MNG2601 EXAM STUDY NOTES UNITS 1-9
LEARNING UNIT 1 FEATURES OF CONTEMPORARY ORGANISATIONS AND NEW
MANAGEMENT CHALLENGES
VARIABLES INFLUENCING CONTEMPORAR6Y ORGANISATIONS TO CHANGE / THE SIX STIMULI TO
CHANGE
1. Globalisation and the global economy
2. Technological advances
3. Radical transformation of the world of work
4. Increased power and demands of the customer
5. The growing importance of intellectual capital and learning
6. New roles for and expectations of workers
1. GLOBALISATION AND THE GLOBAL ECONOMY: DEF globalisation refers to the worldwide
integration of markets, and cultures, the removal of legal and political barriers to trade, the
death of distance as a factor limiting material and cultural exchange.
Global organization is consequence of following forces
Cheaper international transportation and communications
Copy and apply new product / process technologies due to highly educated workforce.
Intensifies
competitiveness
Markets more homogeneous
Different cost structures per country – organisations can “shop around” for lower cost
locations.
Cross-border learning expands organisations’ capabilities
Financial markets trade 24 hours per day across the world
Global standards, regulations, finance products have emerged
2. TECHNOLOGICAL ADVANCES
Advances in technology have dramatically changed the world of work and will continue to do so in
the future. Modern mangers need to appreciate and understand the power of technology and must
be able to use it in the best interest of the organisation where they work.
3. RADICAL TRANSFORMATION OF THE WORLD OF WORK
Orgs have moved from focusing on reducing defects and streamlining business processes to focusing
on managing continuous and radical change. The biggest difference between the old work and new
is the pressure to do it better, faster and cheaper.
4. INCREASED POWER AND DEMANDS OF THE CUSTOMER:
New communications, transportation and information technology allow customers to compare
prices, quality, availability and so forth between local organisations and orgs abroad.
Customers are now able to choose the products and services they want according to the criteria they
set in the terms of the following
Cost – the most economical choice
Quality – best quality , meeting and exceeding the customers’ expectations
Time – available as soon as possible
,MNG2601 EXAM STUDY NOTES UNITS 1-9
Service –best service possible
Innovation- something new , not yet envisioned by e consumer
Customisation – tailored to the specific needs of the consumer.
5. THE GROWING IMPORTANCE OF INTELLECTUAL CAPITAL AND LEARNING
The key factors of production have changed dramatically in the recent past-intellectual capital has
become the critical resource for the org today. Fewer people are doing physical work and more are
doing knowledge based work
Def intellectual capital: is the sum and synergy of the knowledge, relationships, experience,
discoveries, processes, innovations, market presence and influence of an org on the community
Three Major Categories of Intellectual Capital
Structural capital – the accumulated knowledge and expertise of the org, represented by its
copyrights, trademarks and patents, systems, and proprietary databases.
Customer capital – the value of establishing relationships with supplier and customers
Human capital – the combined skills and knowledge of the employees of the company
Knowledge management is an integrated, systematic approach to identifying, managing and sharing
the information assets of an org.
6. NEW ROLES AND EXPECTATIONS OF WORKERS
Industrial Era Knowledge Era
Reparative skills Knowledge to deal with the unexpected
Depending on memory and facts Being spontaneous and creative
Risk avoidance Risk taking
Focusing on politics and procedures Collaborating with people
An interesting aspect of knowledge workers is that they own the means of production meaning if
they leave the org, they take the knowledge with them.
The actual jobs that works perform are in a permanent state of flux. so workers need to
update their knowledge and skills continually to stay on top of new job requirements
Work groups are also increasingly in a state of flux. Temp work groups replaced perm work
groups
Orgs themselves are in a state of flux-they continually reorganise their various divisions,
downsizing, and unbundling, outsourcing and replacing perms with temp works.
THE CLASSIC MODEL OF THE FORMAL ORGANISATION
The ‘‘old’’ organisation features the characteristics of Weber’s Bureaucracy. He developed
this organisation model at the turn of the nineteenth century. Table 1.1 lists the strengths
and weaknesses of the bureaucracy. According to Weber’s model, organisations should
subscribe to several desirable characteristics, such as:
Division of labour
Hierarchy of authority
Rules and procedures
Impersonality
Employee selection and promotion
STRENGTHS WEAKNESSES
Predictability Rigid rules and red tape
,MNG2601 EXAM STUDY NOTES UNITS 1-9
Resilience The protection of authority
Impartiality Slow decision-making
Expertise through specialisation Incompatibility with changing technology
THE NEW ORGANISATIONAL MODEL
DIFFERENCES BETWEEN TRADITIONAL AND NEW ORGANISATIONS
Dimensions Old New
Critical tasks Physical Mental (knowledge)
Relationships Hierarchical Lateral
Information flow Vertical Horizontal and vertical
Decision-making Top-down Where information resides
Systems and processes Inflexible Flexible
Levels Many (tall structure) Few (flat structure)
Boundaries Fixed Permeable
Competitive thrust Vertical integration Networked
Management style Autocratic Participative
Culture Compliance Commitment and results
Mindset Ethnocentric Global
Workforce Homogeneous Diverse
Strategic focus Efficiency Innovation
FEATURES OF THE NEW ORG
1. GLOBAL , the new org is effective at operating in an increasingly global economy
2. NETWORKED , there is interdependency between individuals groups and sub-units
3. FLATTER AND LEANER, the trend in recent years has been to remove several layers of
management, resulting in much flatter org. by employing fewer people (becoming leaner)
and by improving turnover in sales orgs can improve productivity.
4. FLEXIBILITY; flexibility is a new feature of the new org because orgs need to respond to
changes in their environment , changing customer needs, intense completion and the needs
of a diverse workforce.
5. WORKFORCE DIVERSITY : is a term that describes the fact that orgs are becoming more
heterogeneous in terms of gender , race and ethnicity
Feature Management challenge
Global Develop and use global strategic skills to manage change
and transition
Manage cultural diversity
Design and function in flexible org structures
Work with others in teams
Communicate effectively
Learn and transfer knowledge in an org.
Networked , Individuals managers must develop their skills as team
internal , externally members and team leaders
Team structures and processes must be developed for
each kind of team in the org.
Networks with outside orgs involve forming alliances with
customers , suppliers and competitors and an org must
, MNG2601 EXAM STUDY NOTES UNITS 1-9
develop systems to manage information with the orgs
with which it forms alliances
Flat and lean Managers must develop negotiating skills
The org must provide alternatives incentive systems and
new concepts of career planning that involve more
horizontal then vertical movement
More frequent and effective communication between
senior and junior management
Flexible Multitasking
Flexible labour practices
Diverse Managers will need to shift their philosophy from treating
everyone alike to recognising differences and responding
to those differences in ways that will ensure employee
retention and greater productivity
Training in diversity
Developing listening skills
LEARNING UNIT 2 MANAGING ORGANISATIONAL CHANGE
FORCES OF CHANGE
INTERNAL FORCES OF CHANGE
1. CHANGES IN STRATEGY – A Change in the strategic direction of an organisation would
inadvertently cause changes in any or all of the following areas : structure , culture , the
balance of power or the technology used
2. POOR PERFORMANCE: poor performance results may trigger change in organisation.
3. Pressure to grow : the pressure to from stakeholders could force orgs to initiate change
efforts in order to stimulate growth
4. WORKFORCE PROBLEMS : problems within the workforce may prompt an organisation to
change
5. IMPLEMENTATION OF NEW TECHNOLOGY : the availability of new technology may force the
org to change in order to remain competitive
6. CHANGES TO TOP MANAGEMENT : changes in the top management of organisations often
lead to change within the org because a new CEO or a new management team often ring in
the changes soon after taking office
7. POWER AND POLITICS : pressure to change may develop from power sources and political
struggles within the org
8. LACK OF INNOVATION: innovation is about the commercial exploitation and application of
ideas, services and inventions. Lack of innovation may lead to stagnation and will become a
force or the org to change
EXTERNAL FORCES OF CHANGE
MARKET ENVIRONMENT – changes in the needs and behaviours of consumers, the offering of
competitors or the changes in the availability of key suppliers may force the org to change its
products or services to meet the demand of the market
Consumers
Competitors
LEARNING UNIT 1 FEATURES OF CONTEMPORARY ORGANISATIONS AND NEW
MANAGEMENT CHALLENGES
VARIABLES INFLUENCING CONTEMPORAR6Y ORGANISATIONS TO CHANGE / THE SIX STIMULI TO
CHANGE
1. Globalisation and the global economy
2. Technological advances
3. Radical transformation of the world of work
4. Increased power and demands of the customer
5. The growing importance of intellectual capital and learning
6. New roles for and expectations of workers
1. GLOBALISATION AND THE GLOBAL ECONOMY: DEF globalisation refers to the worldwide
integration of markets, and cultures, the removal of legal and political barriers to trade, the
death of distance as a factor limiting material and cultural exchange.
Global organization is consequence of following forces
Cheaper international transportation and communications
Copy and apply new product / process technologies due to highly educated workforce.
Intensifies
competitiveness
Markets more homogeneous
Different cost structures per country – organisations can “shop around” for lower cost
locations.
Cross-border learning expands organisations’ capabilities
Financial markets trade 24 hours per day across the world
Global standards, regulations, finance products have emerged
2. TECHNOLOGICAL ADVANCES
Advances in technology have dramatically changed the world of work and will continue to do so in
the future. Modern mangers need to appreciate and understand the power of technology and must
be able to use it in the best interest of the organisation where they work.
3. RADICAL TRANSFORMATION OF THE WORLD OF WORK
Orgs have moved from focusing on reducing defects and streamlining business processes to focusing
on managing continuous and radical change. The biggest difference between the old work and new
is the pressure to do it better, faster and cheaper.
4. INCREASED POWER AND DEMANDS OF THE CUSTOMER:
New communications, transportation and information technology allow customers to compare
prices, quality, availability and so forth between local organisations and orgs abroad.
Customers are now able to choose the products and services they want according to the criteria they
set in the terms of the following
Cost – the most economical choice
Quality – best quality , meeting and exceeding the customers’ expectations
Time – available as soon as possible
,MNG2601 EXAM STUDY NOTES UNITS 1-9
Service –best service possible
Innovation- something new , not yet envisioned by e consumer
Customisation – tailored to the specific needs of the consumer.
5. THE GROWING IMPORTANCE OF INTELLECTUAL CAPITAL AND LEARNING
The key factors of production have changed dramatically in the recent past-intellectual capital has
become the critical resource for the org today. Fewer people are doing physical work and more are
doing knowledge based work
Def intellectual capital: is the sum and synergy of the knowledge, relationships, experience,
discoveries, processes, innovations, market presence and influence of an org on the community
Three Major Categories of Intellectual Capital
Structural capital – the accumulated knowledge and expertise of the org, represented by its
copyrights, trademarks and patents, systems, and proprietary databases.
Customer capital – the value of establishing relationships with supplier and customers
Human capital – the combined skills and knowledge of the employees of the company
Knowledge management is an integrated, systematic approach to identifying, managing and sharing
the information assets of an org.
6. NEW ROLES AND EXPECTATIONS OF WORKERS
Industrial Era Knowledge Era
Reparative skills Knowledge to deal with the unexpected
Depending on memory and facts Being spontaneous and creative
Risk avoidance Risk taking
Focusing on politics and procedures Collaborating with people
An interesting aspect of knowledge workers is that they own the means of production meaning if
they leave the org, they take the knowledge with them.
The actual jobs that works perform are in a permanent state of flux. so workers need to
update their knowledge and skills continually to stay on top of new job requirements
Work groups are also increasingly in a state of flux. Temp work groups replaced perm work
groups
Orgs themselves are in a state of flux-they continually reorganise their various divisions,
downsizing, and unbundling, outsourcing and replacing perms with temp works.
THE CLASSIC MODEL OF THE FORMAL ORGANISATION
The ‘‘old’’ organisation features the characteristics of Weber’s Bureaucracy. He developed
this organisation model at the turn of the nineteenth century. Table 1.1 lists the strengths
and weaknesses of the bureaucracy. According to Weber’s model, organisations should
subscribe to several desirable characteristics, such as:
Division of labour
Hierarchy of authority
Rules and procedures
Impersonality
Employee selection and promotion
STRENGTHS WEAKNESSES
Predictability Rigid rules and red tape
,MNG2601 EXAM STUDY NOTES UNITS 1-9
Resilience The protection of authority
Impartiality Slow decision-making
Expertise through specialisation Incompatibility with changing technology
THE NEW ORGANISATIONAL MODEL
DIFFERENCES BETWEEN TRADITIONAL AND NEW ORGANISATIONS
Dimensions Old New
Critical tasks Physical Mental (knowledge)
Relationships Hierarchical Lateral
Information flow Vertical Horizontal and vertical
Decision-making Top-down Where information resides
Systems and processes Inflexible Flexible
Levels Many (tall structure) Few (flat structure)
Boundaries Fixed Permeable
Competitive thrust Vertical integration Networked
Management style Autocratic Participative
Culture Compliance Commitment and results
Mindset Ethnocentric Global
Workforce Homogeneous Diverse
Strategic focus Efficiency Innovation
FEATURES OF THE NEW ORG
1. GLOBAL , the new org is effective at operating in an increasingly global economy
2. NETWORKED , there is interdependency between individuals groups and sub-units
3. FLATTER AND LEANER, the trend in recent years has been to remove several layers of
management, resulting in much flatter org. by employing fewer people (becoming leaner)
and by improving turnover in sales orgs can improve productivity.
4. FLEXIBILITY; flexibility is a new feature of the new org because orgs need to respond to
changes in their environment , changing customer needs, intense completion and the needs
of a diverse workforce.
5. WORKFORCE DIVERSITY : is a term that describes the fact that orgs are becoming more
heterogeneous in terms of gender , race and ethnicity
Feature Management challenge
Global Develop and use global strategic skills to manage change
and transition
Manage cultural diversity
Design and function in flexible org structures
Work with others in teams
Communicate effectively
Learn and transfer knowledge in an org.
Networked , Individuals managers must develop their skills as team
internal , externally members and team leaders
Team structures and processes must be developed for
each kind of team in the org.
Networks with outside orgs involve forming alliances with
customers , suppliers and competitors and an org must
, MNG2601 EXAM STUDY NOTES UNITS 1-9
develop systems to manage information with the orgs
with which it forms alliances
Flat and lean Managers must develop negotiating skills
The org must provide alternatives incentive systems and
new concepts of career planning that involve more
horizontal then vertical movement
More frequent and effective communication between
senior and junior management
Flexible Multitasking
Flexible labour practices
Diverse Managers will need to shift their philosophy from treating
everyone alike to recognising differences and responding
to those differences in ways that will ensure employee
retention and greater productivity
Training in diversity
Developing listening skills
LEARNING UNIT 2 MANAGING ORGANISATIONAL CHANGE
FORCES OF CHANGE
INTERNAL FORCES OF CHANGE
1. CHANGES IN STRATEGY – A Change in the strategic direction of an organisation would
inadvertently cause changes in any or all of the following areas : structure , culture , the
balance of power or the technology used
2. POOR PERFORMANCE: poor performance results may trigger change in organisation.
3. Pressure to grow : the pressure to from stakeholders could force orgs to initiate change
efforts in order to stimulate growth
4. WORKFORCE PROBLEMS : problems within the workforce may prompt an organisation to
change
5. IMPLEMENTATION OF NEW TECHNOLOGY : the availability of new technology may force the
org to change in order to remain competitive
6. CHANGES TO TOP MANAGEMENT : changes in the top management of organisations often
lead to change within the org because a new CEO or a new management team often ring in
the changes soon after taking office
7. POWER AND POLITICS : pressure to change may develop from power sources and political
struggles within the org
8. LACK OF INNOVATION: innovation is about the commercial exploitation and application of
ideas, services and inventions. Lack of innovation may lead to stagnation and will become a
force or the org to change
EXTERNAL FORCES OF CHANGE
MARKET ENVIRONMENT – changes in the needs and behaviours of consumers, the offering of
competitors or the changes in the availability of key suppliers may force the org to change its
products or services to meet the demand of the market
Consumers
Competitors
