion: Sociability vs. introversion. (外向/内向表达方式)
  2. Emotional Stability: Resilience vs. anxiety. (情绪稳定性)
  3. Agreeableness: Cooperativeness. (“靠谱”)
  4. Conscientiousness: Organization and reliability. (努力，效率)
  5. Openness to Experience: Creativity and adaptability. (创造性)

Shifting from Surface to Deep-Level Diversity

• Process: Move beyond stereotypes to understand individual behaviors.
• Outcome: Reduces conflict, improves teamwork.

Managing Diversity

Diversity Paradigms

Paradigm	Focus	Pros/Cons
Discrimination & Fairness	Compliance with laws	Ensures fairness but limits diversity to surface traits.
Access & Legitimacy	Aligns workforce with stakeholders	Boosts representation but may tokenize.
Learning & Effectiveness	Integrates deep-level differences	Fosters innovation, minimizes conflict.

Strategies for Organizational Plurality

Def. Organisational plurality is a work environment where

• members are empowered to contribute, maximising for both sides
• individuality of each member form equity (like no bias)

Principles:

• Follow and enforce laws
• Treating groups differently but not special
• Find common grounds
• Tailoring opportunities to individuals, not groups
• High standards & realistic goals
• Solicit feedback (both sides)

Methodology:

1. Training Programs:
   • Skills-Based: Conflict resolution, negotiation.
   • Awareness Training: Challenges stereotypes.
2. Diversity Audits: Assess policies and promote fairness.
3. Diversity Pairing: Cross-cultural mentorship.

Key Principles

• Tailor opportunities to individuals, not groups.
• Maintain high standards while respecting differences.
• Set realistic goals for inclusivity.

Section 17. Managing Communication

Perception in Communication

Definition

• Process of attending to, organising, interpreting, and retaining environmental information.
• Influenced by perceptual filters (personality/experience-based biases).

Perception Process Diagram

Perception Problems

Problem	Description
Selective Perception	Noticing information consistent with one’s beliefs; ignoring inconsistencies
Closure	Filling information gaps assuming new data aligns with existing knowledge

Attribution Theory

Concept	Description
Internal Attribution	Attributing behavior to personal control/voluntary [个人原因]
External Attribution	Attributing behavior to situational factors/involuntary [环境，外部原因]

Possible mistakes in attribution

Concept	Description
Defensive Bias	perceive as having similar troubles as others (external attribution)
Fundamental Attribution Error	ignoring external factors
Self-Serving Bias	Attributing personal success to oneself; blaming failures on external factors [双标]

Communication Process

Key Components

1. Sender: Initiates message
2. Encoding: Translating ideas into symbols/language
3. Message: Content transmitted
4. Medium: Channel used (e.g., email, face-to-face)
5. Receiver: Interprets the message
6. Decoding: Attaching meaning to the message
7. Feedback: Receiver’s response to the sender (3 types)
8. Noise: Interference in transmission (e.g., jargon, unclear encoding)
9. Context: Environment affecting communication

Basic Communication Model Diagram

Types of Feedback

Type	Description
Informational	Non-evaluative information from receiver
Corrective	Challenges the original message
Reinforcing	Confirms clear receipt and understanding

Organizational Communication Channels

Formal Channels

Direction	Description
Downward	Higher → Lower levels (e.g., policies)
Upward	Lower → Higher levels (e.g., feedback)
Horizontal	Same-level communication (e.g., coordination)

Informal Channels

• Grapevine: Employee-driven, rapid information flow. [小道消息]

  • Advantages: Timely, reduces misunderstandings.
  • Disadvantages: Risk of misinformation.

• Types

  • Gossip chain – [中心发散]
  • Cluster chain – [树状发散]

Other Types

Type	Description
Coaching (one-to-one)	Improving job performance (often reactive; delayed)
Counselling (one-to-one)	Addressing non-job issues affecting performance
Nonverbal Communication	Body language (kinesics), tone (paralanguage) supporting/contradicting verbal messages

Managing Effective Communication

One-on-One Communication

1. Choose the Right Medium:

   • Oral: Immediate feedback, assesses nonverbal cues.
   • Written: Best for straightforward messages.

2. Active Listening:

   • Techniques: Immediacy behaviors (eye contact), paraphrasing, summarizing.
   • Empathetic Listening: Understand speaker’s perspective; reflect feelings (e.g., “You seem frustrated…”).

3. Feedback:

   Type	Description
   Destructive	Disapproving; triggers defensiveness
   Constructive	Helpful, specific, problem-oriented

Organizational Communication Networks

Network	Speed	Accuracy	Leader Emergence	Member Satisfaction
Chain	Moderate	High	Moderate	Moderate
Wheel	Fast	High	High	Low
All Channel	Fast	Moderate	None	High

Improving Organizational Communication

Goal	Methods
Transmission	Email, discussion forums, broadcast voice mail, videotaped meetings
Reception	Company hotlines, surveys, informal meetings, blogs (to counter organizational silence)

• Some challenges brought by new techs [针对 transmission]
  • Legal and security issues
  • Lack of personal interaction

Section 18. Managing Motivation

Motivation Fundamentals

Definition

• Set of forces that initiates, directs, and sustains effort toward goal achievement.
• 3 Elements:
  1. Initiation of effort
  2. Direction of effort
  3. Persistence of effort

Motivation-Performance Relationship

Factor	Description
Job Performance	Determined by motivation, employee ability, and situational constraints
Effort → Performance	Effort (initiation/direction/persistence) directly impacts performance

Motivation Model Diagram

Needs and Rewards

Maslow’s Hierarchy of Needs

Reward Types

Type	Description	Example
Extrinsic	Tangible rewards contingent on performance	Salary, bonuses, promotions
Intrinsic	Natural rewards from task performance	Sense of achievement, growth

Steps to Motivate

1. Enquire about employees’ needs
2. Satisfy lower-order needs first (safety/physiological)
3. Expect needs to evolve over time
4. Create opportunities for higher-order needs (intrinsic rewards)

Motivation Theories

1. Equity Theory

• Motivation arises when people perceive fair treatment in:
  • Inputs (contributions) vs. Outcomes (rewards)
  • Compared to referents (others)

Forms of Inequity

Type	Description	Employee Reaction
Underreward	Worse O/I ratio than referent	↓ Inputs, ↑ Outcomes, rationalize, leave
Overreward	Better O/I ratio than referent	Guilt-driven productivity increase

Motivating Strategies

• Ensure distributive justice (fair reward distribution)
• Ensure procedural justice (fair decision-making processes)
• Reduce employees’ inputs when appropriate

2. Expectancy Theory

• Motivation depends on belief in:
  • Expectancy: Effort → Performance linkage
  • Instrumentality: Performance → Reward linkage
  • Valence: Reward attractiveness

Motivating Strategies

• Identify employees’ desired rewards
• Link rewards clearly to performance [目的：提高期望]
• Empower employees to make decision

3. Reinforcement Theory

• Behavior frequency changes based on consequences:
  • ↑ with positive consequences
  • ↓ with negative consequences

Reinforcement Contingencies [强化相倚]

Type	Effect on Behavior	Example
Positive Reinforcement	Strengthens	发奖学金
Negative Reinforcement	Strengthens	将功赎罪
Punishment [oppose to NR]	Weakens	旷课一日留堂一周
Extinction [oppose to PR]	Weakens	品行问题取消奖学金

Reinforcement Schedules

Schedule	Description	Example
Continuous	Reward after every behavior	Commission per sale
Intermittent	Reward at intervals/after behavior averages	Quarterly bonuses

Intermittent Subtypes

Motivating Strategies

• Steps: Identify, measure, analyse, intervene, and evaluate

4. Goal-Setting Theory (Recap Sec 5. Organizational Goals)

• Motivation requires:
  • Specific, challenging goals
  • Feedback on progress

Motivating Strategies

• Ensure goal acceptance
• Provide frequent, specific feedback

Managerial Actions Summary

Theory	Key Actions
Basics	Address evolving needs; prioritize intrinsic rewards for higher-order needs
Equity Theory	Correct inequities; ensure fair procedures
Expectancy Theory	Clarify effort→performance→reward links; empower employees
Reinforcement	Use contingencies strategically; avoid punishing desired behaviors
Goal-Setting	Set specific/challenging goals; align with organizational objectives

Section 19. Leadership

Leaders vs. Managers

Aspect	Leaders	Managers
Focus	Vision, mission, goals	Productivity, efficiency
Risk Approach	Encourage creativity and risk-taking	Preserve status quo
Time Perspective	Long-term	Short-term
Concern	Ends (outcomes)	Means (processes)

Leadership Definition

• Leader: Influences others and holds managerial authority
• Leadership: Process of influencing a group to achieve goals
• Ideal: All managers should be leaders (leading is one of the four management functions)

Leadership Theories

1. Trait Theory

Traits: Relatively stable characteristics

Effective leaders share these traits:

• Drive, desire to lead, honesty/integrity
• Self-confidence, emotional stability
• Strong cognitive ability, business knowledge

2. Behavioral Theories

Initiating structure: Degree to which a leader structures the roles of his or her followers by:

• Setting goals
• Giving directions
• Setting deadlines
• Assigning tasks

Consideration: Extent to which a leader is friendly, approachable, and supportive and shows concern for employees

Key Research Findings

Study	Behavioral Dimensions	Conclusion
Univ. of Iowa	- Democratic - Autocratic - Laissez-faire	Democratic style most effective (mixed later results)
Ohio State	- Consideration (employee-focused) - Initiating structure (task-focused)	“High-high” leaders achieve high performance/satisfaction (situational)
Univ. of Michigan	- Employee-oriented - Production-oriented	Employee-oriented leaders linked to higher productivity/satisfaction
Managerial Grid	- Concern for people (1-9) - Concern for production (1-9)	Best performance with 9,9 style (high both dimensions)

Contingency Theories

1. Fiedler’s Contingency Model

• LPC Questionnaire measures leadership style:
  • $\gt 64$: Relationship-oriented
  • $\le 57$: Task-oriented
  • $58-63$: Flexible
• Situational Favourableness depends on:
  • Leader-member relations
  • Task structure
  • Position power

2. Hersey & Blanchard’s Situational Theory

Match leadership style to follower readiness:

Readiness Level	Description	Leadership Style
R1	Unable/unwilling to take responsibility	Telling (directive)
R2	Willing but unable	Selling (coaching)
R3	Able but unwilling	Participating (supportive)
R4	Able and willing	Delegating

3. Path-Goal Theory

Recap: Expectancy Theory

Increase satisfaction/performance by:

• Clarifying paths to goals
• Increasing rewards for goal attainment

Leadership Behaviors

Behavior	Use When…
Directive [指导型]	Unstructured tasks; inexperienced workers
Supportive [支持、友好型]	Repetitive tasks; stressful environments
Participative [成员参与型]	Complex tasks; internal-locus employees
Achievement-Oriented [激励型]	Unchallenging tasks; high-ability workers

4. Normative Decision Theory

Decision Styles

• Autocratic $\leftrightarrow$ Consultative $\leftrightarrow$ Group decision

Key Decision Rules

• For Quality:

  • Avoid autocratic style(A) if leader lacks info or problem is unstructed.
  • Avoid G-style if subordinate’s goals different from org goal
  • Avoid G-style if subordinate lacks info

• For Acceptance: Use group style(GII) when:

  • Subordinate acceptance is critical
  • Conflict is likely (about implementation)
  • Goals align with organization

Visionary Leadership

Charismatic Leadership

Type	Characteristics
Ethical Charismatics	- Develop followers - Open to pos/neg feedback - Prioritize organizational/societal interests
Unethical Charismatics	- Manipulate followers - Self-serving - Prioritize own interests

Transformational vs. Transactional

Aspect	Transformational Leadership	Transactional Leadership
Focus	Inspire beyond self-interests	Exchange process (rewards/punishments)
Components	1. Idealized influence 2. Inspirational motivation 3. Intellectual stimulation 4. Individualized consideration	Discipline/threats to meet standards
Impact	Creates long-term commitment	Short-term compliance

Section 20. Organisational Control

Basic Control Process

• Definition: Regulatory process of establishing standards, comparing performance, and taking corrective action

• Recap: 4 functions of management

• Steps:

  1. Build Standard(Benchmark)

     • Determined by whether it can achieve goal and listen to customer’s feedback

  2. Measuring Performance

     • Methods comparison:

       Method	Benefits	Drawbacks
       Personal Observation	Firsthand knowledge, unfiltered, intensive	Biased, time-consuming, obtrusive
       Statistical Reports	Easy visualization, shows relationships	Limited info, ignores subjectivity
       Oral Reports	Fast, allows feedback	Filtered info, undocumented
       Written Reports	Comprehensive, formal, easy to file/retrieve	Time-consuming to prepare

  3. Comparing to Standards

     • Determine acceptable range of variation (a range of acceptance)

  4. Taking Corrective Action

     Type	Focus
     Immediate Action	Fixes symptoms immediately
     Basic Action	Corrects root causes of deviation

• Cybernetic Process:

Control Mechanisms

Type	Timing	Function	Example
Feedforward	Before input	Anticipates problems (preventive)	Equipment maintenance checks
Concurrent	During process	Corrects issues in real-time	Quality checks on assembly line
Feedback	After output	Corrects future performance using past data	Customer satisfaction surveys

Methods to Maintain Control

Method	Basis of Control	Key Characteristics
Bureaucratic	Rules, policies, hierarchy	Slow response, resistance to change
Objective	Measurable outputs/behaviors	Subtypes: Behavior vs. Output control
Normative	Shared values/beliefs	Hiring for cultural fit, storytelling
Concertive	Work group values	Autonomy-driven, peer pressure
Self-Control	Self-set goals & monitoring	Personal accountability

Key Distinctions:

• Objective Control:
  • Behavior control: Regulates actions (e.g., call center scripts)
  • Output control: Regulates results (e.g., sales targets)
• Concertive vs. Normative:
  • Concertive emerges from teams
  • Normative from organizational culture.

Managerial Control Aspects

1. Balanced Scorecard

Measures performance across 4 perspectives:

1. Financial (e.g., ROI, EVA)
2. Customer (e.g., retention, satisfaction)
3. Internal Operations (e.g., quality, efficiency)
4. Innovation/Learning (e.g., employee skills, R&D)

Benefit: Prevents suboptimization (improving one area at another’s expense).

2. Financial Control Tools

• Key Ratios:

  Objective	Ratio	Meaning
  Liquidity	Current Ratio	Tests short-term solvency
  Leverage	Debt-to-Assets	Measures financial leverage
  Activity	Inventory Turnover	Efficiency of inventory use
  Profitability	Return on Investment	Asset profit efficiency

• Economic Value Added (EVA):

  • $\text{EVA}=\text{Revenue}-\text{Cost}-\color{blue}\text{Capital Cost}$
  • Cost contains expenses, taxes, etc.
  • Cost of capital shows degree of which a project pay for itself

3. Customer Defection/Retention Control

• Track defection rate to retain profits and gain honest feedback. [判断员工是否计划离职以最小化损失]

4. Quality Control

Quality Measure	Advantage(s)	Disadvantage(s)
Excellence	Motivational, appeals to customers	Ambiguous, hard to measure
Value	Customer-focused, measurable	Difficult to balance cost vs. quality
Conformance to Specification	Standardizes quality, efficient	Less adaptable, poor fit for services

• Total Quality Management(TQM) [灵活变通], principles:
  • Customer focus and satisfaction
  • Continuous improvement
  • Teamwork

5. Innovation & Learning

• Focus: Continuous improvement, sustainability (waste reduction → reuse → disposal).

Summary

Section 21. Managing Information, Service and Manufacturing Operations

Information Management

Moore’s Law

• Prediction that computer processing power doubles every ~2 years while costs halve
• Current challenge: Rising costs & need for improved density (e.g., TSMC’s approach)

Sustaining Competitive Advantage

Internet’s Impact on Competitive Forces

Force	Impact of Internet
Substitute Products	Enables new substitutes with innovative approaches
Customer Power	Global price transparency shifts power to customers
Supplier Power	Online procurement increases buyer power; reduces intermediaries
New Entrants	Lowers barriers (e.g., no need for physical sales force)
Industry Rivalry	Widens markets, increases competitors, pressures price competition

Information Systems Hierarchy

System Type	Users	Function
Executive (EIS)	Executives	Strategic decisions
Decision Support (DSS)	Senior Managers	Complex decision-making
Management (MIS)	Managers	Operational efficiency & control
Transaction Processing (TPS)	Workers	Basic reporting & data entry

Service Business Management

Service-Profit Chain

Service Recovery

• Key elements:
  • Empower employees to resolve issues immediately
  • Exceed expectations of fair treatment
  • Focus on restoring satisfaction for highly dissatisfied customers

Manufacturing Operations

Classification by Processing Amount

Type	Description	Example
Make-to-Order (MTO)	Production starts ONLY after customer order	Custom vehicles
Assemble-to-Order (ATO)	Pre-made modules combined into semi-custom products	Dell computers
Make-to-Stock (MTS)	Standardized products assembled BEFORE orders	Smartphones, furnitures

Classification by Flexibility

Type	Flexibility	Characteristics	Example
Job Shops	Highest	Custom/small batches; unique setups	Handicraft
Batch Production	High	Large batches in standard sizes	Food industry
Line-Flow Production	Low	Serial processes; dedicated to one product	Automobile assembly
Continuous-Flow Production	Lowest	Produces goods at a continuous rate	Pharmaceutical factories

Inventory Management

Inventory Types/Levels

1. Raw Materials
2. Component Parts
3. Work-in-Process
4. Finished Goods

Key Metrics

• Average aggregate inventory: Average overall inventory during a particular time period

• Weeks of supply: Time until stock depletion

• Inventory turnover: Annual sales / average inventory

• Stockout: When finished goods inventory = 0

Inventory Costs

Cost Type	Description
Ordering	Paperwork, data entry for new orders
Setup	Machine adjustment costs for new product runs
Holding	Storage, insurance, obsolescence
Stockout	Lost sales + customer goodwill loss

Management Techniques

Technique	Principle	Formula/Application
EOQ (Economic order quantity)	Minimizes ordering + holding costs	$EOQ=\sqrt{2DO/H}$
JIT (Just-in-time)	Near-zero inventory; parts arrive exactly when needed	Requires supplier proximity + shared IT systems
MRP (Materials requirement planning)	Production scheduling via: 1. Master schedule 2. Billing of materials 3. Inventory records	For dependent demand systems

• Explanation of EOQ:
  • $D$: material usage (e.g. gallons of paint per year)
  • $O$: ordering cost each
  • $H$: holding costs (e.g. dollars per gallons)

Demand Systems

Type	Description	Suitable Technique
Independent	Inventory levels unrelated	EOQ
Dependent	Inventory types tied to finished goods	JIT or MRP