Organization and Management

2011
Recoletos de Bacolod
Graduate School
University of Negros
Occidental-Recoletos
[ORGANIZATION AND
MANAGEMENT (PA 218)]
Notes for Class Discussion prepared by Engr. Edwin V. de Nicolas, MDM
COURSE INTRODUCTION
ORGANIZATION AND MANAGEMENT1
Man is an activist. He has created and destroyed civilizations. He has developed vast technological
complexes. He has utilized natural resources in ingenous ways and in the process hea has wreaked
havoc with the ecosystems. He has even broken the umbilical cord from mother earth; he has gone
to the moon and returned. Future generations may see him go to the planets andbeyond. We are
all amazed at (and probably failed to fully comprehend) the enormity of modern scientific and
techonogical achievements. But a second thought causes us to recognize a major factor underlying
these achievements – man’s ability to develop social organizations for accomplishing his purposes.
The development of these organizations and effective management of them is truly one of modern
man’s greatest achievements.
Organizations theory is an eclectic2 body of knowledge, reflecting the diversity of the environment
and the many internal forces involved. All types of complex systems – businesses, hospitals, schools,
public agencies, and military units – reflect the need for knowledgeable and skillful managers.
Man is a social animal with a propensity4 for organizing and managing his affairs. He does so in an
increasingly and dynamic environment. More specifically, man is a biped5 primate (Homo sapiens)
anatmically related to the great apes but distinguished especially by notable development of the
brain that provides him with the capacity for articulate speech and abstract reasoning.
Man is an organizing animal. His perceptions are organized into a meaningful whole. This is the
universal characteristics of the cognitive, or thinking, process. The term social implies that men tend
to develop cooperative and interdependent relationships.
The tendency to organize or cooperate in interdependent relationships is inherent in man’s nature.

Although conflict within families and clans is evident, the group provides a means of protection and
hence survival. Organized activity today ranges on a continuum from informal, ad hoc groups to
formal, highly structures organizations. Military activities and religious affairs were among the first
to become formally organized. Elaborate systems were developed and by and large have persisted,
with modifications, to the present. Business and government are other spheres of activity which
have developed formal organizations geared to task accomplishment. Man engages in may
1
Kast, Freemont and James E. Rosenweig, Organization and Management (2nd Edition), Preface
2
Varied - made up of parts from various sources
3
Kast, Freemont and James E. Rosenweig, Organization and Management (2nd Edition), Chapter 1
4
Tendency - a tendency to demonstrate particular behavior
5
Two-legged animal – an animal with only two legs for locomotion
6
Kast, Freemont and James E. Rosenweig, Organization and Management (2nd Edition) Chapter 1
ORGANIZATION AND MANAGEMENT (PA 218) Page 1

voluntary organizations in his leisure time – some recreational, some philanthropic, and some of a
crusading nature.
Many different definitions of organizations havebeen set forth by scholars, depending on their
background and point of view with respect to what is relevant and/or important. Certain
fundamental or essential elements are apparent in these definitions. As stated previously, behavior
is goal oriented. Therefore it should follow that organization behavior is directed toward objectives
which are more or less understood by members of the group. The organization uses knowledge and
techniques in the accomplishment ofits tasks. Organization implies structuring and integrating
activities, that is, people working or cooperating together in interdependent relationships. The
notion of interrelatedness suggests a social system. Therefore we can say that organizations are: (1)
goal-oriented, people with a purpose; (2) psychosocial systems, people working in groups; (3)
technological systems, people using knowledge and techniques; and (4) an integration of structured
activities, people working together.
Although organization implies integration and coordination of individual or sub-group activities,

some conflict is inevitable. It may be overt, often it is covert. It may be functional or dysfunctional,
depending on whether it leads to effective and/or efficient organization performance. Moreover,
short-run ineffectiveneess and/or ineffciency may lead to superior results in the long run.
Management’s task is the integration of diverse – sometimes cooperative, sometimes conflictive –
elements into a total organizational endeavor.
Management involves the coordination of human and material resources toward objective
accomplishment. We often speak of individuals manging their affairs, but the usual connotation
suggests group effort. Four basic elements can be identified: (1) toward objectives, (2) through
people, (3) via techniques, and (4) in an organization. Typical definitions suggest that management is
a process of planning, organizing, and controlling activities. Some increase the number of
subprocesses to include assembling resources and motivating; others reduce the scheme to include
only planning and implementation. Still others cover the entire processes with the concept of
decision making, suggesting that decisions are made in establishing objectives, in planning programs
or projects to accomplish those objectives, in dividing the work and establishing structural
relationships, and in controlling the activity in question. This requires a broad connotation for the
decision-making process and is one alternativeapproach to the study of management.
Management is the primary force within organizations which coordinates the activities of the
subsystems and relates them to the environment. The study of management is relatively new in our
society, stemming primarily from the growth in size and complexity of business and other large-scale
organizations since the industrial revolution.

What do we mean by the phrase “management and organization theory”? Is it one body of
knowledge, a group of interrelated and consistent principles? Or, are these two separate bodies of
knowledge – (1) organization theory, and (2) management theory?
Theliterature that has developed around these concepts is somewhat ambiguous with regard to
these questions. Numerous books or articles can be found with “management theory,””organization
theory,” or “management and organization theory” in the title. And they tend to treat the same
subjects. There may be different emphasis on the various terms or concepts involved. However,
there are essential elements or common threads evident throughout the literature.
We think it may be useful to distinguish these concepts in order to provide a useful framework for
research, teaching, and practice. We suggest that organization theory is the body of knowledge,
including hypotheses and propositions, stemming form a definable field of study which can be
termed organization science. The study of organizations is an applied science because the resulting
knowledge is relevant to problem solving or decision making in ongoing enterprises or institutions.
“Describing it thus implies two things: one, that there is a formulated body of method and basic
knowledge; two, that there is a special group of problems to which this corpus of methods and
knowledge applies with obsevable results.”
As indicated in Figure 1.1, contributions to organization theory come from many sources. Deductive
and inductive research in a variety of disciplines provides a theoritical base of propositions which are
useful for understanding organizations and for managing them. Experience gained in management
practice is also an important input to organization theory. In short, Figure 1.1 illustrates how the art
of management is based on abody of knowledge generated by practical experience and scientific
research concerning organizations.
Management’s task is one of integrating and coordinating organizational resources (men, material,
money, time, and space, for example) toward the accomplishment of objectives as effectively and
efficiently as possible. The importance of the translation of theory into practice in the real world is
emphasized by Storer: “It is the application of scientific knowledge in engineering and other forms of
technology that has brought such spectacular changes in the material contexts of our lives over the
past century, and it has been the ‘popularizers’ rather than the scientists themselves who has
facilitated the impact of scientific findings upon our basic values and our view of the world.”
Organization theory, itself, stems from an applied science which draws upon the basic disciplines
and their relatively more abstract theories only as they are relevent to organizations found in
society. Management technology stems from the organization theory and is even more applied in
the sense that it focuses on the practice of management in ongoing organizations.
7
Kast, Freemont and James E. Rosenweig, Organization and Management (2nd Edition) Nature of Organization
Theory and Management

MANAGEMENT8
ORGANIZATION – two or more people who work together in a structured way to achieve a specific
goal or set of goals.
GOAL – thepurpose tha an organization strivesto achieve; or organizations often have more than one
goal; goals are fundamental elements of organizations.
MANAGEMENT – theprocess of planning, organizing, leading, and controlling the work of

organization members and of using all available organizational resources to reach stated
organizational goals.
MANAGER – people responsible fordirecting the efforts aimed at helping organizations achieve their
goals.
ORGANIZATION THEORY AND DESIGN9
Welcome to the real world of organizational theory. The shifitng fortunes of Xerox illustrate
organizational theory in action. Xerox managers were deeply involved in organizational theory each
day of their working lives – but they never realized it. Company managers didn’t fully understand
how the organization related to environment or how it should function internally. Familiarity with
organizational theory help managers analyse and diagnose what is happening and the changes
needed to keep the company competitive. Organizational theory gives us the tools to explain the
decline of Xerox. It helps us understand and explain what happened in the past, as well as what may
happen inthe future, so that we can manage our organizations more effectively.
Xerox’s failure to respond to or control such elements as competitors, customers, and creditors
inthe past-paced environment; its inability to implement strategic and structural changes to help the
organization attain effectiveness; ethical lapses within the organization; difficulties coping with the
problems of large size bureaucracy; lack of adequate cost controls; the negative use of power and
politics among managers that created conflict and allowed the organization to drift further into
chaos; and an outmoded corporate culture that stifled innovation and change. These are the
subjects with which organizational theory is concerned. Understanding organization theory can also
help Anne Mulcahy and other top leaders as they strive to find the right strategy, structure, and
design to revitalize the giant company.
Organizational theory draws lessons from these organizations and makes those lessons available to
students and managers. The theory of Xerox’s decline is important because it demonstrates that
even large, successful organizations ae vulnerable, that lessons are not learned automatically,and
that organizations are only as strong as their decision makers. Organizations are not static; they
continuously adapt to shifts in the external environment. Today, many companies are facing the
8
Stoner, James, R. Edward Freeman and Daniel R. Gilbert, Jr. Management (6th Edition) p.6
9
Daft, Richard L., Organization Theory and Design (8th Edition), p.5

need to transform themselves into dramatically different organizations bcause of new challenges in
the environment.
ORGANIZATION THEORY AND DESIGN10
Importance of Organizationsl
1. Bring together resources to achieve desired goals and outcomes

2. Produce goods and services efficiently
3. Facilitate innovation
4. Use modern manufacturing and information technologies
5. Adapt to and influence a changing environment
6. Create value for owners, customers, and employees
7. Accommodate ongoing challenges of diversity, ethics, and the motivation and coordination
of employees
10
Daft, Richard L., Organization Theory and Design (8th Edition), p.13

ESSENTIALS OF ORGANIZATION THEORY
WHY STUDY MANAGEMENT THEORY?
THEORY – coherent group of assumptions put forth to explain the relationship between two or more
observable facts and to provide a sound basis for predicting future events.
First, theories provide a stable focus for understanding what we experience. A theory provides
criteria for determining what is relevant.
Second, theories enable us to communicate efficiently and thus move into more and more complex
relationship with other people. Imagine the frustration you would encounter if, in dealing with
other people, you always had to define even the most basic assumptions you make about the world
in which you live!
Third, theories make it possible – indeed, challenge us – to keep learning about our world.
THE EVOLUTION OF MANAGEMENT THEORY
Management and organizations are products of their historical and social times and places. Thus,
we can understand the evolution of management theory in terms of how people have wrestled with
matters of relationships at particular times in history.
Approaches to early management theory:
1. Scientific management
2. Classical organization theory
3. The behavioral school
4. Management science
The scientific management school
Scientific management theory arose in part from the need to increase production. In the United
States especially, skilled labor was in short supply at the beginning of the twentieth century. The
only way to expand productivity was to raise the efficiency of workers.
Frederick W. Taylor (1856-1915) rested his philosophy on four basic principles:
1. The development of a true science of management, so that the best method for performing
each tasks could be determined.
2. The scientific selection of workers, so that each worker would be given responsibility for the
task for which he or she was best suited.
3. The scientific education and development of the worker.
4. Intimate, friendly cooperation between management and labor.
Taylor believed that management and labor had a common interest in increasing productivity.
Taylor based his management system on production-line time studies. Instead of relying on
traditional work methods, he analyzed and timed steel workers’ movements on a series of jobs.

Using time study as his base, he broke each job down into its components and designed the quickest
and best methods of performing each component. In this way he established how much workers
should be able to do with the equipment and materials at hand. He also encouraged employers to
pay more productive workers at a higher rate than others, suing a “scientifically correct” rate that
would benefit both company and worker. Thus, workers were urged to surpass their previous
performance standards to earn more pay. Taylor called his plan the differential rate system.
Henry L. Gantt (1861-1919) worked with Taylor on several projects. But when he went out on his
own as a consulting industrial engineer, Gantt began to reconsider Taylor’s incentive system.
Abandoning the differential rate system as having too little motivational impact, Gantt come up with
a new idea. Every worker who finished a day’s assigned work load would win a 50-cent bonus. Then
he added second motivation. The supervisor would earn a bonus for each worker who reached the
daily standard plus an extra bonus if all the workers reached it. This, Gantt reasoned, would spur
supervisors to train their workers to do a better job.
The Gilbreths, Frank B. and Lillian M. Gilbreth (1868-1924 and 1878-1972) made their contribution to
the scientific management movement as a husband and wife team. Lillian and Frank collaborated on
fatigue and motion studies and focused on ways of promoting individual worker’s welfare.
To them, the ultimate aim of scientific management was to help workers reach their full potential as
human beings. They tried to find the most economical motions for each task in order to upgrade
performance and reduce fatigue. The Gilbreths argued that motion study would raise worker
morale because of its obvious physical benefits and because it demonstrated management’s concern
for the worker.
Early work on industrial psychology and human relations received little attention because of the
prominence of scientific management. However, a major breakthrough occurred with a series of
experiments at a Chicago electric company, which came to be known as the Hawthorne Studies.
Interpretations of these studies concluded that the positive treatment of employees improved their
motivation and productivity. The publication of these findings led to a revolution in worker
treatment and laid the groundwork for subsequent work examining treatment of workers,
leadership, motivations, and human resource management. These human relations and behavioral
approaches added new and important contributions to the study of management and organizations.
Classical organization theory school
Scientific management was concerned with increasing the productivity of the shop and the
individual worker. Classical organization theory grew out of the need to find guidelines for
managing such complex organizations as factories.
Henry Fayol (1841-1925) is generally hailed as the founder of the classical management school – not
because he was the first to investigate managerial behavior

Fayol was interested in the total organization and focused on management, which he felt had been
neglected of business operations. The following are the 14 principles of management Fayol “most
frequently had to apply.” Before Fayol, it was generally believed that “managers are born, not
made.” Fayol insisted , however, that management was a skill like any other – one that could be
taught once its underlying principles were understood.
1. Division of Labor
2. Authority
3. Discipline
4. Unity of Command
5. Unity of Decision
6. Subordination of Individual Interest to the Common Good
7. Remuneration
8. Centralization
9. The Hierarchy
10. Order
11. Equity
12. Stability of Staff
13. Initiative
14. Esprit de Corps
Max Weber, the German sociologist, (1864-1920) developed a theory of bureaucratic management
that stressed the need for a strictly defined hierarchy governed by clearly defined regulations and
lines of authority. He considered the ideal organization to be a bureaucracy whose activities and
objectives were rationally thought out and whose divisions of labor were explicitly spelled out.
Weber also believed that technical competence should be emphasized and that performance
evaluations should be made entirely on the basis of merit.
Like the scientific management theorists, Weber sought to improve the performance of socially
important organizations by making their operations predictable and productive.
Mary Parker Follet (1868-1933) was among those who built on the basic framework of classical
school. However, she introduced many new elements, especially in the area of human relations and
organizational structure. In this, she initiated trends that would be further developed by the
emerging behavioral and management science schools.
Follet was convinced that no one could become a whole person except as a member of a group;
human beings grew through their relationships with other in organizations. Moreover, Follet’s
“holistic” model of control took into account not just individuals and groups, but effects of such
environmental factors as politics, economics, and biology.
Chester I. Barnard (1886-1961), like Follet, introduced elements to classical theory that would
further developed in later schools. According to Barnard, people come together in formal
organizations to achieve ends they cannot accomplish working alone. But as they pursue the
organization’s goals, they must also satisfy their individual needs. And so Barnard arrived as his
central thesis: An enterprise can operate efficiently and survive only when the organization’s goals
are kept in balance with the aims and needs of the individuals working for it.

For example, to meet their personal goals within the confines of the formal organization, people
come together in informal groups such as cliques. To ensure its survival, the firm must use these
informal groups effectively, even if they sometimes work at purposes that run counter to
management’s objectives. Barnard’s recognition of the importance and universality of this “informal
organization” was a major contribution to management thought.

STRUCTURE AND DESIGN
An organization is a pattern of relationships – many interwoven, simultaneous relationships –

through which people, under the direction of managers, pursue their common goals. These goals
are the products of the decision-making processes that were introduced as planning. The goals that
managers develop through planning are typically ambitious, far-reaching, and open-ended.
Managers want to ensure that their organizations can endure for a long time. Members of an
organization need a stable, understandable framework within which they can work together toward
organizational goals. The managerial process of organizing involves making decisions about creating
this kind of framework so that organizations can last from the present well into the future.
The crucial first step in organizing, which logically follows from planning, is the process of
organizational design. The specific pattern of relationships that managers create in this process is
called organizational structure. Organizational structure is a framework that managers devise for
dividing and coordinating the activities of members of an organization.
Four fundamental steps when managers begin to make decisions about organizing:
1. Divide the total workload into tasks that can logically and comfortably be performed by
individuals or groups. This referred to as the division of work.
Adam Smith’s Wealth of Nations opens with a famous passage on the specialization of
labor in the manufacture of pins. Describing the work in a pin factory, Smith wrote,
“One man draws the wire, another straightens it, a third cuts it, a fourth points it, a fifth
grinds it at the top for receiving the head.” Ten men working in this fashion made
48,000 pins in one day. But if, as Smith put it, “they had all wrought separately and
independently,” each might at best have produced only 20 pins a day. As Smith
observed, the great advantage of the division of labor was that by breaking the total job
into small, simple, separate operations in which different workers could specialize, total
productivity was multiplied geometrically. (Today we use the term division of work
rather that division of labor, reflecting the fact that all organizational tasks, from
manufacturing to management, can be subdivided.)
2. Combine tasks in a logical and efficient manner. The grouping of employees and tasks is
generally referred to as departmentalization.
To keep track of the complex web of formal relationships in an organization, managers

typically draw up an organizational chart to depict how work is divided. In an
organization chart, boxes represent the logical groupings of work activities that we call
departments. Departmentalization, therefore, is the result of managers deciding what
work activities, once they are divided into jobs, can be connected in “like” groupings. As
you can imagine, there are many varieties of jobs and departments within organizations,
and jobs and departments will vary from one organization to the next.
3. Specify who reports to whom in the organization. This linking of departments results in an
organizational hierarchy.

Since the early days of industrialization, managers worried about the number of people
and departments one could effectively handle. This question pertains to the span of
management control (frequently shortened to span of control or span of management.)
The span of management control refers to the number of people and departments that
report directly to a particular manager. Once work is divided, departments created, and
the span of control chosen, managers can decide on a chain of command – a plan that
specifies who reports to whom. These reporting lines are prominent features of any
organization chart.
The result of these decisions is a pattern of multiple levels that is called hierarchy. At
the top of the organizational hierarchy is the senior-ranking manager (or managers)
responsible for the operations of the entire organization. These managers are
commonly referred to as Chief Executive Officers (CEOs), Presidents, or Executive
Directors. Other, lower-ranking managers are located down the various levels of the
organization.
4. Set up mechanisms for integrating departmental activities into a coherent whole and
monitoring the effectiveness of that integration. This process is called coordination.
Coordination is the process of integrating the activities of separate departments in order

to pursue organizational goals effectively. Without coordination, people would lose
sight of their roles within the organization and be tempted to pursue their own
departmental interests at the expense of organizational goals.
A high degree of coordination is likely to be beneficial for work that is nonroutine and
unpredictable, for work in which factors in environment are changing, and for work in
which interdependence is high. In addition, organizations that set high performance
objectives usually require a higher level of coordination.
Organizational Design
Organizational design is the decision-making process by which managers choose an organizational

structure appropriate to the strategy for the organization and the environment in which members of
the organization carry out that strategy. Organizational design thus has managers looking in two
directions simultaneously: inside their organization and outside their organization. Knowledge
about organizational design has evolved over the past century. Initially, organizational design
processes were concentrated on the internal workings of an organization.
The four building blocks of organizational design – division of labor, departmentalization, hierarchy,
and coordination – all have rich traditions in the history of management practice.
The Classical Approach
Early managers and management writers sought the “one best way” – a set of principles for
creating an organizational structure that would work well in all situations. Max Weber,
Frederick Taylor, and Henri Fayol were major contributors to the so-called classical approach

to organizational design. They believed that the most efficient and effective organizations
had a hierarchical structure in which members of the organization were guided in their
actions by a sense of duty to the organization and by set of rational rules and regulations.
When fully developed, according to Weber, such organizations were characterized by
specialization of tasks, appointment by merit, provision of career opportunities for
members, routinization of activities, and a rational, impersonal organizational climate.
Weber called this a bureaucracy.
Weber praised bureaucracy for its establishment of rules for decision making, its clear chain
of command, and its promotion of people on the basis of ability and experience rather than
favoritism or whim. He also admired the bureaucracy’s clear specification of authority and
responsibility, which he believed made it easier to evaluate and reward performance.
The term bureaucracy has not always carried the modern negative connotation – a
framework for slow, inefficient, unimaginative organizational activity.
The Task-Technology Approach
A different set of variables internal to the organization are prominent in the task-technology
approach to organizational design that emerged in the 1960s. “Task technology” refers to
the different kinds of production technology involved in making different kinds of products.
Classical studies conducted in the mid-1960s by Joan Woodward and her colleagues found
that an organization’s task technology affected both its structure and its success.
Woodward’s team divided about 100 British manufacturing firms into three groups
according to their respective task technologies:
1) Unit and small-batch production
Unit production refers to the production of individual items tailored to a customer’s

specifications – custom-made clothes, for example. The technology used in unit
production is the least complex because the items are produced largely by individual
craftspeople. Small-batch production refers to products made in small quantities in
separate stages, such as machine parts that are later assembled.
2) Large-batch and mass production
Large-batch and mass production refer to the manufacture of large quantities of

products, sometimes on an assembly line (such as computer chips).
3) Process production
Process production refers to the production of materials that are sold by weight or
volume, such as chemicals or drugs. These materials are usually produced with
highly complex equipment that operates in a continuous flow.

Woodward’s studies led to three general conclusions.
First, the more complex the technology – ranging from unit to process production- the
greater the number of managers and managerial levels. In other words, complex
technologies lead to tall organizational structures and require more supervision and
coordination (see Figure 12-3, p.327, Stoner).
Second, the span of management for first- level managers increases as we move from unit to
mass production, but decreases when we move from mass to process production. Because
lower-level employees in both unit and process production firms usually do highly skilled
work, they tend to form small groups, making a narrow span inevitable. In contrast, a large
number of assembly-line workers who perform similar tasks can be supervised by one
manager.
Third, as a firm’s technological complexity increases, its clerical and administrative staffs
become larger because managers need help with paperwork and non-production-related
work so they can concentrate on specialized tasks. Also, complex equipment requires more
maintenance and scheduling, both of which generate additional paperwork.
The Environmental Approach
Around the time when Woodward was conducting her studies, Tom Burns and G.M. Stalker
were developing an approach to organizational design that incorporates the organizational
environment into design considerations. Burns and Stalker distinguished between two
organizational systems: mechanistic and organic.
In a mechanistic system, the activities of the organization are broken down into separate,
specialized tasks. Objectives for each individual and unit are precisely defined by higher-
level managers following the classical bureaucratic chain of command.
In an organic system, individuals are more likely to work in a group setting than alone.
There is less emphasis on taking orders from a manager or giving orders to employees.
Instead members communicate across all levels of the organization to obtain information
and advice.
After studying a variety of companies, Burns and Stalker concluded that the mechanistic
system was best suited to a stable environment, whereas organic systems were best suited
to a turbulent one. Organizations in changing environments would probably use some of
the two systems.
In a stable environment, each organization member is likely to continue performing the

same task. Thus, skill specialization is appropriate. In a turbulent environment, however,
jobs must constantly be redefined to cope with the ever-changing world. Organization
members must therefore be skilled at solving a variety of problems, not at repetitively
performing a set of specialized activities. In addition, the creative problem solving and
decision making required in turbulent environments are best carried out in groups in which

members can communicate openly. Thus, for turbulent environments, an organic system is
appropriate.
Types of Organizational Structures
Organizational structure refers to the way in which an organization’s activities are divided, grouped,
and coordinated into relationships between managers and employees, managers and managers, and
employees and employees. An organization’s departments can be formally structured in three
major ways: by function, by product/market, or in matrix form.
Functional organization
Organization by function brings together in one department everyone engaged in one

activity or several related activities that are called functions. For example, an organization
divided by function might have separate manufacturing, marketing, and sales departments.
A sales manager in such an organization would be responsible for the sale of all products
manufactured by the firm.
Functional organization is perhaps the most logical and basic form of departmentalization
(see Figure 12-4, p.330, Stoner). It is used mainly by smaller firms that offer a limited line of
products because it makes efficient use of specialized resources. Another major advantage
of a functional structure is that it makes supervision easier, since each manager must be
expert in only a narrow range of skills. In addition, a functional structure makes it easier to
mobilize specialized skills and bring them to bear where they are most needed.
Product/Market organization
Product or market organization, often referred to as organization by division, brings together

in one work unit all those involved in the production and marketing of a product or a related
group of products, all those in a certain geographic area, or all those dealing with a certain
type of customer. In the 1990 Hewlett-Packard reorganization, John Young replaced one
kind of product organization with another kind of product organization.
Unlike a functional department, a division resembles a separate business. The division head
focuses primarily on the operations of his or her division, is accountable for profit or loss,
and may even compete with other units of the same firm.
A product/market organization can follow one of three patterns.
Most obvious is division by product, shown in Figure 12-5 (p.331, Stoner). The Hewlett-
Packard organization structure through the 1980s and the early 1990s was this type.
Division by geography is generally used by service, financial, and other nonmanufacturing

firms, as well as by mining and oil-producing companies (see Figure 12-6, p.332, Stoner).
Geographic organization is logical when a plant must be located as close as possible to
sources of raw materials, to major markets, or to specialized personnel.

In division by customer, the organization is divided according to the different ways
customers use products (see Figure 12-7, p.332, Stoner). At Hewlett-Packard, Platt
Birnbaum hints that this might be the product/market focus of the future in digital
telecommunications marketplace.
Matrix organization
The matrix structure, sometimes referred to as a “multiple command system,” is a hybrid

that attempts to combine the benefits of both types of designs while avoiding their
drawbacks. An organization with a matrix structure has two types of structure existing
simultaneously. Employees have in effect two bosses – that is, they work in two chains of
command. One chain of command is functional or divisional, the type diagrammed vertically
in the preceding charts. The second is a horizontal overlay that combines people from
various divisions or functional departments into a project or business team led by a project
or group manager who is an expert in the team’s assigned area of specialization (see Figure
12-8, p.333, Stoner – which depicts the multidimensional matrix structure of Dow-Corning in
the 1970s).
As organizations have become more global, many use a type of matrix form in their
international operations. There may be product or division managers, as in a divisionalized
firm, as well as national managers for each country in which the company does business.
Thus, a division employee would report to the divisional manager on product-related issues
and to the national manager on political issues or those involving international relations.

ORGANIZATIONAL PROCESSES
Organizational processes11 are the systematic way a company defines, organizes and
implements its operations through the stages of the product life cycle. This can include
strategic measures to improve business performance, proprietary models and intellectual
property that contribute to an organizations goals and objectives. Process improvement is
closely related to life cycle management. At any stage of a companies operations, the
analysis of inputs and outputs can be audited, assessed and graded according to a set of
performance requirements. Improving productivity, minimizing costs, reducing social costs
and environmental emissions form part of the process improvement paradigm. A company
continually works towards organizational process improvement to enhance its bottom line.
The organizational change process can be analyzed by breaking down the stages of the
product or service life cycle. By identifying each stage and the procedures used,
organizations are better able to assess the impact of changes and build models to quantify
the effects of the change on the companies organizational processes. Change management
seeks to balance the goals and objectives of an organization and align capital and resources
to optimize a companies performance.
The embryonic stage of a companies organizational process is the group of activities

related to defining and analyzing the initial requirements of the product or service. This
scopes and bounds the nature of a companies activities and establishes the companies
operational framework. Process improvement at this level seeks to make best use of the
companies resources to establish the initial foundation that will constitute the mandate the
company operates from.
The development stage of the product life cycle is where the organization of resources in
preparation for the implementation of the companies business objectives take place.
Selecting, defining and refining production for organizational process improvement can
streamline and accelerate the manufacture and distribution of the product and service.
The implementation phase of organizations processes is the integration of the companies

core business activities. Streamlining operational efficiency can help accelerate the
manufacture or distribution of the product. Strategic initiatives to capitalize on the growth
stage of the product life cycle allow a company to build a greater market share.
Sustaining companies operations becomes more critical when the market matures and the
product moves into the declining phase of the product life cycle. Organizations processes
can shift to costs cutting and greater efficiency to maintain declining margins. At this stage
some companies are forced to leave the market in response to changing consumer
preferences, tastes or the introduction of new technology or superior product. This is where
the greatest potential for change management takes place. Organizational processes adapt
according to the changing goals and objectives of the company and market conditions.
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Organizational change12 is the term used to describe the transformation process that a
company goes through in response to a strategic reorientation, restructure, change in
management, merger or acquisition or the development of new goals and objectives for the
company. The realignment of resources and the redeployment of capital can bring many
challenges during the transformation process and organizational change management seeks
to address this by adopting best practice standards to assist with the integration of new
company vision.
Organizational change is not just change for the sake of change itself. The major precursor
for organizational change is some form of exogenous force such as an external event. Cuts in
a companies funding, the streamline of operations due to a merger are common examples
of the magnitude of an event that creates organizational change and development.
Companies that are nearing the end of the product life cycle make organizational changes in
response to exiting a market or reorienting resources to new or existing business operations.
The challenges encountered by organizational change have a ripple effect on the entire
organization. When the business units that comprise a company are fully integrated, a
change or restructure in one can have a profound domino effect on another. Trying to
increase productivity whilst experiencing a reduction in resources is a prime example of how
shorfalls can create stress for company employees. Effectively managing this process is an
art that has created a new area of expertise that has become known as change
management.
Organizational change can impact the psychological, emotional and physical states of
companies employees. Many people experience comfort zones and develop barriers during
their daily lives. A change in company operations can challenge and stress peoples values
and central core beliefs. Dealing with behavioral and cultural changes is part of the
organizational change process and an important consideration for change management
professionals. Adopting new company procedures and practices can require the
development of new education programs to assist with aligning people to new company
operations.
Companies that are going through extensive organizational changes employ the services of
highly specialized personnel who can assist with the integration process. Personnel who
operate in this area are adept at translating a companies vision, communicating, integrating
and re-educating individuals to align with the new goals and objectives of the company. This
can include advising management where rigid operational structures need to be adapted to
better serve the needs of the companies and employees alike.
Change management is evolving as the business landscape changes in response to changing

customer preferences, developments, tastes and new and improved processes and
technologies.
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Why Planned Change is Needed13
Planned change is the systematic attempt to redesign an organization in a way that will help
it adapt to changes in the external environment or to achieve new goals. A detailed
definition of planned change is “deliberate design and implementation of a structural
innovation, a new policy or goal, or change in operating philosophy, climate or style.”
Change programs are necessary today procise because of the shift in time and relationships
that we have seen throughout the organizational world. The sophistication of information
processing technology, together with the increase in the globalization of organizations,
means that managers are bombarded with more new ideas,new products, new challenges
that ever before (see Figure 15-1, p.413, Stoner). To handle such increase in information,
accompanied by a decrease in the decision-making time managers can afford to take,
mangers must improve their ability to manage change. Many large organizations have
explicit change managementprograms to icrease the ability of people throughout the
organization to anticipate and learn from the changes that are occurring.
Types of Planned Change14
An organization can be changed by altering its structure, its technology, its people, or some
combination of these features (see Figure 15-3, p.419, Stoner)
Structural Change
Changing an organization’s structure involves rearranging its internal systems, such

as the lines of communication, work flow, or management hierarchy.
Organizational Design
Classical organizational design focuses on carefully dfining job

responsibilities and on creating appropriate division of labor and lines of
performance. One of the most significant structural trends is toward the
flat, lean organization, in which middle layers of management eliminated to
streamline the interaction of top managers with non-management
employees,who are given more responsibilities.
Decentralization
One approach to decentralization involves creating smaller, self-contained

organizational units that are meant to increase the motivation and
performance of unit members and to focus their attention on high-priority
activities. Decentralization also encourages each unit to adapt its structure
and tachnology to its particular tasks and to its environment.
13
p.412, Stoner
14
P.417, Stoner

Modified Work Flow
Modification of work flow and careful grouping of specialties may also lead
to an improvement in productivity and morale. One expression of this trend
is the amount of money employees can spend without getting authorization
Technological Change
Changing an organization’s technology involves altering its equipment, engineering

processes, research techniques or production methods. This approach goes back to
the scientific management theory of Frederick S. Taylor.
Production technology often has a mjor effect on organizational structure. For that
reason, technostructural or sociotechnical approaches attempt to improve
performance by simultaneously changing aspects of an organization’s structure and
its technology. Job enlargement 15and job enrichment 16are examples of
technostructural approaches to change.
Changing People
Both the technical and structural approaches try to improve organizational

peformance by changing the work situation. The people approaches on the other
hand, try to change employee behavior by focusing on their skills, attitudes,
perceptions, and expectations.
A MODEL OF THE CHANGE PROCESS
Although organizations are beset by many forces for change, it is important to recognize that
opposing forces act to keep an organization in a state of equilibrium. These opposing forces, then,
support stability or the status quo.
Force-Field Analysis
According to the force-field theory of Kurt Lewin, every behavior is the result of an
equilibrium between driving and restraining forces. The driving forces push one way; the
restraining forces push the other. The performance that emerges is a reconciliation of the
two sets of forces. An increase in the driving forces might increase performance, but it
might also increase the restraining forces.
15
means increasing the scope of a job through extending the range of its job duties and responsibilities
generally with in the same level and periphery. This contradicts the principles of specialisation and the division
of labour whereby work is divided into small units, each of which is performed repetitively by an individual
worker.
16
is an attempt to motivate employees by giving them the opportunity to use the range of their abilities. It is
an idea that was developed by the American psychologist Frederick Hertzberg in the 1950s. It can be
contrasted to job enlargement which simply increases the number of tasks without changing the challenge. As
such job enrichment has been described as 'vertical loading' of a job, while job enlargement is 'horizontal
loading'.

Lewin’s model (see Figure 15-2, p.415, Stoner) reminds us to look for multiple causes of
behavior rather than a single cause. Programs of planned change based on Lewin’s ideas are
directed first toward removing or weakening the restraining forces and then on creating or
strengthening the driving forces that exist in organizations.
Sources of Resistance
The restraining forces – the ones that keep an organization stable – are of special
interest, since they represent potential sources of resistance to planned change. We
will group these sources of resistance into three broad classes: the organizational
culture, individual self-interests, and individual perceptions of organizational goals
and strategies.
Organizational Culture
Of the three forces, culture may be the most important in shaping and maintaining
an organization’s identity. Culture is a primary force in guiding employee’s behavior.
As a general rule, employees stay in an organization because the work helps them
meet their life goals and because their personalities, attitudes, and beliefs fit into
the organizational culture. Indeed, many employees identify with their organization
and take its gains and losses personally. As a result, they may feel threatened by
efforts to make radical changes in the organization’s culture and “the way we do
things.”
Self-Interests
Although employees can and do identify with their organizations, they are also
concerned with themselves. In return for doing a good job, they expect adequate
pay, satisfactory working conditions, job security, and certain amounts of
appreciation, power, and prestige. When change occurs, employees face a
potentially uncomfortable period of adjustment as they settle into a new
organizational structure or a redesigned job.
Perceptions of Organizational Goals and Strategies
Goals and strategies are extremely powerful for organizing and coordinating the
efforts of any organization. Indeed, mission statements can guide employee actions
in the absence of formal policies and procedures. This powerful force for stability
can make it difficult to change, however. Sometimes employees do not understand
the need for a new goal because they do not have the same information their
managers have. Or they may long for the “good old days.”
Table 15-1 (p.418, Stoner) describes some common methods for dealing with
resistance to change.

INFORMATION AND CONTROL
Information systems enable managers to control how they do business.
All the managerial functions – planning, organizing, leading, and controlling- rely on steady stream of
information about what is happening at, and beyond, an organization. Only with accurate and
timely information can manager monitor progress toward their goals and plans into reality. If
managers cannot stay “on track,” anticipating potential problems, developing the skills to recognize
when corrections are necessary, and then making appropriate corrections or adjustments as they
progress, their work may be fruitless and costly.
Managers at all levels are finding that computer-based information systems provide the information
necessary for effective operations. These management information systems (MIS) are rapidly
becoming indispensable for planning, decision making, and control. How quickly and accurately
managers receive information about what is going right and what is going wrong largely determines
how effective the control system will be.
The Nature of Information
There is a distinction between data and information.
Data are raw, unanalyzed numbers and facts about events.
Information data that have been organized or analyzed in some meaningful way.
Four factors in evaluating information: its quality, timeliness, quantity, and relevance to
management.
Information quality
The more accurate the information, the higher its quality and the more securely
managers can rely on it when making decisions. In general, however, the cost of
obtaining information increases as the quality desired becomes higher. If the
information of a higher quality does not add materially to a manager’s decision-
making capability, it is not worth the added cost.
Information timeliness
For effective control, corrective action must be applied before there has been too
great a deviation from the plan or standard. Thus, the information provided by the
information system must be available to the right person at the right time for the
appropriate action to be taken.
Information quantity
Managers can hardly make accurate and timely decisions without sufficient
information. However, managers are often inundated with irrelevant and useless

information. If they receive more information than they can productively use, they
may overlook information on serious problems.
Information relevance
Similarly, the information that managers receive must have relevance to their
responsibilities and tasks.

ORGANIZATIONAL DYNAMICS
DECISION MAKING
Decision making is defined as the process of identifying and selecting a course of action to solve a
specific problem.17
The decision-making process involves the recognition of a problem, identification of alternative

courses of action, evaluation of potential outcomes, and a choice. Information is the raw material
for the decision-making process. It may be entirely internal information flow for an individual or an
organization. On the other hand, it very likely involves inputs from the environment. Such
information may flow to the decision point routinely, or it may be required for a specific problem.
Information is data which are processed and meaningful for a particular decision problem.18
Time and human relationships are crucial elements in the process of making decisions. Decision
making connects the organization’s present circumstances to actions that will take the organization
into the future. Decision making also draws on the past; past experiences – positive and negative –
play a big part in determining which choices managers see as feasible or desirable. Objectives for
the future are thus based, in part, on past experiences.19
A manager, of course, does not make decision in isolation. While he or she is making decisions,
other decisions are being made by people both within the same organization and outside, at other
businesses, government offices, and social organizations. When managers project possible
consequences of their own decisions, they must be conscious that other people’s decisions may
conflict or interact with their own. Decision making, is short, is a process that managers conduct in
relationship with other decision makers.20
The Nature of Managerial Decision Making21
Programmed Decisions
Solutions to routine problems determined by rule, procedure or habit. Programmed

decisions are made in accordance with written or unwritten policies, procedures, or rules
that simplify decision making in recurring situations by limiting or excluding alternatives.
Programmed decisions are used for dealing with recurring problems, whether complex or
uncomplicated. For example, managers rarely have to worry the salary range for newly
hired employee because organizations generally have a salary scale for all positions.
Nonprogrammed Decisions
Specific solutions created through an unstructured process to deal with nonroutine

problems. Nonprogrammed decisions deal with unusual or exceptional problems. If a
problem has not come up often enough to be covered by a policy or is so important that it
deserves special treatment, it must be handled as a nonprogrammed decision. Problems
17
Stoner, James, R. Edward Freeman and Daniel R. Gilbert, Jr. Management (6th Edition) p. 239
18
Kast, Freemont and James E. Rosenweig, Organization and Management (2nd Edition) p. 382
19
20
21

such as how to allocate an organization’s resources, what to do about a failing product line,
how community relations should be improved – in fact, most of the significant problems a
manager will face – usually require nonprogrammed decisions.
Certainty, Risk, and Uncertainty
In making decisions, all managers must weigh alternatives, many of which involve future
events that are difficult to predict, such as competitor’s reaction to a new price list, interest
rates in three years, or the reliability of a new supplier.
Certainty22
Under conditions of certainty, we know our objective and have accurate,

measurable, reliable information about the outcome of each alternative we are
considering.
Risk23
Risk occurs whenever we cannot predict an alternative’s outcome with certainty, but
we do have enough information to predict the probability24 it will lead to the
desired state.
Uncertainty25
Under conditions of uncertainty, little is known about the alternatives or their

outcomes. Uncertainty arises from two possible sources. First, managers may face
external conditions that are partially or entirely beyond their control, such as the
weather – an important factor for a three-day festival held in outdoor tents. Second
and equally important, the manager may not have access to key information. If this
is a new festival, perhaps the director has not formed a network with other festival
directors who could share valuable information about likely attendance records. Or
perhaps no one can accurately predict the turnout for a new storytelling festival held
in the fall, when many families are busy with school activities and other events.
POWER26
Power is an intangible for in organizations. It cannot be seen, but its effects can be felt. Power is
often defined as the potential ability of one person (or department) to influence other persons (or
departments) to carry out orders or to do something that they would not otherwise have done. The
achievement of desired outcomes is the basis of the definition used here: Power is the ability of one
22
Decision making condition in which managers have accurate, measurable, and reliable information about the
outcome of various alternatives under consideration.
23
Decision making condition in which managers know the probability a given alternative will lead to a desired
goal or outcome.
24
A statistical measure of the chance a certain event or outcome will occur.
25
Decision making condition in which managers face unpredictable external conditions or lack the information
needed to establish the probability of certain events.
26
Daft, Richard L., Organization Theory and Design (8th Edition), p. 493

person or department in an organization to influence other people to bring about desired outcomes.
It is the potential to influence others within the organization but with the goal of attaining desired
outcomes for power holders.
Power versus Authority
Anyone in an organization can exercise power to achieve desired outcomes. The concept of
formal authority is related to power but is narrower in scope. Authority is also a force for
achieving desired outcomes, but only as prescribed by the formal hierarchy and reporting
relationships. Three properties identify authority:
1. Authority is vested in organizational positions. People have authority because of the

positions they hold, not because of personal characteristics or resources.
2. Authority is accepted by subordinates. Subordinates comply because they believe
position holders have a legitimate right to exercise authority.
3. Authority flows down the vertical hierarchy. Authority exists along formal the chain of
command, and positions at the top of the hierarchy are vested with more formal
authority than are positions at the bottom.
POLITICS27
Power has been described as the available force or potential for achieving desired outcomes.
Politics is the use of power to influence decision in order to achieve those outcomes. The exercise of
power and influence has led to two ways to define politics – as self-serving behavior or as a natural
organizational decision process.
The first definition emphasizes that politics is self-serving and involves activities that are not
sanctioned by the organization. In this view, politics involves deception and dishonesty for purposes
of individual self-interest and leads to conflict and disharmony within the work environment.
Although politics can be used in a negative, self-serving way, the appropriate use of political
behavior can serve organizational goals. The second view sees politics as a natural organizational
process of resolving differences among organizational interest groups. Politics is the process of
bargaining and negotiation that is used to overcome conflicts and differences of opinions.
Politics, like power, is intangible and difficult to measure. It is hidden from view and is hard to
observe in a systematic way. Two surveys uncovered the following reactions of managers toward
political behavior.
1. Most managers have negative view toward politics and believe that politics will more often
hurt than help an organization in achieving its goals.
2. Managers believe political behavior is common to practically all organizations.
3. Most managers think political behavior occurs more often at upper rather than lower levels
in organizations.
27

4. Political behavior arises in certain decision domains, such as structural change, but is absent
from other domains, such as handling employee grievances.
Based on these surveys, politics seems more likely to occur at the top levels of an organization and
around certain issues and decisions. Moreover, managers do not approve of political behavior.
CONFLICT
We each must deal with conflict in our personal lives and organizational activities. Conflict involves
a disagreement about allocation of scarce resources or a clash of goals, statuses, values,
perceptions, or personalities. Much of the conflict we experience arises from our communication of
our wants, needs, and values to others. Sometimes we communicate clearly, but others have
differing needs. Sometimes we communicate poorly, and conflict emerges because others
misunderstand us.28
Conflict means that group clash directly, that they are in fundamental opposition. Conflict is similar
to competition but more severe. Competition means rivalry among groups in the pursuit of a
common prize, while conflict presumes direct interference with goal achievement.29
Intergroup Conflict in Organizations30
Intergroup conflict can be defined as the behavior that occurs among organizational groups
when participants identify with one group and perceive that other groups may block their
group’s goal achievement or expectations.
Intergroup conflict requires three ingredients: group identification, observable group

differences, and frustration. First, employees have to perceive themselves as part of an
identifiable group or departments. Second, there has to be an observable group difference
of some form. Groups may be located on different floors of the building, members may
have different social or educational backgrounds, or members may work in different
departments. The ability to identify oneself as a part of one group and to observe
differences in comparison with other groups is necessary for conflict.
The third ingredient is frustration. Frustration means that if one group achieves its goal, the
other will not; it will be blocked. Frustration need not be severe and only needs to be
anticipated to set off intergroup conflict. Intergroup conflict will appear when one group
tries to advance its position in relation to other groups.
28
29
30

CURRENT ISSUES IN MANAGEMENT
Introduction31
Improvement and change are two of the important concepts of management in an organization.
Naturally, these two significant concept allow organization perform effectively and provide the
expected outputs. In order to do these, the cooperation and contribution of the employees must be
present. However, without the provision of due support from the management, the employees may
not be directed towards the achievement of the company’s objectives. It is then essential that the
managers employ the appropriate instruments that will encourage the employees to perform at
their best. In turn, this will promote the achievement of continuous change and improvement within
the organization. This paper then aims to identify the different issues and trends in management.
Current Issues in Management
Corporate Social Responsibility
Business culture has turned its focus when the businesses penetrate globally. There had
been dispute, argument, confusion and debate towards the subject “social responsibility” in
business arena. Many believed that it is a tool to change the business set up to promote a
more well working environment. However, there are also cynical about the existence of
social responsibility and its role in managing the business. Even so in history, the topic of
social responsibility has received so much attention when it first came into popularity in the
developed world. It became controversial because of its inconsistencies with the free
enterprise system. However, whenever we view today’s scenario, there are indications that
social responsibility has become an obligation for any business, and that it is permanent
fixture on the corporate business scene ( 1999).
Along with this is the question: Has social responsibility shows significance in managing
today’s organization than ever? The term corporate social responsibility becomes an
increasingly important issue especially to U.S. businesses that it has become so prevalent as
to have become almost devoid of meaning (2000).
In the recent years, many academic paraphernalia have recognized business to be socially
responsible. These books educate us that changing societal expectations demand an
increased level of participation by business in the social arena. We read and teach about the
good, "interactive," and "proactive," companies that influence their external environments
in positive ways, and how these companies do better than the bad "inactive" or "passive"
companies. This concept is similar to teaching "leadership" which is also currently in vogue
on many campuses. There is a growing consensus that business schools must teach more of
the traditionally "soft" skills, and less of the more concrete courses associated with business
(2002).
According to (1999), both scholars and corporate stakeholders have expressed uncertainty
and hesitant set of attitudes over the question of effectiveness of business entities meeting
31
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06/04/2011

their social responsibilities. Corporate stakeholders have considerably shown mixed
attitudes towards the issue. At times, they expressed respect toward corporations and their
top executives while at other, they felt disappointment and criticisms. With the fast growing
private sectors in many developed nations led by the United States, several writings praised
the skills, decision-making and even values of corporate leaders. And yet as the year drew
close to 90s, the public was experiencing largely negative attitudes towards corporations
and the handling of their social responsibilities, whether toward their stockholders or their
inner and outer communities ( 1999). A good example has been provided by Boiral (2003) in
the case of Starbucks outlets in the United States. Starbucks, a specialty coffee built up its
image and competitiveness around “corporate social responsibility activities.” However, it
has recently come under attack by NGOs for failing to open up its social responsibility
programmes to independent verification.
Over the years, in an effort to explain the complexity of social responsibility, businesses and
academic researchers alike have displayed increased levels of enthusiasm for corporate
social responsibility (CSR). Essentially, they contend that CSR may be the excellent
instrument to enhance the legitimacy of the firm among stakeholders and develop positive
social responsibility images.
Other studies attested to the relevance of social responsibility in managing business. In a

study conducted by and (2002) on sustainable development, 95% percent of the
respondents recognized that sustainable development was important to their business.
When the respondents were asked about the changes their company has to undertake in
order to attain sustainable development, they aligned that corporate social responsibility is
the big factor that is the most important in their organizations. The researchers conclude
that there is a significant opportunity to connect business needs of sustainability to
corporate social responsibility.
To explore more about the issue social responsibility, (2002) compared insights of
businesses in U.S. and Europe towards the issue of responsibility. Based on their findings, it
clearly show that companies based in different countries hold substantially different
perspectives on how important it is to publicly perceived as socially responsible and which
issues of social responsibility are more important to emphasize.
In this respect, it is illustrated that businesses from different countries do not show the
same level of dedication to being perceived as socially responsible.
Moreover, it is also attested that firms across countries have variety of principles, processes
and stakeholder issues to express that they are responsibly committed.
People expect firms not only to perform the traditional function of providing goods and
services to all citizens who are willing to pay for them, but also to help society solve its
problems. If these things are generally seen as desirable, and the firm does them, then it is
socially responsible. If the firm does not, then some people may feel it is irresponsible.
What is a proper foundation for social responsibility? According to texts, the proper
foundation of social responsibility generally lies to the fact that social responsibility involves

questions of ethics, legality, economic costs, and management judgement. In general, a
company that is ethical will be socially responsible. But, the core of the problem for teachers
of social responsibility lies with the question, "can there be ethical behavior without a pure
motive?" Can social responsibility be divorced from ethics? Can social responsibility be
employed as a cynical device, a mere marketing tool? Obviously, the answer is that it can.
Some authors of business texts admit that there can be no ethical conduct without intent to
do right ().
Staff Retention and Knowledge Management
Knowledge has always been an intangible concept. We know that it is the pillar of strength
of every individual as well as the core of every political society. It is a complex concept that
all activities and every human development are attributed to it. Even the vastness of
scientific fields is rooted to the concept of basic human knowledge.
In the past centuries, people have recognized the indispensability of knowledge. We even
accepted the principle that knowledge itself is power. It is the fuel, which runs the engine of
human interaction and organization ( 2001). However, intangible as it is, it was considered
as a mere idea that exists like the air that we breathe. Humans deemed it to be always there
when the need arises, thus, notwithstanding its importance; it was never a subject of a
closer scrutiny as compared to the attention given to the sciences that emanated from it.
During the turn of the millennium and the emergence of the global economy, organizations,
especially the financial institutions, have formulated a systematic manner of handling this
knowledge power. Knowledge remains to be the primary asset of companies- a leading
indicator is the extent to which they invest on human capital development ( 2002).
Contemporary corporate management specifically, the financial sector had been increasingly
aware of the future benefits of organizing ideas to have a aggressive advantage over others.
All its elements, such as the ideas, advanced technology, modern machinery as well as the
human minds, have been pooled altogether to form a scientific scheme now commonly
known as KNOWLEDGE MANAGEMENT.
KNOWLEDGE MANAGEMENT is the collection of processes that govern the conception,

distribution, and consumption of knowledge. In one form or another, knowledge
management has been around for a very long time. Practitioners have included
philosophers, priests, teachers, politicians, scribes, librarians, etc.
In business terms, knowledge management is a discipline best described as a continuing

process that focuses on the creation of business performance enhancements--focused on
people and not technology ( 2001). While technology enhances the feasibility of transferring
knowledge between people, knowledge management includes creating and sharing
knowledge as an organizational asset to drive the business. (1999), on the other hand did
not center his definition on any aspect. (1999) defined knowledge management as
comprising of any process or practice of creating, acquiring, capturing, sharing and using
knowledge, wherever it resides, to enhance the learning and performing in organizations.
Moreover, the value proposition of knowledge management states that there are
fundamental business reasons and expected benefits for pursuing this process approach.

There are gains the organization can achieve by using knowledge management to measure
results, such as creating an Intranet and knowledge repositories (2001).
In the past, knowledge management among organizations/companies is being practiced

through organizational libraries, formal training and education programs, mentoring and
apprenticeship systems ( 19940 These are evidences proving the fact that organizations have
been doing different means to manage knowledge and provide for its transfer among the
workforce. Since then several developments concerning the approach to knowledge
management has been developed. These approaches are a product of a considerable
number and time of researches done.
Over the years, the extensive research on knowledge management identified a lot of
different approaches to the practice of knowledge management. In fact these researches
were able to determine which particular approach is compatible for a specific organization (
1994). This proves the fact that the actual way that knowledge management is implemented
in an organization varies widely according to the types of organization, its industry and
culture. Some o the most common approaches to knowledge management includes;
approach through innovation, quality control, knowledge technology, human resource
management, intellectual capital, strategic approach, network approach, learning
organization approach, and Information and Communication Technology approach.
Knowledge management can be approached from the perspective of innovation. This

perspective has an emphasis on research and development and marketing (2001). More
specifically the approach manages knowledge related to the acquirement of new products
and services. The approach through innovation is particularly applicable to the recently
popular software industry. For this industry, it is very important that new innovations are
acquired as well as preserved in the organization since there is a very strict competition
among companies in this industry. Furthermore, the modern consumers are increasingly
demanding for innovative products and services necessary for the modern world.
An approach through quality control is basically aimed at the improvement of the quality of
the products of a particular organization by means of quality safeguarding systems (1994).
This approach is applicable to organizations involved in the manufacturing industry. The
learning organization approach as well as the organizational approach is more general
compared to the approach from the perspective of quality control. These two focuses on the
whole organization, in other words knowledge management is aimed at organizational
development.
Knowledge management approached from the point of view of knowledge technology has
an emphasis on the transfer of knowledge. Transfer of knowledge in this scenario is made
explicit in knowledge systems (2001). This approach is similar to the network approach. Like
the former approach, the network approach is centered on knowledge sharing or the
transfer of knowledge within the organization. In the network approach, knowledge is
shared through an intensified collaboration agreements and alliances. A more advanced and
comprehensive approach in terms of knowledge transfer is the information and

communication technology approach. The ICT approach emphasizes on the contribution of
information and communication technology to the co-ordination, communication and
sharing of knowledge. This approach is also in a larger scale compared to the other two. That
is, the ICT approach maximizes the use of the Internet and all the available resources of the
advanced technology in knowledge management. This is particularly applicable to
organizations operating internationally.
The approach to knowledge management from the perspective of the human resource
management can be considered as the universal approach. That is, this can be applied to any
industry, organization and company. Knowledge management through the human resources
managers deals with self-governing teams, co-operation, motivation and stimulation of
(natural) leadership to learn people in organizations to adjust and to change. In this
approach, the human resource managers who are the most experienced when it comes to
managing people are the major players. Since the people involved in the organization
determine knowledge, it is a good practice that knowledge management is practiced
together with human resources management (1994).
Organizations may choose to adopt any one of these approaches or combine several
approaches that are applicable for their company. Organizations and companies of today are
being confronted with a lot of different choices concerning knowledge management. Of all
these approaches, however, three general approaches stand out (2002):
1. Sharing existing knowledge: this was the thrust of many early knowledge initiatives.
2. Creating and converting new knowledge: this is the innovation thrust.
3. A growing external focus on the approach: this has led to an upsurge in the interest
in customer relationship management systems and interest in knowledge markets.
Team Building
Teams are valued in large part for their outcomes whether the team won the basketball
tournament, whether the army won the battle and so forth. However, such outcome often
contains variance attributable to factors other than teamwork. Team process measures may
give people a true picture of team functioning than do outcome measures. Over the past
decades, much research has been devoted to the investigation of team leadership and
performance (2000) as the communication involves the active exchange of information
between more members of the teams providing information to others in the appropriate
manner.
Team leadership is includes the direction and structure provided by formal leaders as well as
by other members (1998)). Team leadership implies that planning and organizing activities
have enabled team members to respond as a function of the behaviors of others.
Monitoring team performance is a crucial component (1999) which refers to the observation
and awareness of activities and performance of other team members and that team
members are competent in their individual tasks and have a substantive understanding of
the tasks of other members.

Therefore, before a group of individuals can function effectively as a team, the members
must have the technical knowledge and skills to perform their own tasks ( 1997). In the
workforce managers wants his team members to have positive attitudes toward the team
and its task and support for accomplishing team goals and knows their own tasks and those
of other members with whom they interact with as it allows the team members to
coordinate their activities by monitoring the performance of other members,
communicating with them and providing assistance when needed and then the team leaders
and its members focus their attention and concern on improving teamwork rather than on
individual success and performance.
Members of highly interdependent teams experience to receive more training in order to

assure development of shared cognitive models (2003) Basically, teams have been most
effective when the leaders are directive and the team members are open and not afraid to
speak up (1999) as these traits may influence the leader's and members' abilities of how to
interact with team members, thereby affecting positively on team leadership and
performance. If a team member believes for the lacking of certain team performance it will
alter the individual's cognitive model negatively affecting its performance.
A condition of leadership teams is that the individual leaders form a coordinated and
cohesive authority and decision-making structure presenting a unified front to the
subordinate group. In particular, confusion over role definition and scope of responsibility
between leaders can lead to an overlap of functions, lack of mutual trust and tension
between the leaders (1982). In addition, because of absences during work, leaders must be
able to step smoothly into higher level roles as well as trust and respect that leaders' exhibit
that could be crucial for such continuity of better leadership and performance in teams.
Many business organizations are concerned about team leadership and performance of their
employees that deepens the skills and competencies of their leaders. Most organizations
recognize that effective team leadership is one of the most powerful competitive
advantages an organization can have which leads one to believe that few organizations are
evaluating the effectiveness of their team development programs that will result in
improved team skills (1999). Companies as of today are facing a multitude of outcome-based
demands regarding their team performance from a variety of driving forces including
increased competition and national standards.
There are challenges that confront managers to varying degrees in each of the team
structures. These challenges include: (1971).
Ø Power struggles as boundaries of authority and responsibility overlap
Ø Conflict with respect to the use of shared resources
Ø The integration required to coordinate work across projects
Ø The challenge of securing team member motivation and commitment to such

outcomes

Many of the increased demands of managing a full complement of dedicated team
members’ attention to team selection become more important. Working in a team with
dedicated teammates increases the opportunity for role conflicts as well as interpersonal
conflicts. Furthermore, team priorities may become unclear as the team members impose
priorities based on personal interests as influenced by the priorities of certain functional
discipline. Selecting collaborative team members appears to be particularly important for
the teams because the team members and the manager will work together almost
constantly for the duration of the business project.
Analysis and Conclusion
Even though the issues in management are tackled in its complexity, it is no doubt that
corporate social responsibility, staff retention and Knowledge management and team
building play a great role in developing today’s business world. They may either contribute
to efficiency, effectiveness, success or failure. What is important is that we are becoming
more aware each day. No doubt that in this era, social responsibility should become every
business’ obligation.

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ORGANIZATION AND MANAGEMENT1

ORGANIZATION AND MANAGEMENT3

ORGANIZATION AND MANAGEMENT6

The tendency to organize or cooperate in interdependent relationships is inherent in man’s nature.

ORGANIZATION AND MANAGEMENT (PA 218) Page 1

Although organization implies integration and coordination of individual or sub-group activities,

ORGANIZATION AND MANAGEMENT (PA 218) Page 2

ORGANIZATION AND MANAGEMENT (PA 218) Page 3

MANAGEMENT – theprocess of planning, organizing, leading, and controlling the work of

ORGANIZATION THEORY AND DESIGN9

ORGANIZATION AND MANAGEMENT (PA 218) Page 4

ORGANIZATION THEORY AND DESIGN10

1. Bring together resources to achieve desired goals and outcomes

ORGANIZATION AND MANAGEMENT (PA 218) Page 5

WHY STUDY MANAGEMENT THEORY?

THE EVOLUTION OF MANAGEMENT THEORY

Approaches to early management theory:

The scientific management school

Frederick W. Taylor (1856-1915) rested his philosophy on four basic principles:

ORGANIZATION AND MANAGEMENT (PA 218) Page 6

Classical organization theory school

ORGANIZATION AND MANAGEMENT (PA 218) Page 7

ORGANIZATION AND MANAGEMENT (PA 218) Page 8

ORGANIZATION AND MANAGEMENT (PA 218) Page 9

An organization is a pattern of relationships – many interwoven, simultaneous relationships –

To keep track of the complex web of formal relationships in an organization, managers

ORGANIZATION AND MANAGEMENT (PA 218) Page 10

Coordination is the process of integrating the activities of separate departments in order

Organizational design is the decision-making process by which managers choose an organizational

The Classical Approach

ORGANIZATION AND MANAGEMENT (PA 218) Page 11

The Task-Technology Approach

1) Unit and small-batch production

Unit production refers to the production of individual items tailored to a customer’s

2) Large-batch and mass production

Large-batch and mass production refer to the manufacture of large quantities of

ORGANIZATION AND MANAGEMENT (PA 218) Page 12

The Environmental Approach

In a stable environment, each organization member is likely to continue performing the

ORGANIZATION AND MANAGEMENT (PA 218) Page 13

Types of Organizational Structures

Organization by function brings together in one department everyone engaged in one

Product or market organization, often referred to as organization by division, brings together

A product/market organization can follow one of three patterns.

Division by geography is generally used by service, financial, and other nonmanufacturing

ORGANIZATION AND MANAGEMENT (PA 218) Page 14

The matrix structure, sometimes referred to as a “multiple command system,” is a hybrid

ORGANIZATION AND MANAGEMENT (PA 218) Page 15

The embryonic stage of a companies organizational process is the group of activities

The implementation phase of organizations processes is the integration of the companies

ORGANIZATION AND MANAGEMENT (PA 218) Page 16

Change management is evolving as the business landscape changes in response to changing

ORGANIZATION AND MANAGEMENT (PA 218) Page 17

Types of Planned Change14

Changing an organization’s structure involves rearranging its internal systems, such

Classical organizational design focuses on carefully dfining job

One approach to decentralization involves creating smaller, self-contained

ORGANIZATION AND MANAGEMENT (PA 218) Page 18

Changing an organization’s technology involves altering its equipment, engineering

Both the technical and structural approaches try to improve organizational

A MODEL OF THE CHANGE PROCESS

ORGANIZATION AND MANAGEMENT (PA 218) Page 19