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Empowering Employees: The Path
to Effective Management
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The manager's job, folklore and fact
Managers work at an unrelenting pace, and their activities are characterized by brevity, variety, and discontinuity. Managers perform numerous regular duties, such as ritual and ceremonies, negotiations, and processing of soft information that links back to the organization. Managers strongly favor the verbal media, namely, phone calls and meetings. The manager needs to schedule time, process information, make decisions, and remain locked deep inside their brains.
Interpersonal roles
Figurehead role: Every manager must perform some duties of a ceremonial nature. The manager is in charge of an organizational unit, so they're responsible for the work of the people in the unit. Managers spend as much time with peers and other people outside their units as they do with their own subordinates and very little time with their own superiors.
Informational roles
The managers perpetually scan their environment for information, interrogate their liaison contacts and subordinates, and receive unsolicited information as a result of their personal contacts. They must share and distribute much of this information as it may be needed in the organization. Every manager must inform and satisfy the influential people who control their organizational unit.
Decisional roles
As an entrepreneur, the manager seeks to have their unit adapt to the changing conditions in their environment. The disturbance handler role depicts the manager involuntarily responding to pressures. The resource allocator is the responsibility of deciding who gets what in the organizational unit. The negotiator works at all levels and spends considerable time in negotiations.
Is lazy management the solution to bad
management?
Since managers do too much and are asked of too much, they become ineffective, so the solution would be to become lazy and let their staff handle it themselves. Instead of lazy management, try managed empowerment - the manager must make an environment where team members feel confident to share ideas and take risks.
Delegation is task-focused with no decision-making capabilities and lots of control and monitoring. Empowerment is the team member having decision- making capabilities within an assigned framework, and less control is required. Shared leadership is when the team member and leader are jointly responsible for the task getting completed and work in a cooperative way, each using their strengths.
Organization
Business is an organization to make money. Organization is everywhere in the universe, and it comes from the Greek word 'organon' or 'ergon' – 'tool'. A certain object is subjective to who's looking at it. A system is rational (goals and tools), natural (social ecosystems), and open (reflecting sector, reflecting wider society and social norms).
Management
Managing is the piece that integrates all areas in an organization, and it comes from an Italian word referring to the handling of a horse. Max Weber (the Protestant Ethic and the Spirit of Capitalism) made an invention 300 years ago. Before this, organizations (businesses) were organized very differently (reciprocity, householding, redistribution, guilds, master and apprentice). Formal structure led to bureaucracy, a standard structure for large organizations (only in Europe).
The modern idea of management was developed by Frederick Winslow Taylor, who reacted against his belief of 'the common tendency of workers to take it easy', and the scientific idea of management. Henry Fayol ("administration industrielle et généralé") made the generic elements of managing any situation (verbs, functions a manager does): planning, organizing, leading/commanding, and controlling.
Scientific management led to a reaction against it through the 20th century, and a lot of ideas were explored, but industry, American/Western European, male/white, and capitalist came up a lot. It wasn't until the late 20th century that 'management' started opening up.
Henry Mintzberg (Harvard Business Review) found that what managers did and practice is very different: interpersonal, informational, and decisional roles. The management approach depends on contexts, such as industry sector, economic cycle, and national norms.
'Effectual reasoning: the principles'
The affordable loss principle: The affordable loss principle translates into zero resources to market principle.
The strategic partnerships principle: Focus on building partnerships rather than on doing a systematic competitive analysis.
The leveraging contingencies principle: This is the ability to turn the unexpected into the profitable.
'Effectual reasoning: the logic'
Effectual reasoning, markets are in essence stable configurations of critical masses of stakeholders who come together to transform the outputs of human imagination into the forging and fulfillment of human aspirations through economic means.
The creation of U-Haul: An exemplar of effectual logic. U-Haul created the market as it grew, gave away initial trailers to renters so they could establish dealerships in the cities they move to, partnered with gas stations to use their unused spaces to park and manage the paperwork, and used advertising in the yellow pages and seeing the trucks.
Effectual reasoning may not necessarily increase the probability of success of new enterprises, but it reduced the costs of failure by enabling the failure to occur earlier and at lower levels of investments.
So, what makes entrepreneurs
entrepreneurial?
Entrepreneurs are entrepreneurial, as differentiated from managerial or strategic, because they think effectually. They believe in a yet-to-be-made future that can substantially be shaped by human action, and they realize that to the extent that this human action can control the future, they need not expend energies trying to predict it. The future is shaped by human action, but it is more useful to understand and work with the people who are engaged in the decisions and actions that bring it into existence.
Instead of 'finding your passion' try
developing it
Have an open mindset. If you're too narrow to one area, it could prevent you from developing interests and expertise that you need to do that bridging work. Difficulty may have signaled that it was not their interests after all. Instead of 'finding your passion', 'develop your passion.' When students have a fixed mindset, they're not open for new ideas from other areas.
The foundation and the 'why' of
entrepreneurship
Entrepreneurship builds upon other core functional areas, but it is distinct from other areas because of the focus on 'developing and capturing opportunities.' It is a relatively new discipline. Entrepreneurs are among the happiest people in the world, but most new ventures struggle to grow their impact. The key objective of entrepreneurship is to provide knowledge and skills that help individuals and companies create more economic and social value.
The myth that money is the strongest motivation is false - motivation and independence are the strongest motivations. Success is not a straight line - it is a crazy line (spaghetti), with lots of failure. The idea is not enough - customers are more critical than ideas. Doing is extremely important, but selecting the kind of risk is important.
Positive asymmetric reward and risk (more reward than risk, less downside more upside) is what expert entrepreneurs seek, not high risk low reward (going to the casino). Expected returns are not guaranteed. Entrepreneurs really hate risk, so they're very selective about what risk they take.
The myth that entrepreneurs follow their passion is problematic - a fixed view can become 'static,' and passion can hinder. Instead, they develop their passion. Obsessive passion (stubborn) isn't healthy - a healthy passion that fits into your way of life is better. Businesses fail not because they lack money, but because they lack customers (money follows customers).
Short history of entrepreneurship thinking
and practice
1980s - The special traits of the individual entrepreneur (come in all shapes and sizes). 1990s - Capitals/resources matter a lot (more resources/ connections/money will help). 2000s - Need to understand it as a dynamic process. Skills that help find positive asymmetric reward and risk (high reward, low risk): awareness and alertness, analyzing and planning (understand situation), preparing then executing (change and evolve the resources). The process is perhaps as 'artistic' as analytical.
The 'effectuation' concept: Researchers found that expert entrepreneurs (who found multiple successful ventures) do it differently. They emphasize starting with what they have, no need to predict the future but work to recombine resources to create the future, affordable loss, pivot to set new goals and new opportunities, and networking and partnership in order to seek commitment.
Entrepreneurship is a process of opportunity and discovery and creation. Exploiting and capturing opportunity. Entrepreneurs are individuals who not only formulate ideas for something new, useful, and better, but also who convert these ideas into reality and by doing so, create value - economic, or
Demographic and diversity challenges: Organizations need to ensure their workforce represents their customer base. Changing work and cultural values: Technological advancements, such as AI, can displace employees, while collaboration tools enable global teamwork. Competitive pressure: Organizations need to reduce costs and manage their workforce effectively.
Employment-Related Legislation
Organizations must comply with various employment-related legislation, both at the federal and provincial levels. This includes:
Federal legislation: The Canada Labor Code, the Canadian Human Rights Act, Employment Equity legislation, and Pay Equity legislation. Provincial legislation: Human rights legislation, employment standards legislation, labor relations legislation, and occupational health and safety legislation. Privacy legislation: The Personal Information and Electronic Documents Act (PIEDA).
Understanding and adhering to these laws is crucial for organizations to avoid legal issues and ensure fair treatment of employees.
Reading and Understanding Financial Statements
Financial statements provide valuable insights into an organization's financial health and performance. Key financial statements include:
Balance sheet: Provides a snapshot of a company's assets, liabilities, and equity. Income statement: Gives an overview of a company's income and expenses over a set period. Cash flow statement: Details the inflows and outflows of cash for a specific period.
These statements, along with annual reports and 10-K reports, can help managers and investors understand a company's financial status, goals, and overall performance.
How Managers Use Financial Statements
Managers use financial statements to:
Assess the company's financial health and performance. Identify trends in income and expenses over time. Understand the company's cash flow and liquidity. Make informed decisions about the company's operations and strategic direction.
By understanding and analyzing financial statements, managers can make more informed decisions to improve the organization's performance and competitiveness.
6 Ways Managers Can Use Financial
Statements
Measure Impact
Financial statements provide a method for tracking the impact of a manager's efforts on the company's bottom line.
Determine Budgets
Understanding the company's financial health and history is necessary when budgeting and should be paired with a forward-thinking mindset.
Cut Unnecessary Costs
Financial statements can highlight areas where it is possible to cut costs, providing an eye-opening chance to save money.
Think Big-Picture
Keeping the broader health of the organization in mind is vital when managing a team.
Align Across Departments
Financial statements can be used to ensure multiple departments are on the same page.
Drive Team Motivation
Income statements can show how employees' projects positively impacted the company's revenue.
Earnings Forecasts and Global Trade
Earnings forecasts are lagging, representing a harsh reality. Global trade could decline by as much as one-third.
The unemployment rate is at 12-13%, the worst level since the Great Depression. Flexible reporting standards mean investors know little about when companies used emergency wage subsidies.
Some companies didn't acknowledge receiving the Canada Emergency Wage Subsidy (CEWS) at all, while others said they did but didn't specify the
Data Analytics and Business
Every company is bursting with information, and data analytics can provide better insight, greater efficiency, and improved coordination of risk and compliance activities.
Data analytics have improved an accountant's ability to discern risk more efficiently, accurately, and transparently. Tax functions are replacing manual spreadsheets with modern database technologies, and organizations in every industry are racing to recruit and create data-savvy people.
As organizations rely more heavily on analytics, requests will shift from ad- hoc to more ongoing trend analysis. Increased regulations have led businesses to invest more in their compliance functions, with a focus on accuracy.
Financial Management
The basic functions of a firm are to produce and/or sell goods and services, and the role of a financial manager is related to planning, obtaining, and efficiently using the financial resources of the firm.
The three equivalent goals of financial management are to maximize shareholder wealth, share price, and firm market value.
Financial planning involves forecasting sales, estimating additional assets needed, and selecting the sources of money, including short-term assets and long-term financing options.
Inflation, Diversification, and Investments
Inflation is starting to look like the biggest threat to financial health and standard of living. Diversification can reduce risk without sacrificing returns by combining asset classes with low correlations.
Investment assets include stocks, bonds, mutual funds, real estate, and cryptocurrencies, each with their own risk and return characteristics. Percentage returns, including dividend yield and capital gains yield, provide a more intuitive way to evaluate investments.
Investment companies pool funds and provide services such as record keeping, diversification, professional management, and lower transaction costs.
Marketing
Marketing is not just selling, but a process of understanding, creating, communicating, and delivering value. It focuses on steadily increasing revenue at a profit through effective management of the marketing process.
Marketing is not a department but a pan-organizational effort, and it involves responsive, anticipative, and need-shaping approaches to target specific market segments and niches.
Managing Marketing as a Scientifically-
Managed Process
The Modern (Industrialist) Approach: Marketing as a
Scientifically-Managed Process
Marketing is viewed as a scientifically-managed process, with a focus on profitably understanding, creating, communicating, and delivering customer value. Key careers in this approach include marketing executives, product/ brand managers, and sales managers.
The 5-Steps to Profitably Understand, Create,
Communicate and Deliver Customer Value
Research : Identifying and creating value by finding and filling needs. Market-driven: Reactive to market need/demand (responsive marketing, anticipative marketing).
Market-driving: Proactive need-creation (need-shaping marketing).
Segmentation, Targeting, and Positioning : Classifying profitable customers and creating distinctive positioning.
Mass marketing: 'Broad pushing' (standardization/economies-of-scale) and network 'pulling' (personal selling and/or retailers). Target marketing: 'Broad pushing-a-part' (customer segmentation) and specific 'pushing' (standardization; economies-of-scale).
Customer-level marketing: 'Pulling-a-bit' (individual-tailoring) or 'broad pushing' (mass customization).
Marketing Mix : The 4P's (product, price, place, promotion) used to deliver and communicate value to markets/customers.
Implementation : Operationalizing the 4P's through a pan- organizational market orientation.
Control : Research for feedback, revisions, and/or improvement of the value delivered (a pan-organizational effort).
Managing Marketing as a Socio-Culturally Constructed
Narrative (Belief System)
The Postmodernist Approach: - Marketing is viewed as a socio-culturally constructed narrative (belief system). - Key careers in this approach include
Millennials and Gen Z: Shaping the Future of
Work
Millennials and Gen Z: A Generational Shift
Millennials and Gen Z, the two youngest generations in the workforce, are redefining the way we think about work. These generations have consistently faced weak and uncertain Western economies, and they are the first totally connected generation, accounting for 75% of the workforce by
Priorities and Values
Contrary to popular belief, Millennials and Gen Z are not primarily motivated by money. More than 50% say they would take a pay cut to find work that matches their values, while 90% want to use their skills for good. These generations aim to make the world more compassionate, innovative, and sustainable, demanding accountability and action from businesses and governments.
Driving Social Change
Millennials and Gen Z have long pushed for social change, and many now feel the world is at a pivotal moment. Their digital native abilities to connect, convene, and create disruption have had a global impact, as seen in movements like #MeToo and Black Lives Matter, which have compelled real change in society and business.
Challenges for Businesses
The capitalist system is under siege, as Millennials and Gen Z feel that businesses are focused on their own agendas rather than improving society. Only 28% say they feel their current organization is making full use of their skills. This creates a vicious cycle where business is seen as a detriment to social well-being.
Reframing the Relationship between Business and Society
The great trade-off illusion, where firms must sacrifice financial performance to meet societal obligations and environmental imperatives, is being challenged. Reframing the relationship, creating societal benefit can be a powerful way to create economic benefit, generating profit by benefiting society, not at the expense of it.
Pathways to Generating Shared Value
Sustainable enterprise can drive competitive advantage through stakeholder engagement, community solidarity, risk management, fostering innovation, improving financial performance, and building consumer loyalty and
employee engagement. This can be driven by a moral mandate, a legal requirement, a cost of doing business, or an opportunity to create value.
Indigenous Innovation and Entrepreneurship
Indigenous communities, such as the Squamish Nation in Canada, are demonstrating their entrepreneurial spirit and innovative approaches to development, showcasing the potential for sustainable and community- driven projects that benefit both the environment and the local population.
Reconciliation and the Canada Agenda
The relationship between Indigenous peoples and the Canadian government has a complex history, marked by colonization, dispossession, and cultural genocide. The Canada agenda aims to renew the nation-to-nation relationship, addressing the damage from colonization and restoring jurisdiction over lands, resources, and cultural revitalization.
Behavioral Economics and Gamification
Insights from behavioral economics and the use of gamification can help organizations better understand and motivate their employees and customers, leveraging intrinsic drives and psychological needs to foster engagement and performance.
The Importance of Strategy
Effective strategy is crucial for organizations to navigate the changing competitive landscape, characterized by increased globalization, technological change, and knowledge intensity. Strategy should be more than just slogans, translating into identifiable actions and activities that position the firm with respect to its rivals.
Business Strategy - Strategy for One Product
Market
Vision Statement
A successful vision: - Is an enduring word picture of what the firm wants to be and expects to achieve in the future - Reflects the firm's values and aspirations - Recognizes the firm's internal and external competitive environments
What Comprises a Company's Vision?
Core Values
3-5 guiding principles that matter most within the organization These are independent of product and market conditions
marketing campaign or word of mouth - Product design – high-end, exclusive, and unique
Analyzing the External Environment
Recall the I/O model of strategy that claims that profitability is mostly determined by a firm's environment.
An important part of the strategic management process is the use of analytic tools that help managers to: - Identify external opportunities and threats - Formulate appropriate strategic responses
The External Environment: General Environment
External environment analysis is a continuous process which includes: - Scanning - identifying early signs of environmental changes and trends - Monitoring - detecting meaning through ongoing observations of environmental changes and trends - Forecasting - developing projections of anticipated outcomes based on monitored changes and trends - Assessing - determining the timing and importance of environmental changes and trends for firms' strategies and their management
Key Takeaway
Strategy is the creation of a unique and valuable position, involving a different set of activities (with fit amongst the activities) with respect to rivals Translates into activities and actions Should be a coordinated set of actions that run through the entire organization, not just isolated initiatives (fit between them)
