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									                                CHUNG-ANG UNIVERSITY




  Management Organization
                                     Class notes


The class notes to ‘Management Organization’ include lecture summaries, personal reflections and
thoughts and some listings of additional readings with comments. The purpose of the notes is to
create a full understanding of the lecture points given by professor Chanhi Park.




                                     Kristine Fischer Hansen



                                   September 24th 2009
                                          Management Organization



                                    Lecture # 1, September 3rd


Organization
Organization1:           “is a social arrangement which pursues a collective goal, which controls
its own performance, and which has a boundary separating it from its environment”.

Why is organization needed?
Thoughts: Organization is of key importance in order to maximize the utilization of the
competences of all the individuals for the common good of “the firm” (or the shareholders, since
the goal of a company is to maximize shareholder value). Because in organizations 1+1 is more
than 2.

In a company without organization it is impossible to achieve any order and structure. Lack of
organization will result in chaos which will lead to a system break down. Therefore the importance
of organization will be immeasurable to group which is trying to function toward a single goal, but
since employees might not share the leader’s goals, organization is of key importance. You can’t
do everything alone. Employees might not share your dreams or visions for the company, they will
still help you if compensated.

Even in small groups or teams where all members are equal (or close to) in ability, motivation and
opportunity an organization or structure will quickly form. Earlier when working on a team project
I have noticed that all members take on a role and an organization appears. It usually starts by one
person taking on the role of leadership, one taking the role of ‘initiator’, a third will be ‘time
manager’ or ‘finisher’, and another will become the ‘data collector’ and so on. In my experience
this all ensures the maximum outcome and a comfortable working environment.



Case of the Egyptian prince
In short it is the story of a prince, the third in the row and therefore not the first ere to the throne
ends up as king. The prince is the best fitted for the job, but tradition and law says it must be the
first born son. To win the throne, the prince is to build a pyramid and he does so by optimizing the
work of the slaves by building an organization.

Motivation is created using one, some or all of the following 3 methods:

    1. Liberating the best slave
    - Efficacy of rewards and penalty for “selected” targets

There are several different ways of doing this; one is by using terror and threads, which could
work for a while. Trying to avoid punishment will ensure hard work. This method was used by
1
http://en.wikipedia.org/wiki/Organization last visited Wednesday September 23rd at 08:26



Kristine Fischer Hansen                                                                           Page 2
                                            Management Organization



Ramses in the story of how Moses led the Hebrew slaves out of Egypt. But as the story show, it is
not a perfect solution, because as history has shown suppressed people will rebel at some point.

Another method is by uniting the slaves, same goal for all. But unity will not work if there is
nothing to gain. A good example of unity and mental rewards is in religion. Here many work for
free, getting no compensation for their work, and still working hard. Sometimes this form of
mental award can work.

    -   Use of “award” under limited resources

As an “award” several things can be used, like a better office, parking space, simply a pad on the
back and recognition or even a fancy title. The use of promotions or titles can be very effective
since “slaves” will compete for such honor.

    -   Synergistic combination between “ award” and “money”

The combination of “award” and money is very common, since if promoted, a higher wage is
usually given as well.

    -   Efficacy of “freedom” under stressed situations

Implication for military camp or prison, when there is not much to offer the “slaves” as rewards.
Freedom is not very efficient in schools, where all the “slaves” are there because they want to be,
not because they are forced to.

Thoughts: Freedom as a reward is widely used in many Danish companies where higher wage is
of little importance since wages are already very high. In such cases freedom and the chance to
spend time with the family is highly valued by the “slaves”.

    -   Performance goal setting:               Taylorism vs. Competitive goal setting

Thoughts: The difference is that using the method of competitive goal setting the company is
striving to do better, working towards continuously improving whereas Taylorism simply
formulates a standard and all workers have to comply with it.

Additional reading:         Taylorism2, or Scientific management as the developer Frederick
Winslow Taylor called it, can be explained in short as: “a theory of management that analyzes and
synthesizes workflow processes, improving labor productivity3”.

The core ideas of the theory were developed by Frederick Winslow Taylor in the 1880s and 1890s.
The theory is based upon the idea that tradition and rules of thumb should be replaced by precise


2
  Article explaining taylorism at http://en.wikipedia.org/wiki/Scientific_management last visited September 7th at
17:24.
3
  http://en.wikipedia.org/wiki/Taylorism_(disambiguation) last visited at 13:53 on September 10th 2009



Kristine Fischer Hansen                                                                                        Page 3
                                     Management Organization



standards, developed by carefully studying an employee at work. Taylorism entails that
management have a high level of control over the employees.

Today Taylorism is mentioned in management literature, as an example of a contrasting business
method to the newer and improved ones. Looking at Taylorism through the lenses of politics and
behavioral science, it can be seen as “the division of labor pushed to its logical extreme, with a
consequent de-skilling of the worker and dehumanization of the workplacei”.

Several new concepts that are still being used today were introduced by Taylor. Breaks during the
workday, which were not common in those days, can be mentioned as an example of such a
concept. During his studies of the workers he found that they needed time to recover from
fatigue. He also proved this theory with the task of unloading ore: employees were told to take
breaks during the work and as a result thereof production did increase as he had foreseen.

Critics to the Taylor method:
Taylorism fails to take into account two inherent problems:

      Individuals are different from each other: the most efficient way of working for one person
       may be inefficient for another;
      The economic interests of workers and management are rarely identical, so that both the
       measurement processes and the retraining required by Taylor's methods are frequently
       resented and sometimes sabotaged by the workforce.

Taylor didn’t compare employees to machines, but some of his critics have used this as metaphor
explaining how Taylorism optimizes the employees by removing waste in the form of time, as well
as unnecessary or wasted effort. The standards developed for the workers may not be adaptive to
a changing situation as it emphasizes routine procedures, making it more difficult to change work
layouts etc.

    2. Selecting and raising team leaders
Although only the general worker is directly ‘value adding’ to the final product the team leaders
are important to ensure work is conducted in a satisfactory manner. So even though losing a
worker and having to spend, what would have been profit, on the wage of such team leaders or
managers, they cannot be left out of the organization.

   -   Selecting and retention process (management support team)

Specialization:                          Passing on knowledge to new recruits is very valuable, if
the knowledgeable worker knows how to communicate this knowledge in a sensible manner. It
takes some ability to teach to pass on valuable knowledge to others. Although a skilled worker
with tons of experience very specialized in his field it is not enough to become a successful
‘trainer’ or leader of new unskilled workers.




Kristine Fischer Hansen                                                                       Page 4
                                       Management Organization



System of division

The power of communication:                without the ability to communicate the message, there
will be so many misunderstandings that the organization will fail to reach the overall goal, since no
one knows exactly what that is. It is of the outmost essence that all are on the same page and are
aware of the obstacles and tasks that lie ahead in order to get the best outcome. You need to
know where you are going in order to choose the right direction, and no! : All roads do not lead to
Rome.




As it is hard to describe the power of communication, I chose the picture above to illustrate the
point as a picture is worth a thousand words as they say.

   a) Selection criteria
   b) Matching problem
   c) Retention & development

Advanced issues:           ‘Promotion vs. Raise’ under “matching problem”

Limits of management development: There are some things that cannot be taught and although
putting selected workers through extensive training they might never become talented managers.
In Korea promotion motivation is very common, but the problem with this practice is that good
workers do not always make good managers. Training will help, but it can never compete with
talent.

Matching problem:       the problem of good workers who are awarded with a promotion,
becoming bad managers. The firm looses a good worker and gets a bad manager.

   -   Fast track vs. Experience from the “real” world.

Thoughts: As the matching problem explains; good workers might not be good managers, but
while working as a vertical planner for Lego systems A/S I learned that the managers with
experience from the “real” world were respected more by the general workers. Also the manager
with the “real” world experience had the advantage of understanding the problems, or issues of
the workers much better enabling them to make the better decisions compared to the managers
who had fast tracked (in this case me coming directly from the school bench).

   -   Necessary qualities and tools




Kristine Fischer Hansen                                                                        Page 5
                                      Management Organization



Authority vs. responsibility       Significance of discretion (=power)

   3. Competitive consequences
   - External competition among the teams

External competition affects/triggers the internal competition. As most people don’t want to be
the cause of harm to others, nor the one to blame for bad team performance all will work hard not
to fall behind the level of the others.

Collusion problem? Loser’s heaven? Although most don’t want to fall behind there are some
that are simply freeloaders and who will exploit the fact that the other team members will work
hard at not being the worst team, making it possible for one person to slack while the rest of the
team manage to keep the team at a satisfactory level.

   -   Internal competition and peer pressure

By forming teams and having those teams compete against each other performance will increase.
Each team will have as a goal to beat the other teams. This will result in pure pressure – pressure
for performance which will occur when the competition between teams increase and the stronger
will blame the less strong for the less than perfect overall performance of the team.

Enemies between the slaves will exist as some ‘slaves’ outperform the others making the demands
from the manager increase.

   -   Evolutionary process

Generic ways of “control” in human organizations:

   -   performance monitoring and reward
   -   hierarchical control
   -   peer pressure

All these ways of control can be found in the case of the Egyptian prince as well as in the real world
surrounding us.

   -   Hero: Signaling effect (part of “culture”

The slaves will follow the example of a hero. In Russia the leaders made a hero out of a “slave”
who was a mineworker and worked many hours every day, helping his fellow “slaves” and working
twice as hard as all the rest. This was a very smart move since that meant the workers would work
harder with no additional compensation.

Thoughts: However that fact that he helped others even though he had a lot of work to do
himself could be another point of interest and this fact might be why is was a hero in the eyes of
the workers, not simply the fact that he worked harder than the rest of them.



Kristine Fischer Hansen                                                                         Page 6
                                      Management Organization



Final thoughts:            In the jobs I have had previously I have experienced a mixture of many
different approaches to this problem of maximizing the efforts of the employees. The most
effective ones have been when working for LEGO; here I found a combination of responsibility,
personal freedom, a sense of community as well as competition amongst the teams and
promotion motivation plus compensational motivation.

When I worked for the Danish mail company, POST Danmark the experience was less positive,
here there were the same degree of personal freedom, and competition amongst teams, but there
were very little other motivational factors in play. I do however believe this will be changing in the
near future since the entire company is experiencing major changes at the moment.




Kristine Fischer Hansen                                                                        Page 7
                                      Management Organization



Lecture # 2, September 15th

History of business studies
Everything can be studied. One studies to gain knowledge and to posses at a certain skill. Even
with a lot of talent most things requires a mix between education and talent to succed. Even the
Danish Vikings had to learn how to sail a boat, how to rob and steel in the best manner in order to
avoid being harmed them self and to get the most out of the loot, the biggest haul.

Russian families financed wars in other European countries in the 1600’s.

Evolution of borrowed ideas

Taylor study = study of standards and time (see lecture # for more details on Taylorism)

Mayo study (organization) attention ↑efficiency. What get’s measured get’s done.

               Organizational behavior

               micro          macro

Strategy (content study= what to do      process study= how to do)



                              Economy of scale




                               Coordination cost


As the graph illustrates the optimal point is where they meet.




Kristine Fischer Hansen                                                                      Page 8
                                             Management Organization



Control and the divergence4 of interest
Thoughts:        Being in control vs. being controlling

During my previous jobs I have learned that there is a big difference between managers being in
control and managers being controlling, as well as managers being out of control. I found that it is
important that the leader/manager is in control of the situation, the direction of the company as
well as in control of the workers, however I believe it is almost just as important that it is being
done in a way that the workers don’t experience the manager as being controlling of them, but
simply controlling the situation. If the employees feel that management is out of control they
don’t feel secure in their job and might think the situation is chaotic and start looking for other
employment.

If on the other hand the workers feel that someone is looking over their shoulder all the time they
might feel as if their personal space is being invaded or that the company distrusts their capability
to perform the job and then resign or look for employment elsewhere.

I believe that the right amount of control is important as is communicating and demonstrating that
management is in control.

Principal / Agent method:

                                   Choice
Information assymmetry                                     Principal / Agent




                                                                * Moral hazard




                 Before choice              After choice

*Insurance (the careful driver pays for the accidents of others)

The principal-Agent method5:           a method to handle the difficulties which arise when the
information is incomplete and asymmetric when a principal is hiring an agent. For example the
problem could be that the two parties might not have the same interests.

There are various mechanisms that can be used to align the interests of the agent to those of the
principal, such as commissions, profit sharing, efficiency wages, performance measurement
(including financial statements), or fear of firing. This principal-agent problem can be found in
most employer/employee relationships. As an example it is often the case when stockholders hire

4
    Translation: mister interessen eller man har modsatrettede interesser.
5                                                                                           rd
    http://en.wikipedia.org/wiki/Principal-agent_problem last visited Wednesday September 23 at 21:45.



Kristine Fischer Hansen                                                                                  Page 9
                                             Management Organization



a top executive of a corporation. One of the reasons why this happens is that it is the
unobservable qualities a principal is looking for when hiring an agent. The same problem can be
encountered in the used car market or in arranged marriages.

The model below illustrate the problem:




The picture above illustrate the basic idea of Agency Theory (P: Principal, A: Agent)6.

Control
The following illustration depicts the purpose of being in control of the company, which is to make
decisions based on information from the feedback (internal information), not barely on the
information about the external environment.


    Goal              Standard            Feed back



                 Adjust goals

By applying this information expectations can be adjusted and forecasts more precise.




6
    Copied from http://en.wikipedia.org/wiki/Principal-agent_problem



Kristine Fischer Hansen                                                                     Page 10
                                      Management Organization



Hierarchy ➝span of control
Most text books say that the span of control cannot be higher than 12 people, however because of
today’s technology it can be higher than before.




The sketch show how the span of control works in a hierarchy.



                            - correction
                            - education




The drawing above shows how corrections and education travels from the lower ranking
employees upwards (feedback).

Thoughts: In very large companies this type of hierarchy and the limited span of control will
lead to a large power distance and will also slow down the feedback or information travelling
either downwards or upwards as in the illustration. Shorter power distance will speed up the
decision making process considerably. It is also very helpful when trying to make the lower ranking
workers feel that managers listen to their ideas and value them.




Kristine Fischer Hansen                                                                     Page 11
                                                                   Management Organization



Lecture # 3, September 10th


What is the goal of the firm?
The overall goal of the firm is to create shareholder value (Maximize investment = high
shareholder value). But this goal consists of many smaller goals and objectives which differs
depending on the lenses through which we look at the firm.

The graphic model below depicts the various lenses through which one can view the company.

                                                                    Firm : various perspectives


                                            Behavioral science                                    Economics               OBJ:
                                            'human organization'                                  "Nexus of contact"      - Maximum firm value         Contract
      OBJ: Efficiency + ? Effectiveness?                                                                                 - Various constraints
                                                                                 Firm

Midrange model                                                                                                           Searching for the best set
                                                                                                                         of contracts, maximizing
                                                 Operation system                                                               'firm value'

                                                                                             Specialist mind??
                                   OBJ: Input - Output                                       Cooperative 'community'
                                        Efficiency
                                                                                                    OBJ: Community welfare?
                                                                                                                   happiness?



Nexus7

Covnant : agreement from the bank

Adaptability to the continuously changing market is of key importance in order to stay in business
since the only way to continuously make a profit is to provide the customers with higher value
than the competitors, that being price leadership or differentiation.

The shareholders have the following rights:                                             dividend and shareholders meetings

Residual claimant (claim to profit = the owner)

       Balance sheet
                     Debt
     Assets
                   Equties                  to shareholders


Create shareholders value, the constraints are creating value for all interested parties (bank
supplier, customer, employees, ….)




7
    A nexus is a connection or the centre of something



Kristine Fischer Hansen                                                                                                                               Page 12
                                      Management Organization



Economics: Inconvenient truth          Strong problem solution ability

                                     Bad rhetorical reputation

Time horizon mismatch between the workers and the firm can be illustrated by the following
equation:




Since the firm have a long term strategy and the worker only is working for the firm for a relatively
short period, there is an obvious mismatch between the time horizons.

Mid-range model: Value profit
                                        worker           involvement
                                        manager          (satisfaction)

Increase firm value

Thoughts: As many people change jobs several times in their lifetime I see where the time
horizon mismatch can be a problem, however I have experiences several people who have worked
the same job all of their lives and even entire families working for the same firm: Son, mother,
father and grandmother. It is not uncommon in the LEGO production facility in Billund, Denmark.
This is an old company with a good reputation amongst the workers and the local community. In a
case like this the workers might have a longer time horizon than managers, who might be looking
into moving production or out sourcing..? LEGO is not, but other companies with the same sort of
loyal employees might be having such considerations.




Kristine Fischer Hansen                                                                       Page 13
                                         Management Organization



Lecture # 4

Luck versus capability
Success is only 30% capability, but as Shakespeare said: “fortune favours prepared minds”.

                     Luck          70%                                           Foundation

Success                                                            Study          Toolkits
                                                   Talent
                      Capability    30%                                               1st hand
                                                                   Experience
                                                    Effort                            2nd hand

The graphical model above illustrate the fact that there are many ways to improve one’s
capability.

If you think hard you will learn a lot, even if you are working at McDonald’s.

Thoughts: I believe that is true. I worked a summer job at a company called Jensen Seeds for
many years and to begin with I watched and learned from the team leaders. It was a job which did
require some skill, but very short training period. I learned a lot about how the work was divided
between the different teams, how the leaders controlled the workers and how to incorporate
breaks and also the importance of team spirit. I advanced to team leader and enjoyed leading and
planning the workday as well as training the new workers very much.

Foundation versus Toolkits:                          Strong foundation is important in order to
use toolkits. Both are equally important. Without experience and background knowledge the
toolkits becomes useless.

Thoughts: I think the experience I have gotten in leading a group of people have helped build
foundation that, with the help of toolkits I learn in school, hopefully accompanied by a little talent
will make me a successful leader some day.

The key difference between the best schools and the rest lies in the foundation building. Learning
the things that will prove valuable after graduation is what makes for a good school and a good
teacher. However it is not an easy task to find relevant material, since all students are most likely
going in very different directions.

Management vs. Leadership                               Leadership vs. Control
The difference between management and leadership or even control is very hard to define. It
could lie in the intent of that person:




Kristine Fischer Hansen                                                                          Page 14
                                     Management Organization



                    Exploration
Intent
                    Maximizing potential

But who will be the judge of the difference between the two? I believe it is near impossible to
make a clear definition.




Kristine Fischer Hansen                                                                      Page 15
                                           Management Organization



                                   Lecture # 5 of September 22nd

Strategy vs. structure
My initial thoughts about this subject are that they are both part of the same thing; I believe they
are dependent on one another.

Before class:
To create some foundation for class discussion I did an internet search on the subject and found
the following information:

The question of Strategy versus structure is encountered in the creation of an organizational
chart8:




“The question whether a strategy can be created without looking at an existing structure
can be negated.
The causes are lying in the fact, that in nearly all cases of strategy-finding we have to
make a compromise concerning the real possibilities in organisational, geographical and
technological aspects. So we could concern to say that strategy follows structure.
Nevertheless there can be changes in structure due to a decided strategy.
Therefore the main aspect to look at is the difference between the physical structure and
the organizational structure.
Especially in production areas the physical structure is very difficult to change, whereas
the structure of organization is dissimilar more easy to adapt.
Even though it is mostly required for affectivity that physical and organizational structure
matches each other, in an existing company it is rarely possible to realize this at every
point of change.
So we have to conclude that if possible strategy follows the physical structure but on the
other side the organizational structure follows the strategy.”

Copied from http://www.foster-
international.net/user_themes1/theme_manage/stst_2_02.html last visited Mondayy
September 21st at 22:54

Additional reading: “What is Strategy?” article from the Harvard Business Review in
the November-December issue of 1996, by Michael E. Porter.



8
    http://www.12manage.com/methods_organization_chart.html last visited Monday September 21st at 09:20:




Kristine Fischer Hansen                                                                                Page 16
                                           Management Organization



Lecture notes:
Alfred DuPont Chandler wrote the book “Strategy and structure” about the evolution of the
American economy, 1910 – 1930.

Alfred DuPont Chandler, Jr.9 :            Was an American professor who was born on September
   th
15 1918 and died at the age of 89 on May 9th 2007. He worked as a professor of business history
at Harvard Business School. Professor Chandler wrote, extensively about the scale and the
management structures of modern corporations. He graduated from Harvard College in 1940.
After military/wartime service in the American navy he returned to Harvard to get his Ph.D. in
History. He taught at M.I.T. and Johns Hopkins University before arriving at Harvard Business
School in 1970. He received a Pulitzer Prize for his work, The Visible Hand: The Managerial
Revolution in American Business (1977).

The DuPont family10:          The Du Pont family is an American family descended from Pierre Samuel du
Pont de Nemours (1739-1817). The son of a Paris watchmaker and a member of a Burgundian noble family,
he and his sons, Victor Marie du Pont and Eleuthère Irénée du Pont, emigrated to the United States in 1800
and used the resources of their Huguenot heritage to found one of the most prominent of American
families, and one of its most successful corporations, E. I. du Pont de Nemours and Company, initially
established by Eleuthère Irénée as a gunpowder manufacturer. Various members of the family managed
the company well into the twentieth century and to this day constitute a substantial portion of the
company's ownership.

Chandler defined Strategy as what to do and structure as how to do it. Structure can also be
defined as a reporting relationship.

There are two methods of viewing this issue:

    1. Strategy ➝ Structure

In this case Strategy is driven by vision and goals
To do strategy ⇒setup organization/system for it


    2. Structure ➝Strategy

In this case “strategy is born out of structure”
Initiated/reviewed/implemented?




9
  According to http://en.wikipedia.org/wiki/Alfred_D._Chandler,_Jr. Last visited Tuesday September 22nd 2009 at
10:46.
10
   Copied from: http://en.wikipedia.org/wiki/Du_Pont_family last visited Tuesday September 22nd 2009 at 11:00.




Kristine Fischer Hansen                                                                                   Page 17
                                        Management Organization



                                                                    11
When structure limits the strategy, it is bound by:



     -   A strategist will analyse the environment of the company, he is bound by resource limits
         and the pressure of the environment.

     -   A structurist is a master of process

Resistance to change:

     -   Conflict of interest (vastid interest)
     -   Legacy = heritage (need to learn new skills)
     -   Culture/indoctrination12

Personal thoughts: I have encountered resistance to change many times one of the most
memorable times were last semester when I did a group project for Planova A/S in Denmark. This
company has gone through many changes in the past and are currently performing very badly,
financially.

The problem with resistance to changes became very evident as we spoke to the employees,
because many of them have worked the same job for many years and feel that the way they are
doing it has worked so far, so why change it? Also they have seen many managers present one
idea, start implementing it, failing and being fired. Now more than half of management has been
employed less than six months and changes are on the way. It is a very difficult situation and both
strategy as well as organizational and physical structure needs to be redefined.

I think the fact that most of management are new; will help this process, because it is very difficult
to make large changes, if management is not on your side. It is difficult to tell a manager that the
way he has been running the company so far is not the optimal way because it might sound like he
has not been doing his job well.

“The only constant thing in life is change”

Mikhail Sergeyevich Gorbachev13:          Was born 2nd of March 1931. In the Soviet Union from
1985 to 1991 he was the second-to-last General Secretary of the Communist Party and there after
the last head of state in the USSR, serving from 1988 until it collapsed in 1991.


11
   Translation = nuværende, siddende, eller pålæggende (www.ordbogen.com)
12
   indoctrinate - to teach with a biased or one-sided ideology
(http://www.google.com/search?hl=en&rlz=1T4SUNA_enDK285DK287&defl=en&q=define:indoctrination&ei=BUK4So
S4BISKswOzotAa&sa=X&oi=glossary_definition&ct=title last visited Tuesday September 22nd)
13                                                                                  nd
   http://en.wikipedia.org/wiki/Mikhail_Gorbachev last visited Tuesday September 22



Kristine Fischer Hansen                                                                       Page 18
                                              Management Organization



In 1990 Gorbachev recieved the Nobel Peace Prize because his attempts to reform Russia and his
reorientation of its strategy helped to end the Cold War. Also it ended the political domination
that CPSU, the Communist Party had on the country and finally led to the termination of the Soviet
Union.

Leadership
There are many forms of leadership as an example of different management styles the platoon
leaders of the American military versus those in the Russian army show clear differences:

American platoon leaders: Run in front, follow me, I will lead, guide and protect you.

Russian platoon leaders:             Stand behind the low ranking soldiers, run that way, I have a gun and
                                     will kill you if you do not.

Management vs. entrepreneurship
Visionary leader

Entrepreneur:                                    Entrepreneurship: Beyond the resource limit (very
creative)

Symbolic leaders have value, but are replaceable:

Personal thoughts:          The Royal family of Denmark have purely symbolic value since they no
longer have any power of running the country. Their role is to be symbolic leaders who unite and
integrate while symbolising the nation. The Danish people in general feel very positively towards
the royal family and their family events make for very popular TV broadcasts. I believe it is
because we find the idea of Kings and Queens and all the rest to be very romantic and fairytale
like, which is why we share their joys and sorrows and would not be without these figures to look
up to.

It is very hard to measure the value of leaders, being symbolic, visionary or entrepreneurs. The
Danish queen would be categorised as a symbolic leader, however since the royal family travel the
world promoting, introducing and advertising Denmark as an interesting place to visit, their value
is not only symbolic, but profitable.

Luck vs. Ability14:         Since luck accounts for as much as 70% of performance and ability is
only 30% it can be very difficult to measure the value and capability of a leader. To illustrate this
Dwight Eisenhower was at the right place at the right time, but most any manager in 2008 would
show to perform badly since we are currently in a financial crisis.




14
     See further details in lecture # 4



Kristine Fischer Hansen                                                                              Page 19
                                          Management Organization



Additional reading:          A translation of the words of a former Danish prime minister (J.C.
                        15
Christiansen, 1905-08 ): “The World is ruled by will power, not by ability16” is a different way of
illustrating how ability is not enough and of the importance of luck, determination, willpower, and
chance.

Dwight David "Ike" Eisenhower17 :         the 34th President of the United States, from 1953 until
1961. Eisenhower is the perfect example of how luck and chance put him at the right position at
the right time. He spent very little time on politics, but because the economy was good, he is
considered a good leader.

Final personal thoughts: Of all the leaders I have encountered in the past, the one I admire the
most is Jørgen Vig Knudstorp and his team. They have managed to turn a sinking ship into a very
successful and promising business. They have even done so in the time of international financial
crisis, LEGO is today a very successful and prosperous company. Mr Knudstorp posts personal
news, as well as corporate news on his blog so that the employees feel informed and familiar with
the CEO. He maximizes his symbolic value this way, but is not only a symbolic leader, but a true
asset to the company. When I worked as a temp, a vertical planner this summer I witnessed the
employees appreciate being included and informed about the details and plans of the company.

If I end up as a leader, I hope to be there because of my ability, not simply because of luck. I hope
that whoever hires me will see by ability and worth, that way I would be of true value to the
company. Working as a leader I hope to be creative, capable, respected and admired for my
managerial skills. I enjoy a challenge and would find it very interesting to try and navigate a
company through a crisis like the one we are currently in, however I understand that luck and
being in the right spot at the right time like Eisenhower would ease the task considerably.

I hope I would leave behind a positive impression on the final result as well as on the people I
managed.

As we discussed in class previously it is very rarely that most of us really do perform our best, but I
hope that I will become much better at this in the future. I do however feel that I have always
done my best at any job I have had, and I am sure I will continue to do so in the future.




15
   http://vbn.aau.dk/research/jc_christensen_en_biografi(2510548)/
16                                                                                                           nd
   J.C. Christensen http://www.aau.dk/Forskning/Populaervidenskab/arkiv/1887705 visited Tuesday September 22
at 15:45.
17                                                                                    nd
   http://en.wikipedia.org/wiki/Dwight_D._Eisenhower last visited Tuesday September 22 at 15:30.



Kristine Fischer Hansen                                                                                  Page 20
                                             Management Organization



List of consulted works
i
    http://en.wikipedia.org/wiki/Scientific_management      14:01 September 10th 2009




Kristine Fischer Hansen                                                                 Page 21

								
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