1. Chapter 2 Basic Schools of Management

2.  Definition of System: A system is a set of interrelated but separate parts working together towards a common purpose. Open Systems Closed Systems

3.  Open System: A system that takes in resources from its external environment and converts them into goods and services that are then sent back to the environment for purchase by customers. It continuously interacts with its environment.  Closed Systems: A system that is self-contained and thus not affected by changes occurring in its external environment. All system input and output is internal.

4.  The system approach to management views the organization as a unified, purposeful system composed from interrelated parts. It gives a manager the opportunity to view the organization as a whole and as part of the larger external environment.

6.  An organization is a unified and purposeful system consisting of several interconnected, interacting and interdependent parts.  The parts of the system are called sub-systems. Each sub-system influences the other sub-systems and the system as a whole.  The position and the function of each sub-system can be analyzed and understood only in relation to other sub-systems and the organization as whole.

7.  Each sub-system derives its strength by its association and interaction with other sub-systems. As a result the collective contribution of the organization is greater than the aggregate of individual contribution of its sub- systems. This is known as Synergy.  Each system has a boundary that separates it from its environment. The boundary determines which parts are internal to the organization and which are external.

8.  The reaction or response of the environment to the output is known as feedback. Feedback is useful in evaluating and improving the functioning of the system.  The organizations operate on the principle that they have several alternative ways of doing the same thing or achieving the same goal.

9.  The idea that the organizational structures and control systems managers choose depends on characteristics of the external environment in which the organization operates. The manager does not follow any single school of thought. Instead, he or she allows the situation to dictate managerial choices.

11.  The environment in which organizations operate, and in which managers have to manage, is ever-changing and complex. In order to stand any chance of being successful, managers have to be able to operate within the constraints and complexities present. Internal EnvironmentExternal Environment

12.  An organization's internal environment is composed of the elements within the organization, including current employees, management, and especially corporate culture, which defines employee behavior. Although some elements affect the organization as a whole, others affect only the manager.

13.  Organizational mission statements: An organization's mission statement describes what the organization stands for and why it exists. It explains the overall purpose of the organization and includes the attributes that distinguish it from other organizations of its type.  Company policies: Company policies are guidelines that govern how certain organizational situations are addressed. Just as colleges maintain policies about admittance, grade appeals, prerequisites etc.

14.  Formal Structures : The formal structure of an organization is the hierarchical arrangement of tasks and people. This structure determines how information flows within the organization, which departments are responsible for which activities, and where the decision-making power rests.  Organizational cultures: The organizational culture is an organization's personality. Just as each person has a distinct personality, so does each organization. The culture of an organization distinguishes it from others and shapes the actions of its members.

15.  Organizational climates: A byproduct of the company's culture is the organizational climate. The overall tone of the workplace and the morale of its workers are elements of daily climate. Worker attitudes dictate the positive or negative “atmosphere” of the workplace. The daily relationships and interactions of employees are indicative of an organization's climate.

16.  Resources: Resources are the people, information, facilities, infrastructure, machinery, equipment, supplies, and finances at an organization's disposal. People are the paramount resource of all organizations. Information, facilities, machinery equipment, materials, supplies, and finances are supporting, nonhuman resources that complement workers in their quests to accomplish the organization's mission statement. The availability of resources and the way that managers value the human and nonhuman resources impact the organization's environment.

17.  Managerial philosophies: Philosophy of management is the manager's set of personal beliefs and values about people and work and as such, is something that the manager can control.  Managerial leadership styles: The number of coworkers involved within a problem-solving or decision-making process reflects the manager's leadership style. Empowerment means delegating to subordinates decision-making authority, freedom, knowledge, autonomy, and skills.

18.  External Environment: All outside factors that may affect an organization make up the external environment. The external environment is divided into two parts: Directly Interactive Indirectly Interactive

19.  Directly interactive: This environment has an immediate and firsthand impact upon the organization. A new competitor entering the market is an example.  Indirectly interactive: This environment has a secondary and more distant effect upon the organization. New legislation taking effect may have a great impact. For example, complying with the Americans with Disabilities Act requires employers to update their facilities to accommodate those with disabilities.

21. Directly interactive forces include owners, customers, suppliers, competitors, employees, and employee unions. Management has a responsibility to each of these groups. Here are some examples:  Owners expect managers to watch over their interests and provide a return on investments.  Customers demand satisfaction with the products and services they purchase and use.

22.  The second type of external environment is the indirectly interactive forces. These forces include sociocultural, political and legal, technological, economic, and global influences. Indirectly interactive forces may impact one organization more than another simply because of the nature of a particular business. For example, a company that relies heavily on technology will be more affected by software updates than a company that uses just one computer.

23.  The sociocultural dimension is especially important because it determines the goods, services, and standards that society values. The sociocultural force includes the demographics and values of a particular customer base.  The political and legal dimensions of the external environment include regulatory parameters within which an organization must operate. Political parties create or influence laws, and business owners must abide by these laws.

24.  The technological dimension of the external environment impacts the scientific processes used in changing inputs (resources, labor, money) to outputs (goods and services). The success of many organizations depends on how well they identify and respond to external technological changes.  The economic dimension reflects worldwide financial conditions. Certain economic conditions of special concern to organizations include interest rates, inflation, unemployment rates, gross national product, and the value of the U.S. dollar against other currencies.

25.  The global dimension of the environment refers to factors in other countries that affect local organizations.

26.  Environmental Uncertainty - the degree of change and complexity in an organization’s environment.  Environmental Complexity - the number of components in an organization’s environment and the extent of the organization’s knowledge about those components.

28. Culture: The attitude, traits and behavioral patterns which govern the way an individual interacts with others is termed as culture. Culture is something which one inherits from his ancestors and it helps in distinguishing one individual from the other.

29.  Organizational Culture: Organization culture refers to the beliefs and principles of a particular organization. The culture followed by the organization has a deep impact on the employees and their relationship amongst themselves. Every organization has a unique culture making it different from the other and giving it a sense of direction. It is essential for the employees to understand the culture of their workplace to adjust well.

31. The culture of the workplace controls the way employees behave amongst themselves as well as with people outside the organization.  The culture decides the way employees interact at their workplace. A healthy culture encourages the employees to stay motivated and loyal towards the management.

32.  The culture of the workplace also goes a long way in promoting healthy competition at the workplace. Employees try their level best to perform better than their fellow workers and earn recognition and appreciation of the superiors. It is the culture of the workplace which actually motivates the employees to perform.

33.  Every organization must have set guidelines for the employees to work accordingly. The culture of an organization represents certain predefined policies which guide the employees and give them a sense of direction at the workplace. Every individual is clear about his roles and responsibilities in the organization and know how to accomplish the tasks ahead of the deadlines.

34.  No two organizations can have the same work culture. It is the culture of an organization which makes it distinct from others. The work culture goes a long way in creating the brand image of the organization. The work culture gives an identity to the organization. In other words, an organization is known by its culture.  The organization culture brings all the employees on a common platform. The employees must be treated equally and no one should feel neglected or left out at the workplace. It is essential for the employees to adjust well in the organization culture for them to deliver their level best.

35.  The work culture unites the employees who are otherwise from different back grounds, families and have varied attitudes and mentalities. The culture gives the employees a sense of unity at the workplace.  Certain organizations follow a culture where all the employees irrespective of their designations have to step into the office on time. Such a culture encourages the employees to be punctual which eventually benefits them in the long run. It is the culture of the organization which makes the individuals a successful professional.

36.  Every employee is clear with his roles and responsibilities and strives hard to accomplish the tasks within the desired time frame as per the set guidelines. Implementation of policies is never a problem in organizations where people follow a set culture. The new employees also try their level best to understand the work culture and make the organization a better place to work.  The work culture promotes healthy relationship amongst the employees. No one treats work as a burden and moulds himself according to the culture.

37.  It is the culture of the organization which extracts the best out of each team member. In a culture where management is very particular about the reporting system, the employees however busy they are would send their reports by end of the day. No one has to force anyone to work. The culture develops a habit in the individuals which makes them successful at the workplace.