Monday, November 27, 2006

management accounting - ch1

management accounting
Chapter 1

Users of accounting information fall into two general categories:
1.internal managers -- use the information for day-to-day operating decisions and for long-range statistic decisions
2.external parties -- use the information for making decisions about the company such as investors and government authorities

Management accounting -- the branch of accounting that produces information for managers within an organization. It is the process of identifying, measuring, accumulating, analyzing, preparing, interpreting, and communicating information that helps managers for fill organizational objectives.
Financial accounting -- the branch of accounting that develops information for external decision-makers such as stockholders, suppliers, banks, and government regulatory agencies.
Score keeping -- the accumulation and classification of data
attention directing -- reporting and interpreting information that helps managers to focus on operating problems, imperfections, inefficiencies, and opportunities
problem-solving -- the aspect of accounting that often involves a special study to assess possible courses of action and recommends the best course to follow
Accounting system -- a formal mechanism for gathering, organizing, and communicating information about an organization's activities
generally accepted accounting principles (GAAP) -- a set of standards to which public companies published financial statements must adhere
Foreign Corrupt Practices Act -- a US law for bidding bribery and other corrupt practices. The law also requires all public companies to maintain their accounting records in reasonable detail and accuracy and have an appropriate system of internal controls
internal controls -- policies to protect and make the most efficient use of an organization's assets
management audits -- a review to determine whether managers are implementing the policies and procedures specified by top management
Sarbanes-Oxley Act -- a 2002 law that requires more top management oversight of a company's accounting policies and procedures
cost benefit balance -- weighing estimated costs against probable benefits, the primary consideration in choosing among accounting systems and methods
behavioral implications -- the accounting systems affect on the behavior, specifically the decisions of managers
decision-making -- the purposeful choice from among a set of alternative courses of action designed to achieve some objective
There are two basic types of decisions with an organization:
1.planning decisions
2.control decisions
Planning -- setting objectives for an organization and outlining how it will attain them
controlling -- implementing plans and using feedback to attain objectives
budget -- a quantitative expression of a plan of action and an aide to coordinating and implementing the plan
performance reports -- feedback provided by comparing results with plans and by highlighting variances
variances -- deviations from plans
Management by exception -- concentrating on areas that deviate from the plan and ignoring areas that are presumed to be running smoothly
Product lifecycle -- the various stages through which a product passes, from conception and development to introduction into the market to maturation and, finally, withdrawal from the market
value chain -- the set of business functions or activities that add value to the products or services of the organization

common value chain:
research and development
-- the generation of, and experimentation with, ideas related to new products, services, or processes
design of products, services, or processes -- the detailed design and engineering of products
production -- the coordination and assembly of resources to produce a product or delivery service
marketing -- the manner by which individuals or groups learn about the value in features of products and services
distribution -- the mechanism by which a company delivers products and services to the customer
customer service -- the support activities provided to the customer
support functions -- the support activities provided to other internal business functions such as management information systems, and accounting
Line managers -- managers who are directly involved with making and selling the organization's products or services
staff managers -- managers who are advisory to the line managers. They have no authority over line managers, but they help the line managers by providing information and advice
Chief financial Officer (CFO) -- a top executive who deals with all finance and accounting issues in an organization. The CFO generally oversees the accounting functions
Treasurer -- a manager who is concerned mainly with the company's financial matters such as raising and managing cash
controller (Comptroller) -- the top accounting officer of an organization who deals mainly with operating matters such as aiding management decision-making

Controllership:
planning for control
reporting and interpreting
evaluating and consulting
tax administration
government reporting
protection of assets
economic appraisal

Treasurership:
provision of capital
investor relations
short-term financing
banking and custody
credits and collections
investments
risk management (insurance)

Certified public accountant (CPA) -- in the United States, independent accountants who reassure the public about the reliability of companies published financial statements
chartered accountant (CA) -- the equivalent to a CPA in many countries
certified Management accountant (CMA) -- the Management accountants counterpart to the CPA
Institute of Management Accountants (IMA) -- the largest US professional organization of accountants focused on internal accounting. It oversees the CMA program.

CMA's must pass a four-part examination:
1.economics, finance, and management
2.financial accounting and reporting
3.management reporting, analysis, and behavioral issues
4.decision analysis and information systems

Electronic commerce (e-commerce) -- conducting business online
B2C -- electronic commerce from business to consumer
B2B -- electronic commerce from one business to another business
enterprise resource planning (ERP) systems -- integrated information systems that support all functional areas of a company
XBRL -- an XML-based accounting language that helps communicate financial information electronically
Business process reengineering -- the fundamental rethinking and radical redesign of business processes to improve performance in areas such as cost, quality, service, and speed
just in time (JIT) philosophy -- a philosophy to eliminate waste by reducing the time product spend in the production process and eliminating the time product spend on activities that do not add value
computer integrated manufacturing (CIM) systems -- systems that use computer aided design, computer aided manufacturing, robots, and computer-controlled machines
total quality Management (TQM) -- initiatives that minimize costs by maximizing quality
six Sigma -- a continuous process improvement effort designed to reduce costs by improving quality
Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management (developed by the IMA) -- codes of conduct develop by the Institute of Management Accountants; these codes include competence, confidentiality, integrity, and objectivity
code of conduct -- a document specifying the ethical standards of an organization

Summary
Major users and uses of accounting information.
Internal managers use accounting information for making short-term plan and control decisions, for making nonroutine decisions, and for formulating overall policies and long-range plans.
External users such as investors and regular tour's use published financial statements to make investment decisions, regulatory rulings, and many other decisions.
Managers use accounting information to answer score keeping, Attn: directing, and problem-solving questions.

Managerial accounting ethics.
Integrity is essential to accountants because they provide information that users must trust to be right. Users cannot directly assess the quality of accounting data, and if they cannot rely on accountants to produce unbiased information, the information will have little value to the user.

Cost-benefit and behavioral issues involved in designing and accounting system.
Companies design management accounting information systems for the benefit of managers. These systems should be judged by a cost-benefit criterion -- the benefits of better decisions should exceed the cost of the system. Behavioral factors -- how the system affects managers and their decisions -- greatly affect the benefit of a system.

The role of budgets and performance reports in planning and control.
Budgets and performance reports are essential tools for planning and control. Budgets result from the planning process. Managers use them to translate the organization's goals into action. A performance report compares actual results to the budget. Managers use these reports to monitor, evaluate, and reward performance and thus exercise control.

Accountants in the company's value chain.
Accountants play a key role in planning and control. Throughout the company's value chain, accountants gather and report cost and revenue information for decision-makers.

Controllers and treasurers.
Accountants are staff employees who provide information and advice for the line managers. The head of accounting is often called the controller. Unlike the treasurer, who is concerned mainly with financial matters such as raising capital and investing excess funds, the controller measures and reports on operating performance.

Accounting careers.
Accounting skills are useful in many functional areas of the organization. Management accountants often work with managers throughout the company and learn much from them. This exposure makes Management accountants prime candidates for promotions to operating and executive positions.

Management accounting trends.
Many factors have caused changes in accounting systems in recent years. Most significant are globalization, technology, and changed business processes. Without continuous adaptation and improvement, accounting systems will soon become obsolete.

Professional accountants code of ethical conduct.
Users of accounting information expect both external and internal accountants to adhere to high standards of ethical conduct. Many ethical dilemmas, however, require value judgments, not the simple application of standards.

Monday, October 23, 2006

statistics chapter 3 & 4

Statistics -- Chapter 3

summarizing data

Perimeter -- a descriptive measure of a population

statistic -- a descriptive measure of a sample

arithmetic mean -- a variable is computed by determining the sum of all the values of the variable in the data set, divided by the number of observations.

Population arithmetic mean (called a mew) -- is computed using all the individuals in a population. The population mean is a perimeter

sample arithmetic mean (called x-bar) -- is computed using sample data. The sample mean is a statistic

median -- this variable is the value that lies in the middle of the data when a range in ascending order. Half the data are below the median and half the data are above the median. We use M. to represent the median

mode -- a variable is the most frequent observation of the variable that occurs in the data said

bimodal -- the data set has two modes

compute the range of the variable from raw data

the simplest measure of dispersion is the range. To compute the range, the data must be quantitative.

The range, R, of a variable is the difference between the largest data value and the smallest data value.

Range = R = largest data value - smallest data value

Population variance -- the population variance of a veritable is the sum of the squared deviations about the population mean divided by the number of observations in the population

computational formula -- determines the population variance

bias -- overestimate and underestimates in a perimeter

weighted mean -- the weight did mean of the variable is found by multiplying each value of the variable by its corresponding weight, summing these products, and dividing the result by the sum of the weights

Z. score -- represents the distance that a data value is from the mean in terms of the number of standard deviations. It is obtained by subtracting the mean from the data value and dividing this result by the standard deviation

Summary

Measures of central tendency are used to indicate the typical value and a distribution. The mean measures the center of gravity of the distribution. The median separates the bottom 50% of the data for the top 50%. Both measures require that the data be quantitative. The mode measures the most frequent observation. The data can be either quantitative or qualitative to compute the mode. The median is resistant to extreme values, while the mean is not. A comparison between the median and the mean can help determine the shape of the distribution.

Measures of dispersion described the spread in the data. The range is the difference between the highest and lowest data value. The variance measures the average square deviation about the mean. The standard deviation is the square root of the variance. The mean and standard deviation are used in many types of statistical interference.

The mean, median, and measured can be approximated from grouped data. The variance and standard deviation can also be approximated from grouped data.

We can determine the relative position of any observation and a data set using Z- scores and percentiles. Z- scores denote how many standard deviations on observations is from the mean. Percentiles determine the percent of observations that lie above and below observation. The upper and lower fences can be used to identify potential outliers. Any potential outlier must be investigated to determine whether it was the result of a data entry air or, some other error in the data collection process, or of an unusual value in the data set.

The interquartile range is also a measure of dispersion. The five number summary provides an idea about the center and spread of a data set, through the median and the interquartile range. The length of the tales in the distribution can be determined from the smallest and largest data values. The five number summary is used to construct box plots. Box plots can be used to describe the shape of the distribution.

Statistics -- Chapter 4

relations between variables

Response variable -- the variable whose value can be explained by the value of the explanatory or predictor variable

scatter diagram -- graph that shows the relationship between two quantitative variables measured on the same individual. Each individual in the data set is represented by a point in the scatter diagram. The explanatory variable is plotted on the horizontal axis and the response variable is plotted on the vertical axis. Do not connect the points when drawing a scatter diagram

least squares regression criterion -- the least squares regression line is the one that minimizes the sum of the squared errors (or residuals). It is the line that minimizes the square of the vertical distance between the observed values and those predicted by the line

coefficient of determination -- measures the percentage of total variation in the response variable that is explained by the least squares regression line

Summary

the first step in identifying the type of relation that might exist is to draw a scatter diagram. The explanatory variable is plotted on the horizontal axis and the corresponding response terrible on the vertical axis. The scatter diagram can be used to discover whether the relation between the explanatory and the response variables is linear. In addition, for linear relations, we can judge whether the linear relationship is positive or negative association.

A numerical measure for the strength of linear relation between two quantitative variables is the linear correlation coefficient. It is a number between -- 1 and 1, inclusive. Values of the correlation coefficient near -- 1 are indicative of a negative linear relation between the two variables. Values of the correlation coefficient near +1 indicate a positive linear relation between the two variables. If the correlation coefficient is near zero, then there is little linear relation between the two variables.

Once a linear relation between the two variables has been discovered, we describe the relation by finding the least squares regression line. This line best describes the linear relation between the explanatory and the response variables. We can use the least squares regression line to predict a value of the response terrible for a given value of the explanatory variable.

Whenever a least squares regression line is obtained, certain diagnostics must be performed. These include verifying that the residuals have constant variance, verifying that the linear model is appropriate, and checking for outliners and influential observations.

What I worth mentioning again is that a researcher should never claim causation between two variables in a study unless the data are experimental. Observational data allows us to say that two variables might be associated, but we cannot claim causation.

Wednesday, October 18, 2006

Statistics -- Chapter 2

organizing and summarizing data

Frequency distribution -- lists each category of data and the number of occurrences for each category of data
relative frequency -- the proportion (or percent) of observations in the category and is found using the formula = = relative frequency equals frequency divided by some of all frequencies
relative frequency distribution -- lists each category of data together with the relative frequency
bar graph -- constructed by labeling each category of data on a horizontal axis in the frequency or relative frequency of the category on the vertical axis. Rectangles of equal with are drawn for each category. The height of each rectangle is equal to the category's frequency or relative frequency
pareto chart -- a bar graph news bars are drawn in decreasing order of frequency or relative frequency
pie chart -- a circle divided into sectors. Each sector represents a category of data. The area of each sector is proportional to the frequency of the category
histogram -- constructed by trawling rectangles for each class of data. The height of each rectangle is the frequency or relative frequency of the class. The width of each rectangle is the same in the rectangles touch each other
classes -- categories of data created by using intervals of numbers
lower class limit -- smallest value within the class
upperclass limit -- largest value within the class
class width -- difference between consecutive lower class limits
open ended -- first class has no lower limit or the last classes not have an upperclass limit
stem and leaf plot -- another way to represent quantitative data graphically
dot plot -- drawn by placing each observation horizontally in increasing order and placing a dot above the observation each time it is observed
class midpoint -- found by adding consecutive lower class limits and dividing the result by two
frequency polygon -- drawn by plotting a point above each class midpoint on a horizontal axis at a height equal to the frequency of the class. After the points for each class are plotted, straight lines are drawn between consecutive points
cumulative frequency distribution -- displays the aggregate frequency of the category. For discrete data, it displays the total number of observations less than or equal to the category. For continuous data, it displays the total number of observations less than or equal to the upperclass limit of a class
cumulative relative frequency distribution -- displays the proportion (or percentage) of observations less than or equal to the category for discrete data and the proportion of observations less than or equal to the upper class limit for continuous data
ogive -- a graph that represents the cumulative frequency or cumulative relative frequency for the class. It is constructed by plotting points whose x- coordinates are the upperclass limits and whose y-coordinates are the cumulative frequencies or cumulative relative frequencies. After the points for each class are plotted, straight lines are drawn between consecutive points
time-series data -- value of the variable is measured a different point in time
time-series plot -- obtained by plotting the time in which a variable is measured on the horizontal axis and the corresponding value of the variable on the vertical axis. Lines are then drawn connecting points

Summary
raw data are first organized into tables. Data are organized by creating classes into which they fall. Qualitative data and discrete data have values that provide clear-cut categories of data. However, with continuous data the categories, called classes, must be created. Typically, the first table created is a frequency distribution, which lists the frequency with which each class of data occurs. Other types of distributions include the relative frequency distribution and the cumulative frequency distribution.

Once data are organized into the table, graphs are created. For data that are qualitative, we can create bar charts and pie charts. For data that are quantitative, we can create histograms, stem and leaf plots, frequency polygons, and ogives.

Tuesday, October 17, 2006

Statistics Chapter 1 -- data collection

Statistics -- the science of collecting, organizing, summarizing, and analyzing information to draw conclusions or answer questions
descriptive statistics -- consists of organizing and summarizing the information collected
inferential statistics -- methods that takes results obtained from a sample, extends them to the population, and measures the reliability of the result
qualitative or categorical variables -- allow for classification of individuals based on some attribute or characteristic
quantitative variables -- provide numerical measures of individuals. Arithmetic operations such as addition and subtraction can be performed on the values of a quantitative variable and will provide meaningful results
variables -- the characteristics of the individuals within the population
approach -- a way to look at and organize a problem so that it can be solved
discrete variable -- a quantitative variable that has either a finite number of possible values or a countable number of possible values. The term countable means that the values result from counting, such as 0, 1, 2, 3, and so on
continuous variable -- is a quantitative variable that has an infinite number of possible values that are not countable
Census -- a list of all individuals in a population along with certain characteristics of each individual
observational study -- measures the characteristics of the population by studying individuals in the sample, but does not attempt to manipulate or influence the variables of interest
designed experiment -- applies a treatment to individuals (referred to as experimental units or subjects) and attempts to isolate the effects of the treatment on a response variable
lurking variables -- characteristics that may be related to an outcome but not identified in the study
stratified sample -- obtained by separating the population into nonoverlapping groups called strata and then obtaining a simple random sample from each stratum. The individuals within each stratum should be homogeneous (or similar) in some way
systematic sample -- obtained by selecting every kth individual from the population. The first individuals selected corresponds to a random number between one and k
cluster sample -- obtained by selecting all individuals within a randomly selected collection or group of individuals
convenience sampling -- a sample in which the individuals are easily obtained
nonsampling errors -- errors is that result from the survey process. They are due to the nonresponse of individuals selected to be in the survey, to an accurate responses, too poorly worded questions, to bias in the selection of individuals to be given the survey, and so on
sampling error -- error that results from using sampling to estimate information regarding a population. This type of error occurs because a sample gives incomplete information about the population
designed experiment -- a controlled study conducted to determine the effect that varying one or more explanatory variables house on a response variable. The explanatory variables are often called factors. The response Venerable represents the veritable of interest. Control, manipulation, randomization, and replication by the key ingredients of a well designed experiment
treatment -- any combination of the values of each factor
experimental unit/subject -- person, object, or some other well defined item to which a treatment is applied
double-blind -- neither the experimental unit nor the experimenter knows what treatment is being administered to the experimental unit
placebo -- innocuous medication with no medicinal value
completely randomized design -- 1 in which each experimental unit is randomly assigned to a treatment
matched pairs design -- an experimental design in which the experimental units are paired up. The pairs are matched up so that they are somehow related. There are only two levels of treatment in a matched pair design
block -- each group of homogeneous individuals
blocking -- grouping similar homogeneous experimental units together and then randomizing the experimental units within each group to a treatment
confounding -- occurs when the effect of two factors on the response variable cannot be distinguished
randomized block design -- used when the experimental units are divided into homogeneous groups called blocks. Within each block, the experimental units are randomly assigned to treatments


Summary
we defined statistics of the science in which data are collected, organized, summarized, and analyzed to and for characteristics regarding a population. Descriptive statistics consists of organizing and summarizing information, while inferential statistics consists of drawing conclusions about population based on results obtained from a sample. The population is a collection of individuals on which the study is made, and the sample is a subset of the population.

Data are the observations of a variable. Data can either be qualitative or quantitative. Quantitative data are either discrete or continuous.

Data can be obtained from four sources: a census, existing sources, survey sampling, or a designed experiment. A census will list all of the individuals in the population, along with certain characteristics. Do to the costs of obtaining a census, most researchers opts for obtaining a sample. In observational studies, the veritable of interest has already been established. For this reason, they are often referred to as ex post facto studies. Designed experiments are used when control of the individuals in the study is desired to isolate the affect of a certain treatment on the response variable.

Five sampling methods:
simple random sampling
stratified sampling
systematic sampling
cluster sampling
convenience sampling

Convenience sampling typically leads to an on representative sample and biased results.

Sunday, October 01, 2006

Unit 4 - summary

Organization Structure

An organization’s structure is how it organizes itself to communicate, develop workflow, and outline the hierarchy of authority, which is often referred to as ”chain of command”. The chain of command is often depicted in an organization chart. There are a variety of organization structures, namely, simple, functional, divisional, matrix, and conglomerate. Whatever the structure, organizations adopt a structure to gets things done through others in an effective way to achieve corporate goals. It’s important that an organization chose the best structure for to accomplish their goal. In the case of Xerox Corporation, Xerox initially selected a matrix structure, but found it cumbersome to achieve its goals. Today, Xerox is structured into four strategic business units.

Communication

Communication is key to effecting change within an organization and promoting excellence in achieving its organizational goals. It encourages and motivates employees to perform well for the good of the organization. Organizations face challenges today that affect achieving those goals—new communication technologies, a diverse workforce, and a global marketplace. How well an organization overcomes these challenges will determine its business success. The success depends upon the effectiveness of communications from all persons within the organization—from the chief executive officer down to the employee on the shipping dock. This is illustrated below.




Organizational Structures

Environmental forces and technological factors influence an organization’s structure. It is a complex system that is also influenced by the organization’s strategic choices. There are a variety of structures that are adopted due to their unique strengths and weaknesses, although the traditional organization is structured by functions, products, or geographies. Managers need to think about adopting structures that address the complex business strategies that today’s global market entails, including e-business organizational structures.



Organizational Environment

Organizations cannot survive or grow without interacting with their environmental surroundings. The environment provides resources or raw materials to organizations, and receives output in return. Environments can be very different—unpredictable, highly diverse, and unstable. Organizations must cope with rapidly-changing markets and technologies. If an organization’s environment is uncertain, then it must be flexible and have the ability to adapt to changing markets or other environmental factors very quickly. For example, when the computer was introduced for business use, many firms quickly developed departments responsible for managing information services. To prevent environmental turbulence from impacting an organization’s core business, organizations develop buffer departments to deal with these interferences, such as Corporate Communications or Legal departments.


Organizational Technology

The business world has become a smaller place with the advent of organizational technology. Why? Technology is used to communicate with employees, to service clients or customers, and to disseminate training to employees and customers more rapidly and anywhere in the world. Organizational technology adds value creation—it increases an organization’s Return on Investment, although organizations currently communicate with employees and customers. Organizations become more flexible and responsive. Organizational technology:

Improves process—system efficiencies are developed versus improving individual efficiencies
Allows more customer intimacy, meaning there are more opportunities for cross selling, managing customer databases, and specific customers can be targeted for marketing purposes
Maximizes technology for developing new ideas

Organizational behavior chapter 17

Organizational culture -- the set of shared values, beliefs, and norms that influences the way employees think, feel, and behave toward each other and toward people outside the organization values -- general criteria, standards, or guiding principles that people used to determine which types of behaviors, events, situations, and outcomes are desirable or undesirable
terminal value -- a desired end, State, or outcome that people seek to achieve
instrumental value -- a desired mood or type of behavior that people seek to follow
organizational ethics -- the moral values, beliefs, and rules that establish the appropriate way for an organization and its members to deal with each other and with people outside the organization
whistleblowing -- when an employee decides to inform an outside person or agency about illegal or unethical managerial behavior

Summary
Organizational culture is an important means through which organizations corny and motivate the behavior of their members. An organization can shape work attitudes and behaviors by the way it invests in and rewards employees overtime and by its attempts to encourage values of excellence.

Organizational culture is the set of shared values, beliefs, and norms that influences the way employees think, feel, and behave toward each other and toward people outside the organization.

There are two kinds of organizational values: terminal (a desired outcome) and instrumental (a desired mode of behavior). Ideally, instrumental values help the organization to achieve its terminal values.

Culture is transmitted to an organization's members by means of socialization and training programs and stories, ceremonies, and language used by members of the organization.

Organizational culture develops from the interaction of four factors:
the personal and professional characteristics of people within the organization
organizational ethics
the nature of the employment relationship between a company and its employees
and the design of its organizational structure.
These factors work together to produce different cultures and different organizations and caused changes in culture over time.

Different organizations have different kinds of cultures because they attract, select, and retained different kinds of people. Because of the organization's founder is instrumental in initially determining what kind of people get selected, a founder can have a long-lasting effect on an organization's culture.

Ethics are the moral values, beliefs, and rolls that establish the right or appropriate ways in which one person or group should interact in deal with another person or group. Organizational ethics are a product of societal, professional, and individual ethics.

The nature of the employment relationship between the Company and its employees causes the development of particular norms, values, and attitudes toward the organization.

Different organizational structures give rise to different patterns of interaction among people. These different patterns lead to the formation of different organizational cultures.

Adaptive cultures are those whose values and norms help an organization to build momentum and to grow and change as needed to achieve its goals and be effective. In our cultures are those that lead to values and norms that fail to motivate or inspire employees; they lead to stagnation and often failure over time.

Another important determinant of organizational culture is the values of the nation in which a company is founded and has its home operations.

A company can help to build and sustain an ethical culture by establishing the right kinds of incentives and rules for rewarding ethical behavior, by establishing a strong board of directors, and by making sure employees follow the legal rules and guidelines established by government agencies and watched by consumer groups.

Organizational behavior chapter 16

Organizational structure -- the formal system of task and reporting relationships that controls, coordinates, and motivates employees so that they cooperate and work together to achieve an organization's goals
organizational design -- the process by which managers select and manage various dimensions and components of organizational structure and culture so that an organization can achieve its goals
contingency theory -- organizational structure should be designed to match the set of contingencies -- factors or conditions -- that cause an organization the most uncertainty
technology -- a combination of skills, knowledge, tools, machines, computers, and equipment used in the design, production, and distribution of goods and services
small batch technology -- a method used to produce small quantities of customized, one-of-a-kind products based on the skills of people who work together in small groups
Mass production technology -- a method of production using automated machines that are programmed to perform the same operations time and time again
continuous process technology -- a method of production involving the use of automated machines working in sequence and controlled through computers from a central monitoring station
organic structure -- an organizational structure designed to promote flexibility so that employees can initiate change and adapt quickly to changing conditions
machanistic structure -- an organizational structure designed to induce employees to behave in predictable, accountable ways
function -- a set of people who perform the same types of tasks err hold similar positions in an organization
functional structure -- an organizational structure that groups together people who hold similar positions, perform a similar set of tasks, or use the same kinds of skills
division -- a group of functions created to allow an organization to produce and dispose of its goods and services to customers
product structure -- a divisional organizational structure that groups functions by types of product so that each division contains the functions it needs to service the products it produces
market structure -- a divisional organizational structure that groups functions by types of customers so that each division contains the functions it needs to service a specific segment of the market
geographic structure -- a divisional organizational structure that groups functions by region said that each division contains the functions it needs to service customers and a specific geographic area
corporate management -- the set of managers whose responsibility is to supervise and oversee the divisional managers
matrix structure -- an organizational structure that simultaneously groups people by function and by product team
Authority -- the power that enables one person to hold another person accountable for his or her actions
hierarchy of authority -- an organization's chain of command that defines the relative authority of each level of management
span of control -- the number of employees who report to a manager
mutual adjustment -- the ongoing informal communication among different people and functions that is necessary for an organization to achieve its goals
integrating mechanisms -- organizing tools used to increase communication and coordination among functions and divisions
standardization -- the development of routine responses to reoccurring problems or opportunities
formalization -- they use of rules and standard operating procedures to control an organization's activities
virtual organization -- a company that operates largely using new information technology in which people in functions are linked through company intranets and databases
network structure -- a structural arrangement whereby companies outsource one or more of their functional activities to other specialist companies

Summary
Organizational structure affects how people and groups behave in an organization by providing a framework that shapes employee attitudes and behavior. Organizations need to create a structure that allows them to corny and motivate people, functions, and divisions affectedly.

Organizational structure is the formal system of task and job reporting relationships that determines how employees use resources to achieve organizational goals. Organizational design is the process of making the specific choices about tasks and job relationships that result in the construction of a particular organizational structure.

Contingency theory argues that an organization structure needs to be designed to fit or match the set of contingencies (factors or conditions) been affected the most and cause it the most uncertainty.
Three important contingency factors are:
  • the organizational environment
  • advances in technology
  • organization human resources
The greater the level of uncertainty in the environment, the more complex its technology, and the more highly skilled its workforce, the more likely are managers to design an organic structure, one that is flexible and can change quickly. The more stable the environment, the less complex its technology, and the less skilled its workforce, the more likely an organization is to have a mechanistic structure, one that is formal, controlling, and designed to induce employees to behave in predictable, accountable ways.

The main structures the organizations used to differentiate their activities and to group people into functions or divisions are functional, product, market, geographic, and matrix structures. Each of these is suited to a particular purpose and has specific coronation and motivation advantages and disadvantages associated with it.

As organizations grow, problems of coordinating activities between functions and divisions arise.
Three methods organizations can use to solve coronation problems are:
  • use the hierarchy of authority
  • mutual adjustment
  • and standardization.
To coordinate their activities, organizations develop a hierarchy of authority and decide how to allocate decision-making responsibility. Two important choices that they must make our how many levels to have in the hierarchy and how much authority to decentralize to managers throughout the hierarchy and how much to retain the top.

To coordinate their activities, organizations develop mechanisms for promoting mutual adjustment (the ongoing informal communication and interaction among people and functions). Mechanisms that facilitate mutual adjustment included: direct contact, liaison roles, teams and task forces, and cross functional teams.

Organizations that use standardization to coordinate their cavities developed programmed responses and written roles that specify how people in functions are to coordinate their actions to accomplish organizational objectives. Organizations can standardize their input, throughput, and output activities.

Organizational behavior chapter 15

Decision making -- the process by which members of an organization choose a specific course of action to respond to both opportunities and problems
non-programmed decision-making -- decision making in response to novel opportunities and problems
programmed decision-making -- decision making in response to recurring opportunities and problems
performance program -- a standard sequence of behaviors the organizational members followed routinely whenever they encounter a particular type of problem or opportunity
classical decision making model -- a prescriptive approach based on the assumptions that the decision maker has all the necessary information and will choose the best possible solution or response
administrative decision-making model -- a descriptive approach stressing that incomplete information, psychological and social illogical processes, and a decision makers cognitive abilities affect decision-making and that decision makers often to satisfactory, not optimal, solutions
satisficing -- searching for and choosing an acceptable response or solution, not necessarily the best possible one
bounded rationality -- an ability to reason that is constrained by the limitations of the human mind itself
heuristics -- rules of thumb that simplify decision-making
availability heuristic -- the rule of thumb that says an event that is easy to remember is likely to have occurred more frequently than an event that is difficult to remember
representativeness heuristic -- the role of thumb that says similar kinds of events that happened in the past are a good predictor of the likelihood of an upcoming event
base rate -- the actual frequency with which an event occurs
anchoring and adjustment heuristic -- the rule of thumb that says that decisions about how big or small an amount (such as the salary, budget, or level of costs) should be/can be made by making adjustments from some initial amount
escalation of commitment -- the tendency to invest additional time, money, or effort into what were essentially bad decisions or unproductive courses of action
sunk costs -- costs that cannot be reversed and will not be affected by subsequent decision-making
groupthink -- a pattern of faulty decision-making that occurs in cohesive groups whose members strive for agreement at the expense of accurately assessing information relevant to the decision
Devils Advocate -- someone who argues against a cause or position in order to determine its validity
brainstorming -- a spontaneous, participated decision-making technique that groups use to generate a wide range of alternatives from which to make a decision
production blocking -- loss of productivity in brainstorming groups due to various distractions and limitations inherent to brainstorming
nominal group technique (NGT) -- a decision-making technique that includes the following steps: group members generate ideas on their own and write them down, group members communicate their ideas to the rest of the group, and each idea is then discussed and critically evaluated by the group
Delphi technique -- a decision-making technique in which a series of questioning errors is sent to experts on the issue at hand, who never actually meet face-to-face
benchmarking -- selecting a high performance group and using this group as a model
empowerment -- the process of giving employees throughout organization the authority to make decisions and be responsible for their outcomes
organizational learning -- the process through which managers seek to increase organization members desire and ability to make decisions that continuously raise organizational of fish and sea and effectiveness
exploration -- learning that involves organizational member searching for and experimenting with new kinds or forms of organizational behaviors and procedures to increase effectiveness
exploitation -- learning that involves organizational members finding ways to refine and improve existing organizational behaviors and procedures to increase effectiveness
learning organization -- an organization that purposefully take steps to enhance and maximize the potential for explorative and exploitative organizational learning to take place

Summary
The decisions made by employees at all levels and organizations can have major impact on levels of performance and well-being on the extent to which individuals, groups, and whole organizations achieve their goals.

The decision-making is the process by which members of an organization choose how to respond to opportunities and problems. Not programmed decision-making occurs when members of an organization choose how to respond to novel opportunities and problems. Not programmed decision-making involves a search for information. Programmed these fission making occurs when members of an organization respond to recurring opportunities and problems by using standard responses.

The classical model of decision-making is a prescriptive model that assumes that decision makers have access to all the information they need and will make the best decision possible.

A decision maker using the classical model takes these four steps:
  • listing all alternatives
  • listing the consequences of each alternative
  • considering his or her preference for each alternative or set of consequences
  • selecting the alternative that will result in the most preferred set of consequences.
Decisions made according to the classical model are optimal decisions.

There are problems with the classical model because it is not realistic. D. session makers often do not know all the alternatives they can choose from, often do not know the consequences of each alternative, may not be clear about their own preferences, and in many cases lack the mental ability to take into account all the information required by the classical model. Moreover, the classical model can be very time-consuming.

March and Simon's administrative decision-making model is descriptive; it explains how decisions are actually made in organizations. March and Simon propose that decision makers choose how to respond to opportunities and problems on the basis of a simplified and approximate account of the situation called the decision makers definition of the situation. This definition is the result of both psychological and sociological processes. Rather than making optimal decisions, decision makers often satifice, or make unacceptable decision, not necessarily an optimal decision. Satisficing occurs because of bounded rationality.

Heuristics are rules of thumb that simplify decision-making but can lead to errors or biases. The availability heuristic reflects the tendency to determine the frequency of an event and its causes by how easy they are to remember. The availability heuristic can lead to biased decision-making when the frequency of an event and causes is overestimated because they are vivid, extreme, or recent. The representativeness heuristic reflects the tendency to predict the likelihood of an event from the extent to which the event is typical of similar kinds of events that happened in the past.

Representativeness can lead to biased decision-making when decision-makers fail to take into account base rates. The anchoring and adjustment heuristic reflects the tendency to make decisions based on adjustments from some initial account. The anchoring and adjustment heuristic can lead to biased decision-making when the initial amounts were too high or too low.

Escalation of commitment is the tendency of decision-makers to invest additional time, money, or effort into losing courses of action. Escalation of commitment occurs because decision-makers do not want to admit that they have made a mistake, view further commitment of resources as a way to recoup sunk costs, and no more likely to take risks when decisions are framed in negative rather than positive terms.

The advantages of using groups instead of individuals to make decisions include the availability and diversity of members skills, knowledge, and expertise; enhanced memory for facts; capability of air or detection; and greater decision acceptance. The disadvantages of group decision-making include the time it takes to make a decision and the potential for groupthink. Other consequences include diffusion of responsibility, group polarization, and the potential for conflict.

Group decision-making techniques used in organizations include brainstorming, the nominal group technique, and the Delphi technique. Two group decision-making techniques used in total quality management are benchmarking and empowerment.

Two main types of organizational learning that can lead to improve decision-making all our explorative and exploitative learning. Organizations can improve their members ability to make high-quality decisions by encouraging them to develop personal mastery and complex mental models through team learning, by building a shared vision, and through systems thinking.

Saturday, September 30, 2006

Organizational Behavior Unit 3 Summery

Leadership and Groups


Nothing is accomplished in the work place without team or group interaction. To effectively manage group performance, a leader must understand these complicated human resource issues and how organizations behave over time. Leaders must also understand the implications of an organizational culture and how it can affect carrying out normal business processes. Group dynamics must be considered when forming work groups to accomplish a business goal.

Teams and Groups

Groups in the work environment can be formal and informal. Formal work groups are created to achieve organizational goals, and can be further classified into command group, informal work group, or a task force. An informal work group emerges naturally when individuals feel that a collective might further their own goals or meet their personal needs. A command group is a collection of subordinates who all report to the same supervisor; a task force consists of people assigned to a team to accomplish a particular goal.

Teams are formal work groups with a common goal and a high level of interaction among members of the team. An example would be a cross-functional team formed to solve a specific business issue within a set period of time. Teams take on a life of their own as a standing committee or a task group when they continue to function over an indefinite period of time. Self-managed work teams, which are used extensively in the automotive industry, are responsible for achieving goals, coordinating efforts, allocating tasks, and even disciplining team members’ poor performance. Virtual teams are connected only through electronic means and usually do not meet each other, so they require a special way of managing and motivating for group performance and goal achievement.

Social Loafing

Social loafing is the tendency of individuals to work less when in a group. This effect increases with group size. This phenomenon can be explained by the Social Impact Theory, which is based on the assumption that people do certain things because of social force, whether it is social pressure to win at a game or the pressure to give a good class presentation. When a group shares the pressure and responsibility, the impact is divided, and each team member is only faced with a portion of it. Social loafing can be reduced by making individual contributions identifiable, making group members feel they add value to the group, and keeping group size as small as possible.

Group Performance

Group performance can be affected by the size of the group, group function, group status, and the composition of the group. The quality of people's performance on the same task is often different when they work on it alone as compared to when they perform in front of others. Interestingly, the presence of others can either enhance or impair a person's performance. You do better with certain tasks when doing them in front of other people; other tasks, which you do perfectly well when practicing by yourself, can be difficult when other people are watching. Thompson’s model of task interdependence indicates that pooled task interdependence can enhance group performance, because the group is measured by the total outcome rather than individual performance. Finally, group cohesiveness will affect group performance.

Organizational Groups

The four kinds of work groups that can dramatically affect organizational performance are top-management teams, self-managed work teams, R&D teams, and virtual teams. Top-management teams, usually reporting to the CEO, require complex and intensive interaction with reciprocal task independence, and are susceptible to process losses. Keeping the team small assures members their contribution is important, and they can develop open/clear communications. Self-managed groups motivate team members to perform at a higher level and can increase job satisfaction. To be successful, certain conditions must be in place within the team and within the top-management team. Research and development teams create the future for a company, and can add value to the enterprise if appropriately managed. Virtual teams face the same challenges as regular work groups, but require less overhead to support them. Great care must be taken to avoid dissatisfaction and a lack of cohesiveness, however.

Leadership

Leadership is influencing others to achieve a common goal. It is more strategic than tactical as today’s leader must be more than a manager of people. Leadership effectiveness depends upon the leader’s style. There are many theories of leadership, but no one theory seems to answer why leaders are successful or not. Today’s successful leader will know their subordinates, have a clear vision, and have the ability to be flexible in his or her approach to leading staff.

Organizational behavior Chapter 14

Communication -- the sharing of information between two or more individuals or groups to reach a common understanding

communication network -- a set of pathways through which information flows within a group or organization

sender -- the individual, group, or organization that needs or wants to share information with some other individual, group, or organization

receiver -- the individual, group, or organization for which the information is intended

message -- the information that is sender needs or wants to share with other people

encoding -- translating a message into symbols or language that a receiver can understand

jargon -- specialized terminology or language that members of her group developed to aid communication among themselves

medium -- the pathway through which an encoded messages transmitted to a receiver

verbal communication -- the sharing of information by means of words, either spoken or written

nonverbal communication -- the sharing of information by means of facial expressions, body language, and modes of dress

decoding -- interpreting or trying to make sense of a sender's message

noise -- anything that interferes with the communication process

filtering -- a sender's withholding part of a message because the sender thinks the receiver does not need oral not one to receive the information

information distortion -- the change in meaning that occurs when a message travels through a series of different senders to a receiver

rumor -- unofficial information on topics that are important or interesting to an organization's members

Grapevine -- a set of informal communication pathways through which unofficial information flows

linguistic style -- a person's characteristic way of speaking

information richness -- the amount of information a medium of communication can carry and the extent to which it enables senders and receivers to reach a common understanding

intranet -- a companywide computer network

persuasive communication -- the attempt by one person or group to transmit and share information with another person or group to get the other to accept, agree with, follow, and seek to achieve the formers goals and objectives

devils advocate -- a person willing to stand up and question the beliefs of more powerful people that a planned course of action is flawed

Summary

Communication is one of the most important processes that takes place in organization. Effective communication allows individuals, groups, and organizations to achieve their goals and perform at a high level, it affects virtually every aspect of organizational behavior.

Communication is the sharing of information between two or more individuals or groups and an organization to reach a common understanding.

Communication serves four major functions and organizations:
  • providing knowledge
  • motivating organizational members
  • controlling and coordinating individual efforts
  • expressing feelings and emotions
Four types of workgroup communication networks are:
  • the wheel
  • the chain
  • the circle
  • the all channel network
As the level of task independence increases in a group, so too does the need for communication between group members. When a group's task is characterized by pooled interdependence, the wheel network is likely to be used. When a group's task is characterized by sequential interdependence, a chain network is likely to be used. When a group's task is characterized by reciprocal interdependence, a all channel network is likely to be used. An organization's actual communication network is seldom accurately depicted in its formal organization chart. Networks change as communication needs change within the organization or group.

The communication process entails a number of steps including the senders and coding of a message, selection of a medium, the coding of the message by the receiver, and completing the feedback loop. Jargon facilitates communication within the group and hinders communication outside group.

Filtering and information distortion, poor listening, lack of or inappropriate feedback, rumors, and cross-cultural differences in linguistic styles can all lead to an effective communication and organizations. Communication can be improved by establishing trust and encourage open communication, improving listening skills, developing good feedback skills, using company TVs to spread accurate information, and understanding cross-cultural differences in linguistic styles.

Communication media very in information richness. Face-to-face communication is the medium highest and information richness. It is followed by verbal communication electronically transmitted, personally addressed Britain communication, and in personal written communication. Other factors that affect the selection of a medium include how much of the senders and receivers time it takes and whether it leaves a paper or electronic trail.

Advances in information technology such as global computer networks such as the Internet generally tend to contribute most to the knowledge function of communication. Given the vast array of information currently available to organizational members, organizations have to be careful that their members are not overloaded with information. Using electronic communication to replace face-to-face communication and workgroups has certain disadvantages that tend to increase as the level of task interdependence between group members increases.

Persuasive communication is the use of information and messages to influence others to act in the way desired by the sender.

Organizational behavior Chapter 13

Power -- the ability of one person or group to cause another person or group to do something that they otherwise might not have done

Organizational politics -- activities in which managers engage to increase their power and to pursue goals that favor their individual and group interests

political decision-making -- decision-making characterized by active disagreement over which organizational goals to pursue and how to pursue them

coalition -- a group of managers who have similar interests and join forces to achieve their goals

formal individual power -- power that originates from a person's position in organization

legitimate power -- the power to control and use organizational resources to accomplish organizational goals

reward power -- the power to give pay raises, promotions, praise, interesting projects, and other rewards to subordinates

coercive power -- the power to give or withhold punishment

information power -- the power that stems from access to and control over information

informal individual power -- power that stems from personal characteristics such as personality, skills, and capabilities

expert power -- informal power that stems from superior ability or expertise

referent power -- informal power that stems from being liked, admired, and respected

charismatic power -- an intense form of referent power that stems from an individual's personality or physical or other abilities, which induce others to believe in and follow that person

organizational conflict -- the struggle that arises when the goal directed behavior of one person or group blocks the goal directed behavior of another person or group

third-party negotiator -- an outsider skilled in handling are getting in negotiations

mediator -- a neutral third party who tries to help parties in conflict reconcile their differences

arbiter -- a third party who has the authority to impose a solution to a dispute

Summary

Understanding and managing power, politics, conflict, and negotiation is an integral part of a manager's job. Organizations are composed of people who come together to achieve their common goals. When resources are scarce, people and groups have to compete for them, and some achieve their goals while others do not. In an organization managers have the primary responsibility to ensure that competition for resources is free and fair and that people who obtain power over resources do so because they possess skills and abilities that will, in the long run, benefit all members of the organization. Managers also have the responsibility to manage conflicts as they arise to ensure the long-term success of the organization and to maintain a balance of power to ensure that politics in conflict benefit rather than harm the organization.

Power is the ability of one person or group to cause another person or group to do something they otherwise might not have done. Managers engage in political activities to increase their power and to pursue goals that favor their individual and group interests. Power and politics can benefit or harm an organization.

Sources of formal individual power include legitimate power, reward power, coercive power, and information power. Sources up informal individual power include expert power, referent power, and charismatic power.

Sources of functional and divisional power include the ability to control on certain contingencies, you replace ability, centrality, and the ability to control and generate resources.

Managers can use many kinds of political tactics to increase their individual power. These tactics include making oneself irreplaceable and central, controlling contingencies and resources, recognizing who has power, controlling the agenda, bringing in an outside expert, and building coalitions and alliances. Managing politics to obtain positive effects requires a balance of power in organization and a strong CEO who has the ability to keep powerful people and groups in check.

Conflict is the struggle that arises when the goal directed behavior of one person or group blocks the goal directed behavior of another person or group. Whether conflict benefits or harms an organization depends on how it is managed.

The three main sources of conflict are differentiation, task relationships, and scarcity of resources. When conflict occurs, it typically moves through a series of stages. In Pondy's model of conflict, these stages are lantent conflict, perceived conflict, felt conflict, manifest conflict, and the conflict aftermath.

Negotiation and bargaining is an important means of managing and resolving conflict at both the individual and group level. The ability to negotiate an agreement is an important skill and manager needs to cultivate.

Organizational behavior chapter 12

Leadership — the exercise of influence by one member of a group or organization over other members to help the group or organization achieve its goals

leader – an individual who is able to influence group or organizational members to help the group or organization achieve its goals

formal leader — a member of an organization who is given authority by the organization to influence other organizational members to achieve organizational goals

informal leader — an organizational member with no formal authority to influence others to nevertheless is able to exert considerable influence because of special skills or talents

consideration — he hate your indicating that a leader trusts, respects, and values good relationships with his or her followers

initiating structure — behavior that a leader in cages in to make sure that work gets done and subordinates perform their jobs acceptably

leader reward behavior — a leader’s positive reinforcement of subordinates desired behavior

leader punishing behavior — a leader’s negative response to subordinates undesired behaviors

contingency theory of leadership — the theory that leader effectiveness is determined by both the personal characteristics of leaders and by the situations in which leaders find themselves

least preferred co-employee scale — a questionnaire that measures later style by scoring leader’s responses to questions about the coemployee with whom they have the most difficulty working

leader member relations — the relationship between a leader in his or her followers

task structure — the extent to which the work to be performed by a group is clearly defined

position power — the amount of formal authority a liter house

path-goal theory — a theory that describes how leaders can motivate their followers to achieve group and organizational goals and the kinds of behaviors leaders can engage in to motivate followers

Vroom and Yetton model — a model that describes the different ways in which leaders can make decisions and guides leaders in determining the extent to which subordinates should participate in decision-making

leader member exchange theory — a theory that describes the different kinds of relationships that may develop between a leader and a follower and what the leader in the follower give to and receive back from the relationship

leadership substitute — something that acts in place of a formal leader and makes leadership unnecessary

leadership neutralizer — something that prevents a leader from having any influence

transformational leadership — leadership that inspires followers to trust the leader, perform behaviors that contribute to the achievement of organizational goals, and perform high-level

charismatic leader — a self-confident, enthusiastic leader able to win followers respect and support for his or her vision of how good things could be

intellectual stimulation — behavior that a leader in cages and to make followers aware of problems in their groups and organization and to view these problems from a new perspective consistent with the leaders vision

developmental consideration — behavior that a leader engages in to provide support and encouragement to followers and give them opportunities to develop and grow on the job

transactional leadership — leadership that motivates followers by exchanging rewards for high performance and noticing and reprimanding subordinates for mistakes in substandard performance

Summary

Leaders at all levels and organization help individuals, groups, and the organization as a whole achieve their goals and can have profound effects and organizations.

Leadership is the exercise of influence by one member of a group or organization over other members to help the group or organization achieve its goals. Formal leaders how formal all 40 to influence others by virtue of their job responsibilities. Informal leaders lack formal authority but influence others by virtue of their special skills or talents.

The trait approach to leadership has found that good leaders tend to be intelligent, Dominick, self-confident, energetic, honest, mature, and knowledgeable and are able to withstand stress.

Possessing these traits, however, does not guarantee the leader will be effective, nor does the failure to have one or more of these traits mean that the leader will be ineffective.

A lot of the behaviors that leaders engage in fall into two main categories: consideration and initiating structure. Consideration includes all leadership behaviors that indicate that leaders trust, respect, and value a good relationship with their followers. Initiating structure includes all the behaviors that leaders engage in to help subordinates achieve their goals and perform high levels. Leaders also engage in reward in punishing behaviors.

Fiedler’s contingency theory proposes that leader effectiveness depends on both later style and situational characteristics. Leaders have either a relationship oriented style or a task oriented style. Situational characteristics, including leader-member relations, task structure, and position power, determine how favorable a situation is for leading. Relationship-oriented leaders are most effective in moderately favorable situations. Task oriented leaders are most effective and extremely favorable or unfavorable situations.

Leaders cannot easily change her style, so Fiedler recommends changing situations to fit the leader or signing leaders to situations in which they will be most effective.

Path-goal theory suggests that effective leaders motivate their followers by giving them out comes they desire when they perform at high level or achieve their work goals. Affective leaders also make sure their subordinates believe that they can obtain their work goals and perform high-level, show subordinates the path to goal attainment, remove obstacles that might come up along the way, and expressed confidence in their subordinates capabilities. Leaders need to adjust the type of behavior they engage in (directive, supportive, participated, or achievement oriented) to correspond to the nature of the subordinates they are dealing with and the type of work they’re doing.

The Vroom and Yetton model specifies the extent to which leaders should have their subordinates participate in decision-making. How much subordinates should participate depends on aspects of the decision that needs to be made, the subordinates involved, and the information needed to make a good decision.

Leader member exchange theory focuses on the leader- follower dyad and suggest that leaders do not treat each of their followers the same but rather develop different kinds of relationships with different subordinates. Some leader follower dyads have high-quality relationships. Subordinates in these dyad’s are members of the in group. Other leader follower dyad have low-quality relationships. Subordinates in these dyad’s form that outgroup.

Sometimes leadership does not seem to have much of an effect in organizations because of the existence of substitutes and neutralizers. A leadership substitute is something that acts in place of a formal leader. Substitutes make leadership unnecessary because they take the place of the influence of a leader. A leadership neutralize or is something that prevents a leader from having influence and negates a leader’s efforts. When neutralizers are present, there is a leadership void — the leader is having little or no of fact, and nothing else is taking the leaders place.

Transformational leaders increase their followers awareness of the importance of their jobs and the followers and needs for personal growth and Koppel Schmidt and motivate followers to work for the good of the organization. Leaders transform their followers by being charismatic, intellectually stimulating their followers, and engaging in developmental consideration. Transactional leadership occurs when leaders motivate their subordinates by exchanging rewards for high performance and reprimanding instances of low performance.

Leader mood at work and levels of emotional intelligence have the potential to influence the leader of effectiveness. Preliminary research suggests that when leaders tend to be in a good mood at work, their subordinates may perform a higher level and be less likely to resign.

Women and men do not appear to differ and the leadership behaviors (consideration and initiating structure) that they perform in organizations. Women, however, appear to be more democratic or participative than men as leaders.

Organizational behavior chapter 11

Potential performance — the highest level of performance that a group is capable of achieving at a given point in time

process losses — performance difficulties that a group experiences because of coronation and motivation problems

process gains — increases and potential performance that result from new ways of motivating in coordinating group members

social loafing — the tendency of individuals to exert less effort when they work in groups than when they were:

sucker effect — a condition in which some group members, not wishing to be considered suckers, reduce their own efforts when they see social loafing by other group members

task interdependence — the extent to which the work performed by one member of a group affects what other members do

pooled task independence — the task interdependence that results when each member of a group makes a separate and independent contribution to group performance

sequential task interdependence — the task interdependence that results when group members must perform specific behaviors in a predetermined order

reciprocal task interdependence — the task interdependence that results when the activities of all work group members are fully dependent on one another

synergy — a process gain that occurs when members of her group acting together are able to produce more or better output than would have been produced by the combined efforts of each person acting a line

group cohesiveness — the attractiveness of a group to its members

top management team — the team of managers who report to the chief executive officer and determine what an organization is trying to accomplish and develop plans for goal attainment

research and development team — a team that is formed to develop new products, maybe cross functional, and is often used in high-tech industries

skunk Works — an R&D team that is created to expedite new product design and promote innovation in an organization

virtual team — a team in which a significant amount of communication and interaction occurs a lot chronically rather than face-to-face

Summary

Group and organizational effectiveness hinge on minimizing process losses, achieving process gains, a winding group goals with organizational goals, and having the appropriate level of group cohesiveness. Four types of groups that especially important in many organizations include the top management team, self managed work teams, research and development teams, and virtual teams.

Actual group performance often fall short of potential performance because of process losses due to coronation a motivation problems in groups. Process gains cause the potential performance of a group to rise, and they enhance group effectiveness.

Social loafing, a motivation problem that leads to process losses, is the tendency of individuals to exert less effort when they worked in a group that if they were alone. Social loafing occurs for two reasons: individuals in a group think they will not receive positive outcomes for performing at high-level or negative outcomes for substandard performance because individual levels of performance cannot easily be identified and evaluated. And second, individuals think that their own efforts are unimportant or not really needed. Social loafing can be eliminated or reduced by making individual performance levels identifiable, making each individual feel that he or she can make an important and worthwhile contribution to the group, and by keeping group size small.

Group tasks can be characterized in terms of the nature of interdependence between group members. Thompson describes three types of task interdependence:pooled, sequential, and reciprocal. The nature and causes of process losses and process gains depends on the type of task involved and the degree of interdependence among group members.

Group cohesiveness is the attraction of a group to its members. Group size, the similarity/diversity of group members, competition with other groups, success, and exclusiveness of the group help to determine the level of group cohesiveness. Consequences of group cohesiveness are the level of participation in communication within a group, the level of conformity to group norms, and group goal a calm judgment. When group goals are aligned with organizational goals, there is an optimal level of group cohesiveness that results in high levels of performance. When group goals are not aligned with organizational goals, group cohesiveness is dysfunctional for organization.

Four kinds of work groups that have the potential to affect organizational performance dramatically our top management teams, self managed work teams, research and development teams, and virtual teams.

Organizational behavior chapter 10

Group -- a set of two or more people who interact with each other to achieve certain wells or to meet certain needs
group goal -- a goal that all or most members of her group can agree on as a common goal
formal workgroup -- a group established by management to help the organization achieve its goals
informal workgroup -- a group that emerges naturally when individuals perceive that membership in a group will help them achieve their goals are meet their needs
command group -- a formal workgroup consisting of subordinates who reports the same supervisor
task force -- a formal workgroup consisting of people come together to compost a specific goal
team -- a formal workgroup consisting of people who worked intensely together to achieve a common group goal
self managed work team -- a formal workgroup consisting of people who are jointly responsible for ensuring that the team accomplishes its goals and who lead themselves
friendship group -- a informal workgroup consisting of people who enjoy each other's company and socialize with each other on and off the job
interest group -- an informal workgroup consisting of people who come together because they have a common goal or objective related to their organizational membership
division of labor -- dividing of work and assigning particular task to specific workers
homogeneous group -- a group in which members have many characteristics in common
heterogeneous group -- a group in which members have few characteristics in common
group function -- the work that a group performance as its contribution to the accomplishment of organizational goals
group status -- the implicity agreed upon, perceived importance for the organization as a whole of what are group does
group efficacy -- the shared belief group members how about the ability of the group to achieve its goals and objectives
social facilitation -- the effects that the presence of others have on performance, enhancing the performance of easy tasks and impairing the performance of difficult tasks
role relationships -- the ways in which group and organizational members interact with one another to perform their specific roles
role making -- taking the initiative to create a role by assuming responsibilities that are not part of an assigned role
role taking -- performing the responsibilities that are required as part of an assigned role
group norms -- in formal rules of conduct or behaviors considered important by most group members
compliance -- ascending to a norm in order to attain rewards or avoid punishment
identification -- associating oneself with supporters of a norm and conforming to the norm because of those individuals do
internalization -- the leading that the behavior dictated by a norm is truly the right and proper way to behave
idiosyncrasy credit -- the freedom to violate group norms without being punished that is accorded to group members who have contributed a lot to the group in the past
deviance -- deviation from the norm
socialization -- the process by which newcomers learn the roles, rules, and norms of a group
role orientation -- the characteristic way in which members of her group respond to various situations
institutionalized role orientation -- a role orientation in which newcomers are taught to respond to situations in the same way that existing group members respond to similar situations
individualized role orientation -- a role orientation in which newcomers are taught that it is acceptable and desirable to be creative and to experiment with changing how the group does things

Summary
Workgroups are the basic building blocks of an organization. Workgroups use roles, rules, and norms to control their members behavior, and they use several socialization tactics to turn newcomers into effect of group members. Groups contribute to organizational effectiveness when group goals are aligned with organizational goals.

To a tribute separate workgroups from random collections of individuals and organization. Members of the workgroup interact with each other and perceive the potential for mutual goal accomplished that. Workgroups very and whether they are formal or informal. Formal workgroups include command groups, task forces, teams, and self managed work teams. In formal workgroups include friendship groups and interest groups. Teams are characterized by intense interactions between team members to achieve team goals.

Groups develop and change over time. The five stage model of group development proposes that groups develop in five sequential stages: forming, storming, norming, performing, and adjoining. Research, however, has not indicated that there is a universal set of stages that all groups experience in the same order.

Five important characteristics of groups are size, composition, function, status, and group efficacy. Each has the potential to affect the extent to which a group achieves its goals, performs a high level, and ultimately is effective in helping an organization attained its goals. Social facilitation is a characteristic affect that the presence of other group members has on individual performance such that having others present enhances performance of well-earned tasks and impairs performance of difficult tasks.

All groups, regardless of their type or characteristics, need to control their members behaviors to be effective and attain their goals. Rules and rules can be used to control behavior in groups.
A role is a set of behaviors recast that a person is expected to perform by virtue of holding a position in a group or organization. Roles have rights and responsibilities attached to them. Role relationships are the way in which groups and organizational members interact with each other to perform their specific roles. Group members are choir rolls through rulemaking and through role taking.

Written roles specify behaviors that are required of group members or that are for bin. They also specify how particular tasks should be performed.

Groups also control the members behavior by developing in enforcing group norms. Group norms are shared expectations for behavior within a group. There are three basis for conformity to group norms: compliance, identification, and internalization.

To accomplish goals and perform at high level, groups need both conformity to and deviance from norms. Whether group norms result in high levels of group performance depends on the extent to which group goals are consistent with organizational goals. To facilitate goal all linemen, group members should benefit or be rewarded when the group performs a high level and contributes to the achievement of organizational goals.

Group members learn roles, roles and norms through the process of socialization. Collective, formal, sequential, fixed, serial, and divestiture socialization tactics tend to lead to an institutionalized role orientation. Individual, informal, random, veritable, disjunctive, and investiture socialization tactics tend to lead to an individualized role orientation.