Appunti di General Management

SECOND MID-TERM

The Personality Factor- Article

Specific personality variables can affect the strategic decisions of CEOs and

other TMT members.

-Various variables include all the personality variables that are not considered in

more than one article (i.e. narcissism, openness, responsibility, self-control)

-Locus of control: individuals with an external LOC believe that the events in their

lives are caused mostly by uncontrolled forces, while individuals with an internal

LOC trust in their capacity to influence and

control events through their personal efforts and skills.

-Need for Achievement: personal accomplishments through own effort

-Myers-Briggs Type Indicator: personality theory comprising 4 dichotomies:

extraversion-introversion, sensation (look at data with 5 senses)-intuition,

thinking-feeling->the way we approach problems and make decisions, judgment

(not caring about people’s opinion)-perception (value people opinion)

-Risk attitude: individual’s propensity toward risk, as opposed to risk aversion.

-Flexibility reflects imaginativeness, curiosity, originality, broad mindedness.

FFM(5factormodel) framework comprises five core personality dimensions

-Extraversion: being sociable, active, and ambitious. Includes “risk attitude”..

-Emotional stability: calm and tempered

-Agreeableness: courteous, flexible, trusting, tolerant

-Conscientiousness: careful, responsible and organized.

-Openness to experience: imaginative, cultured, curious, original. Includes

flexibility.

We consider the management outcomes as external if they generally concern

decision making processes that directly associate firms with their environmental

context internal outcomes include personality-based decisions which regard

different intra-firm processes.

Clusters of Observation

-Cluster I: Focuses on the correlation between CEO personality traits and external

outcomes like firm performance and strategic pro-activity. Traits like emotional

stability and openness to experience are linked to better performance and

proactive strategies.

-Cluster II: Investigates how CEO personalities impact internal outcomes within

firms, including CEO performance and firm structure. Personality traits such as

conscientiousness are associated with

effective leadership, while emotional stability is linked to aspects of

organizational structure

-Cluster III: Examines the relationship between TMT (Top Management Team)

personalities and external outcomes like firm performance and strategic pro-

activity. Findings suggest that TMT personality traits influence innovation,

cooperation, and overall competitiveness.

-Cluster IV: Explores how TMT personalities affect internal outcomes such as TMT

performance and management style. Different personality traits within TMT

members influence leadership

effectiveness, decision-making speed, and organizational cohesion.

Scholars have recently introduced innovative variables like narcissism, core self-

evaluation, hubris, and affective traits into the exploration of TMT (Top

Management Team) personality-based decision-making

.

-Heterogeneity in Literature: There is prevalent heterogeneity in personality

variables, instruments, and management outcomes within the empirical

literature, posing challenges for quantitative synthesis and suggesting a need for

further theoretical and methodological improvements.

-Need for Further Research: Despite some promising findings, there's a call for

more research to better understand how TMT personality affects decision-

making, suggesting potential avenues for future research, including longitudinal

analyses, convergence on personality frameworks like the Big Five, and cross-

disciplinary fertilization between management and psychology.

-Conceptual and Methodological Ǫuestions: Several questions for future research

are raised, such as the role of socio-demographic features, intra-TMT

interactions, and the external environment in moderating personality-based

decision-making.

“The Nature of Organizing, Entreprenuring, and Reengineering”

An organizational role can exist if there are verifiable objectives, a clear idea of

the major activities involved, and an area of authority so that the person filling

the role knows what to do to accomplish goals.

Organizing:

1identification and classification of required activities

2grouping of activities necessary for attaining objectives

3assignment of each group to a manager with the authority to supervise

4the provision for coordination horizontally and vertically in the organization

structure

Organization is a formalized intentional structure of roles or positions.

Formal organization is an intentional structure of roles in a formally organized

enterprise.

The Informal organization is a network of interpersonal relationships that arise

when people associate with each other.

A department is a distinct area, division, or branch of an organization over which

a manager has authority for the performance of specified activities.

Organizational levels exist because there is a limit to the number of persons a

manager can supervise effectively.

Problems with organizational levels are:

-the costs of managers

-difficult communication

-difficulties in planning and controlling as a plan loses clarity and coordination as

it is subdivided at lower levels.

The principle of the span of management states that there is a limit to the

number of subordinates a manager can effectively supervise, but the exact

number will depend on the impact of underlying factors. The guideline is to look

for the causes of limited span in individual situations rather than to assume that

there is a widely applicable numerical limit. The determinant factor for an

effective span is a manager’s ability to reduce the time he has to spend with

subordinates.

-Narrow span ( a lot of time spent with subordinates because of inadequate

training, authority delegation, communication…)

-Wide span (little time spent with subordinates because of effective training,

communication, and delegation)

Distinction between:

-Intrapreneur: a person who focuses on innovation and creativity, and who

transforms an idea into a profitable venture bio within an established

organizational environment.

-Entrepreneur: a person who builds an organization to take advantage of a

market opportunity

Ways to create a good environment for entrepreneurship:

-Management creates incentives for innovative and entrepreneurial behavior

-Failure in entrepreneurial efforts must be accepted

-Clearly defined and sustainable process of soliciting ideas for new products and

services must be promulgated

-Time and resources must be devoted to allow for creative and innovative

activities by employees

-Senior management must be evaluated in part by innovations coming from their

departments

-Corporate goals should include expectations of new revenues and profits from

innovations that are the developed.

Innovation comes from the following situations:

• An unexpected event, failure, or success;

• An incongruity between what is assumed and what really is

• A process or task that needs improvement

• Changes in the market/industry structure

• Changes in demographics

• Changes in meaning or in the way things are perceived

• Newly acquired knowledge

Chain model between 3 departments: Production (Launch the product as soon as

possible), Market (Let's analyze what the customer needs or what they are going

to need), R&D (research and development, needs to find the innovative product

to sell). Thanks to this model we have the Innovation process of the organization.

Nevertheless these 3 departments must communicate with each other,

otherwise the process of innovation will not happen.

Re-engineering

Micheal Hammer and James Champy define it as “ the fundamental rethinking

and radical redesign of business processes to achieve dramatic improvements in

critical contemporary measures of performance, such as cost, quality, service,

and speed.

Key aspects of re-engineering:

1)systems and procedures were often inefficient

2)radical redesign which means downsizing or rightsizing

3)dramatic result which means dramatic improvements (customers that had to

deal with many departments, they now have to deal with just one person)

4)processes the process analysis include analysis and integration of technical

systems, human systems, and the total management process, including linkage

of the enterprise to an external environment.

Re-engineering can be a powerful tool, but it’s suggested to integrate it with

other systems through a new systems model called management by processes.

The structure and process of organising

The structure must reflect objectives and plans because activities derive from

them. It must reflect the authority (the right to exercise discretion) available to

enterprise’s management. It has also to reflect its environment by not being

static and adjusting to make goals easier to achieve.

The grouping of activities and the authority relationships of an organization

structure must take into account people’s limitations, and customs.

Steps of organizing

1)establishing enterprise objectives.

2)formulating supporting objectives, policies and plans

3)identifying, analyzing, and classifying the activities necessary to accomplish

these objectives.

4)grouping these activities in light of the human and material resources available

and the best way, under the circumstances, of using them.

5)delegating to the head of each group the authority necessary to perform the

activities.

6)tying the groups horizontally and vertically through authority relationships and

information flows.

Chapter 15 “Leadership”

Leadership is defined as influence -the art or process of influencing people so

that they will strive willingly and enthusiastically toward the achievement of

group goals. People should work with zeal (ardor, earnestness, intensity) and

confidence (reflects experience and technical ability)

Leaders place themselves before the group as they facilitate progress and inspire

the group to accomplish organizational goals.

Ingredients of Leadership

1)the ability to use power effectively and in a responsible manner

2)the ability to comprehend that human beings have different motivating forces

at different times and in different situations

3)the ability to inspire

4)the ability to act in a manner that will develop a climate conducive to

responding to and arousing motivations

.

Managers also have to design and maintain an environment for performance and

develop a healthy relationship with their boss.

Principle of Leadership: since people tend to follow those who offer them a

means of satisfying their personal goals, the more managers understand what

motivates their subordinates and the more they reflect this understanding in

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