MGMT 4/18

Chapter 15: Communication and Control

What is Communication

  • process by which information is exchanged and understood by 2 or more people, usually with the intent to motivate or influence behavior
  • Manager: 80% every working day in direct communication with others
  • Manager: 20% every work day in communication in the form of reading and writing (12 minutes/hour
  • it is a two way street

Communication Process Model

  • Sender: encodes message (trying to communicate/convey with email, phone, face-to-face, radio, internet)
  • Receiver: decodes message (gets and tries to interpret information)
  • Channel: return the message encoded
  • Communication noise: communication barriers (the telephone game)
  • Feedback Loop: the receiver responds to the sender by creating a return message; with feedback, communication is two ways

Channel Richness: the amount of information that is transmitted during a communication episode (pyramid on ppt)(from top to bottom

  • Face-to-face talk: fast feedback, body language
  • telephone
  • email, IM, intranet
  • memos, letters
  • formal reports, bulletins: slow feedback

formal Channels of Communication (3 channels)

  • Upward Communication: problems and exceptions; suggestions for improvement; performance reports; grievances and disputes; financial and accounting information
  • (Horizontal) Coordination: Intradepartmental problem solving; interdepartmental coordination, change initiatives and improvements
  • Downward Communication: implementation of goals & strategies; job instructions/rationale; procedures & practices; performance feedback; indoctrination(look up)

Organizational Control Focus

  • Feedforward Control
  • Concurrent Control
  • Feedback Control
  • Organizational control is monitoring progress in order to attain a goal (definition)

Feedforward Control

  • Focus is on: human resources, material resources, and financial resources
  • Purpose: identify and prevent deviations
  • Sometimes called preliminary or preventative control
  • ex. pre-employment drug testing, inspect raw materials, hire only college graduates
  • Focuses on inputs

Concurrent Control

  • Monitors ongoing activities to ensure consistency with performance standards
  • Assesses current work activities (evaluate performance)
  • relies on performance standards (formulate and maintain standards)
  • includes rules and regulations (managers must communicate the regulations)
  • ex. adaptive culture, employee self-control, total quality management
  • is focused on ongoing processes

Feedback Control

  • Focus: organization’s outputs (products)
  • sometimes called post action control or output control
  • after the problem occurs
  • ex. performance evaluation, survey customers, final quality inspection
  • focus is on output

Feedback control Model Four steps

  1. Establish standards of standards
  2. measure actual performance
  3. compare performance to standards
  4. if adequate: do nothing or provide reinforcement; if inadequate: take corrective action (adjust standards or performance)
  5. get the rest of the ppt chart

Chapters for TEST: 1, 3, 5, 10, 14, 15


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Micro 4/17


  • one seller
  • many buyers
  • barriers to entry (source of monopoly power)
  • no close substitutes (electricity) (other source of monopoly power)
  • firms are price setters (price searchers)

Price Discrimination

  • Three Requirements:
  • monopoly power
  • segment the market (hair cuts for women)
  • no arbitrage (buying something and selling at a higher price)

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Micro 4/12

Perfect Competition: when Shift changes

  • Start with Firm MC=ATC (breaking even)
  • Demand increases in Short Run: D up, P up, Q up, q up, Profit up (causes supply to increase cause other people will enter to get profits)
  • Demand increases in Long Run: P down to Pe, Q up, q down to qe, profit = 0
  • Demand decrease in Short Run: P down, Q down, q down, profit negative (causes supply to decrease cause no one likes to lose money)
  • Demand decreases in Long Run: P up to Pe, Q down, q up, profit = 0

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MGMT 4/11

Chapter 14 Continued

Path-Goal Theory

  • leaders can increase subordinate satisfaction and performance by clarifying and clearing the paths to goals and by increasing the number and kinds of rewards available for goal attainment

4 leadership styles in Path-Goal

  • supportive: friendly and approachable
  • Directive: clarifying expectations and deadlines
  • Achievement-Oriented: setting challenging goals
  • Participative: allowing input on decisions

Leading Change

  • Transactional Leadership
  • Transformational Leadership (better in leading changes)

Transactional Leadership

  • Clarify the role and task requirements of subordinates
  • initiate structure
  • provide appropriate rewards
  • display consideration for subordinates

Transformational Leadership

  • Generates awareness and acceptance of group’s purpose and mission
  • get followers to accomplish more than they intended or thought possible

Leadership at McDonalds and P.F. Changs

  • Where does the leadership at McDonald’s fall on the Leadership Grid?
  • Describe some of Rick Federico’s personal traits:
  • Would you characterize Rick as transactional or transformational leader?

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MGMT 4/9

Chapter 14: Leadership

The Nature of Leadership

  1. Occurs among people
  2. involves the use of influence (direct behavior)
  3. is used to attain goals
  4. the ability to influence people to attain goals

Leadership Traits Theory

  • Traits: early efforts to understand leadership success focuses on leader’s personal characteristics
  • Great Man Approach: early research focused on leaders who had achieved a level of greatness
  • Steps to Great Man Approach: find out what made them great & find people with the same traits

Leadership Traits

  1. Drive: achievement, success, motivation
  2. Desire to Lead: desire to motivate others
  3. Honesty & Integrity: must be honest, otherwise they cannot be trusted
  4. Self-Confidence: must believe in their own abilities
  5. Emotional Stability: remain calm
  6. Cognitive ability: problem solving
  7. Knowledge of business: knowledge of business trends; how they make key decisions

Behavioral Approaches: Ohio State Studies 4 leadership styles

  • Consideration: people-oriented behavior; mindful of subordinates; establishes mutual trust (classified both by high and low)
  • Initiating Structure: task-oriented behavior; directs subordinate work activities toward goal attainment; typically gives instructions, spends time planning, and emphasizes deadlines (classified in high and low)
  • When both are high, that is the most efficient outcome

Behavioral Approaches: Michigan Studies

  • University of Michigan compared the behavior of effective and ineffective supervisors
  • Employee centered leaders: high concern about employees; help employees to solve problems; motivate employees; more effective
  • Job-Centered Leaders: focus on job productivity; give clear job instructions; human relations not important

Behavioral Approaches: Leadership Grid (University of Texas)

  • Builds on the work of Ohio State and Michigan studies
  • Two-dimensional leadership theory that measures the leader’s concern for people and for production
  • people + production (similar to other 2 studies)
  • 9 point scale (low to high)
  • Five leadership styles/li>;;;

The five leadership Styles in Leadership Grid

  1. Authority-Compliance: efficiency in operation results from arranging conditions of work in such a way that human elements interfere to a minimum degree (9,1) on graph
  2. Country Club Management: Thoughtful attention to the needs of people for satisfying relationships leads to a comfortable, friendly organization atmosphere and work tempo (1,9) on graph
  3. Middle-of-the-Road Management: Adequate organization performance is possible through balancing the necessity to get out work with maintaining morale of people at a satisfactory level
  4. Team Management: work accomplishment is from committed people; interdependence through a “common stake” in organization purpose leads to relationships of trust and respect
  5. Impoverished Management: Exertion of minimum effort to get required work done is appropriate to sustain organization

Contingency Approaches

  • Relationship between leadership styles and situations (3 theories)

Situational theory (contingency)

  • focus on employees (because the employees carry out the leader’s effectiveness)
  • Two Dimensions: task behavior and relationship behavior
  • 4 styles: delegating (low relation, low behavior), telling (low r, high b), participating (high r, low b), selling (high r, high b)
  • follower readiness: the degree to which people are willing and able to follow directions
  • get graph from ppt

Contingency theory (2nd contingency theory)

  • leaders need to know whether they have a relationship- or task-oriented style
  • leaders should diagnose the situation and determine the favorableness of the following three areas: leader-member relations, Task structure, Leader position power
  • Task-oriented leaders are more effective when the situation os either highly favorable or highly unfavorable
  • Relationship-oriented leaders are more effective in situations of moderate favorability
  • cannot change persons leadership style… must change situation or replace the leader

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Micro 4/3

read local food inefficiency article for quiz (quiz only over the article) / get homework


Profit sharing is a way firms attempt to control shirking (true)
There are no fixed costs in the long run (true)
Economies of Scale occur when per unit costs rise as output rises (false: lowers)
If the demand for tobacco is highly inelastic, then the burden of a tax on tobacco production would be born almost entirely by consumers (true)
The law of diminishing marginal utility states that as consumption increases the marginal utility of consumption increases (false: decreases)
The elasticity of demand remains constant along a linear demand curve, while the slope changes along a linear demand curve (false)
Implementing an excise tax in a market with a highly elastic demand curve would cause a smaller than average deadweight loss (true)
The goal of every rational individual is to maximize utility subject to their income and the prices they face (true)
If the cross price elasticity of supply between two goods is 1.1, then these two products are compliments in production (true)

In order to maximize profits firms set: Marginal revenue equal to Marginal Cost
Which of the following is typically defined as a variable input? Labor
Laura has a marginal utility of 5 for shirts and a marginal utility of 25 for guns. The price of a shirt is $10 and the price of a gun is $100. What does Laura need to do to maximize her utility? Increase her consumption of shirts
Which of the following is not a shift factor for a firm’s cost curves? Demand (its on the curve)
If the income elasticity (Yd) of a good is 0.8 then the good is a(n): Necessity
Which of the following is a form of taxation that follows the ability-to-pay principle of taxation? United States Income tax
A significant increase in equilibrium price with virtually no change in equilibrium quantity would most likely be caused by a market with: a highly inelastic demand curve in which supply has just fallen
Suppose a firm, interested in raising revenues, comes to you for economic advice. You calculate the price elasticity of demand for a good is 0.3. What advice would you give this firm? “Increase prices to raise revenues since your customers are not likely to change their buying habits”

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MGMT 4/2

Chapter 13

2nd process motivation theory: Expectancy Theory

  • Valence: value of outcomes (promotions)(high valance, high opportunities)(HOPE)
  • E to P expectancy: probability that effort will lead to desired performance (Effort to Performance)
  • P to O expectancy: probability that performance will produce desired outcome (Performance to Outcomes [pay recognition, other rewards])
  • Motivation = Valence * EtoP * PtoO

Reinforcement theory: tools used

  1. Positive reinforcement: desirable consequence strengthens behavior (praise for a job well done)(pay raise)(management support, and social reinforcement)
  2. Avoidance learning (negative reinforcement): withholding unpleasant consequence strengthens behavior (stop yelling at employee, and they will work better)
  3. Punishment: unpleasant consequence weakens behavior (scolding, write ups, suspension)
  4. Extinction: no consequence weakens behavior (removal of a pleasant consequence)

Job Design for Motivation

  • Job design: application of motivational theories to the structure of work for improving productivity and satisfaction (3 types)
  • Job simplification: reduce the number of tasks a single person must do (one person to a task is good job simplification)
  • Job Rotation: move employees from one job to another (performing more tasks)(popular in production teams)
  • Job enlargement: combine a series of tasks into one new, broader job (response to too simplified jobs)(increases job satisfaction)

Job characteristics Model

  • Core job dimensions
  • Critical Psychological states
  • Personal and Work Outcomes

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