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Inde047 lect02 organization behavior
1. INDE047 – Business
Management for Engineers
Part I
Mohammad Tawfik
November 2013
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
37. Lead, follow, or get out of the
way!
Thomas Paine
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
38. The first basic ingredient of
leadership is a guiding vision
Warren Bennis
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
40. Leadership is influence,
nothing more, nothing less
John C. Maxwell
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
41. If your actions inspire others
to dream more, learn more,
do more, and become more,
you are a leader
John Quicy Adams
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
102. Innovation is the key!
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
103. Bringing creative ideas to life
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
104. WARNING!
• Nothing really insures that you will get an
innovative idea in any field, rather,
suggestions of things that you may do can
increase the possibility of getting one
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
121. INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
122. Why Do Good Companies Go Bad?
• In a nutshell: Good companies fail when
they are unable or unwilling to change
when their external environment changes
significantly.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
125. What leads to Denial?
• Denial of emerging technologies.
Denial of changing consumer tastes.
Denial of the new global environment
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
126. Signs of Denial
• “Hey, we’re different, so there’s no way
it can happen to us.”
The company is too proud to admit that
someone else has come up with a better
way.
The company ignores, rationalizes, or
blames others for its situation instead of
admitting its fault.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
127. How to break the habit of denial
Look for it
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
128. How to break the habit of denial
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
129. How to break the habit of denial
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
131. What is Arrogance?
• Offensive display of:
Superiority
Self-importance
Pride
Disdain (contempt)
… because of an inflated sense of self
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
132. What leads to Arrogance?
• Exceptional achievement in the past
David conquers Goliath
The company pioneers a product or
service
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
133. Signs of Arrogance
• The company stops listening
The company becomes extravagantly
eager to show off.
The company begins to act like a bully,
both internally and externally.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
134. Signs of Arrogance
• The company becomes high-handed and
abuses rules
The company favors those who validate its
views and gets rid of those who are
critical.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
135. How to break the habit of
arrogance?
• Rotate management to new challenges.
Implement nontraditional succession
planning.
Diversify the talent.
Change the leadership.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
137. What is Complacency?
• Complacency is the sense of security and
comfort that derives from the belief that
the success that’s taken place in the past
will continue indefinitely.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
138. What leads to Complacency?
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
139. What leads to Complacency?
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
140. Signs of Complacency
• The company is in no hurry to make
decisions.
The company’s processes are overly
bureaucratic.
Everybody has to get on board before a
decision is made.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
141. Signs of Complacency
• The company is completely vertically
integrated.
Enormous cross-subsidies are in place –
by functions, by products, by markets, by
customers. Average costing and average
pricing prevail.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
142. How to break Complacency?
• Reengineer to achieve high quality,
eliminate waste, and reduce inefficiency.
Decentralize profit and loss by creating
and molding business units around
products or geographies.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
143. How to break Complacency?
• Outsource – contract out all non-core
functions.
Reenergize – consider a new leader with a
positive, opportunity-oriented vision
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
145. What is Competency
Dependence?
• Somebody else can be doing a better job,
and if a company is unable to figure out
what to do, it has become competencydependent
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
146. What leads to Competency
Dependence?
• R&D dependence
Design dependence
Sales dependence
Service dependence
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
147. Signs of Competency
Dependence
• Reengineering, reorganization, retooling
have been tried and still no good results.
The thrill is gone and the company is in a
funk.
Stakeholders are leaving
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
148. How to break Competency
Dependence?
• Find new applications where the same
competency results in new value.
Determine new markets where the same
competency remains an asset.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
149. How to break Competency
Dependence?
• Expand the range of your competencies
by moving up or down the value chain.
Refocus company resources into areas
with more growth and profit potential.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
151. What is Competitive Myopia?
• When they define their competition too
narrowly and acknowledge only direct and
immediate competitors
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
152. What leads to Competitive
Myopia?
• The natural evolution of the industry.
.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
153. What leads to Competitive
Myopia?
The clustering phenomenon.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
154. Signs of Competitive Myopia
A company allows small niche players to
coexist with it.
The loyalty of a company’s supplier is won
by a nontraditional competitor.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
155. Signs of Competitive Myopia
New entrants, especially those from
emerging economies, are underestimated.
The company becomes helpless against a
substitute technology.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
156. How to break Competitive
Myopia?
Broaden the scope of the product or
market.
Consolidate to squeeze out excess
capacity.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
157. How to break Competitive
Myopia?
Counterattack the nontraditional
competitors.
Refocus on the core business to
concentrate limited resources in the most
successful area.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
159. What is Volume Obsession?
• Too much money is being spent for the
company to make money.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
160. What leads to Volume
Obsession?
The high-margin pioneer.
The fast-growth phenomenon
The paradox of scale.
The ball and chain of unintended obligations
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
161. Signs of Volume Obsession
Guideline-free, ad hoc spending.
Functional-level cost centers.
A culture of cross-subsidies.
Stakeholders say numbers are not good.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
162. How to break Volume
Obsession?
Identify where the company’s costs are.
Convert cost centers into revenue centers
or profit centers.
Move from vertical integration to “virtual
integration”.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
163. How to break Volume
Obsession?
Outsource non-core functions.
Reengineer to automate processes to
improve cost efficiency.
Implement target costing
Become a world-class customer.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
165. What is Territorial Impulse?
• As companies grow they tend to organize
themselves into “functional” and later
“regional silos”. However, the various
units into which companies organize
themselves don’t always get along well
with each other, for various reasons.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
166. What leads to Territorial
Impulse?
The corporate ivory tower.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
167. What leads to Territorial
Impulse?
Growth requires the institution of formal
policies and procedures.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
168. What leads to Territorial
Impulse?
The informal, spontaneous culture is
extinguished.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
169. What leads to Territorial
Impulse?
A company’s culture is dominated by one
functional specialty.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
170. Signs of Territorial Impulse
Dissension - a lot of headstrong
lieutenants instead of one strong general
Indecision – decision-making is an
agonizing or even impossible process
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
171. Signs of Territorial Impulse
Confusion – one side doesn’t know what
the other side is up to
Malaise – nobody’s happy
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
172. How to break Territorial
Impulse?
The leader must bring all the people
together in a common cause.
Rotate the people in and out of different
functional or geographic silos.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
173. How to break Territorial
Impulse?
Create permanent cross-functional teams.
Reorganize around customers or products
rather than around function or geography.
INDE047 – Business Management
for Engineers: Part I
Mohammad Tawfik, PhD
176. What is a conflict?
●
●
“An expressed struggle between at least two
interdependent parties who perceive
incompatible goals, scarce resources, and
interference from others in achieving their
goals.”
Or Simply: “discomforting difference.”
186. To reach win-win resolution ...
Treat conflicts as a challenges that you can work on
together to achieve a solution for both.
187. Perhaps our greatest limitation in working toward
win-win solutions is that each of us comes to the
table with deep-seated ideas about conflict and
powerfully ingrained strategies.
188. Conflict does not arise so
much from a difference
itself but from the
perception we have of
that difference
189. To reduce conflict ...
Try to see situation from the other person's
perspective
190. Almost all of us tend to attribute mistakes or
failings on our part to external events
191. ... but we also tend to attribute the behavior of
others to their own character or emotions
192. We’re really emotional beings who have evolved
an ability to reason that helps us deal with our
emotions.
193. Remember that emotion is an internal fact; it’s a
response to perceptions you are having
207. The important point to remember is that both
parties have power in any conflict and that
power derives from the interdependence
between the two parties in general and the
particular situation they are in
257. All organizations are like living organisms,
constantly moving, changing, and interacting, and
a change in any one element affects the
organization as a whole
258. Some parts of the system operate informally and
unofficially
259. Managers and supervisors must improve conflict
management within the organization in order to
minimize costs.
274. Moral conflicts are those in which the issues are
framed as matters of what is morally right and
morally wrong
275. Note from the outset that this absolute framing is
a dysfunctional conflict strategy
276. Moral values are inherently subjective, yet they
are usually held as nonnegotiable absolutes
277. In a dispute about a moral question, it’s difficult to
reach a win-win resolution
278. Among the specific tactics that may be helpful in
dealing with moral conflicts is reframing, that is,
finding a constructive new way to view a conflict
through a different lens or frame.