Essentials of Contemporary Management

Chapter

Who Are Managers and Entrepreneurs?

PowerPoint Presentation by Charlie Cook
Copyright The McGraw-Hill Companies, Inc., 2004. All rights reserved.

Learning Objectives
After studying the chapter, you should be able to:
Distinguish between entrepreneurship and management. Describe the various personality traits that affect how managers and entrepreneurs think, feel, and behave.

Understand the personal characteristics of entrepreneurs.

Explain what values, attitudes, and moods and emotions are, and describe their impact on managerial action. Define organizational culture, and explain the role managers and entrepreneurs play in creating it.
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Entrepreneurship
Entrepreneurship
The mobilization of resources to take advantage of an opportunity to provide customers with new and improved goods and services. Entrepreneurship differs from management:
Management encompasses all the decision making necessary to plan, organize, lead, and control resources.

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Entrepreneurs
Entrepreneurs
Individuals who notice opportunities and take the responsibility for mobilizing the resources necessary to produce new and improved goods and services.
Entrepreneurs start new businesses and carry out all of the management functions. Entrepreneurs assume all of the risks for losses and receive all of the returns (profits) from their ventures.

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Entrepreneurship (contd)
Intrapreneurs
Individuals (managers, scientists, or researchers) who work inside an existing organization and notice an opportunity for product improvements and are responsible for managing the product development process.
Intrapreneurs frustrated with the lack of support or opportunity at their firm often leave and form their own new ventures.

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Personality Traits
Personality Traits
Enduring tendencies to feel, think, and act in certain ways Characteristics that influence how people think, feel and behave on and off the job

The personalities of managers account for the different approaches that managers adopt to management.
Traits are viewed as continuums (from high to low) along which individuals fall.

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The Big Five Personality Traits

Figure 2.1
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The Big Five Personality Traits (contd)

Extroversion
The tendency to experience positive emotions and moods and to feel good about oneself and the rest of the world.
Managers high on this trait are sociable and friendly.

Negative Affectivity
The tendency to experience negative emotions and moods, to feel distressed, and to be critical of oneself and others.
Managers high on this trait are often critical and feel angry with others and themselves.
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The Big Five Personality Traits (contd)

Agreeableness
The tendency to get along well with other people.
Managers high on this trait are likable, and care about others.

Conscientiousness
The tendency to be careful, scrupulous, and persevering.

Openness to Experience
The tendency to be original, have broad interests, to be open to a wide range of stimuli, be daring, and take risks.
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A Measure of Negative Affectivity

Source: Tellegen, Brief Manual for the Differential Personality Questionnaire (unpublished manuscript, University of Minnesota, 1982).

Figure 2.2
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Traits and Managers

Successful managers vary widely on the Big Five.
It is important to understand these traits since it helps explain a managers approach to planning, leading, organizing, and controlling.

Managers should also be aware of their own style and try to tone down problem areas.

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Other Personality Traits

Internal Locus of Control
The tendency to locate responsibility for ones own fate within oneself.
People believe they are responsible for their fate and see their actions as important to achieving goals.

External Locus of Control

The tendency to locate responsibility for ones fate within outside forces and to believe that ones own behavior has little impact on outcomes.
People believe external forces decide their fate and their actions make little difference.
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Other Personality Traits (contd)

Self-Esteem
The degree to which people feel good about themselves and abilities.
High self-esteem causes a person to feel competent, and capable.

Persons with low self-esteem have poor opinions of themselves and their abilities.

Need for Achievement

The extent to which an individual has a strong desire to perform challenging tasks well and meet personal standards for excellence.
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Other Personality Traits (contd)

Need for Affiliation
The extent to which an individual is concerned about establishing and maintaining good interpersonal relations, being liked, and having other people get along.

Need for Power

The extent to which an individual desires to control or influence others.

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Who are Entrepreneurs?

Characteristics of entrepreneursmost share these common traits:
Open to experience: they are original thinkers and take risks. Internal locus of control: they take responsibility for their own actions. High self-esteem: they feel competent and capable. High need for achievement: they set high goals and enjoy working toward them.

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Values, Attitudes, and Moods and Emotions

Values
Describe what managers try to achieve through work and how they think they should behave.

Attitudes
Capture managers thoughts and feelings about their specific jobs and organizations.

Moods and Emotions

Encompass how managers actually feel when they are managing.

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Values: Terminal and Instrumental

Terminal Values
A personal conviction about life-long goals
A sense of accomplishment, equality, and selfrespect.

Instrumental Values
A personal conviction about desired modes of conduct or ways of behaving
Being hard-working, broadminded, capable.

Value System
The terminal and instrumental values that are the guiding principles in an individuals life.
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Terminal and Instrumental Values

Source: Rokeach, The Nature of Human Values (New York: Free Press, 1973).

Figure 2.3
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Attitudes
Attitudes
A collection of feelings and beliefs.

Job Satisfaction
A collection of feelings and beliefs that managers have about their current jobs.
Managers high on job satisfaction have a positive view of their jobs. Levels of job satisfaction tend increase as managers move up in the hierarchy in an organization.

Devotion to work
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Sample Items from Two Measures of Satisfaction

-2 -1

1 2

Source: R.B. Dunham and J. B. Herman, Development of a Female Face Scale for Measuring Job Satisfaction. Journal of Applied Psychology 60 (1975): 62931.

Figure 2.4
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Attitudes (contd)
Organizational Citizenship Behaviors
Behaviors that are not required of organizational members but that help the firm in gaining a competitive advantage.
Managers with high satisfaction are more likely perform these above and beyond the call of duty behaviors. Managers who are satisfied with their jobs are less likely to quit.

The Isolated, or unappreciated feeling

Emphasis of theory Z
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Attitudes (contd)
Organizational Commitment
The collection of feelings and beliefs that managers have about their organization as a whole
Committed managers are loyal to and are proud of their firms.

Commitment can lead to a strong organizational culture.

Commitment helps managers perform their figurehead and spokesperson roles.

The commitment of international managers is affected by job security and personal mobility.

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A Measure of Organizational Commitment

Source: L. W. Porter and F. J. Smith, Organizational Commitment Questionnaire, in J. D. Cook, S. J. Hepworth, T. D. Wall, and P. B. Warr, eds., The Experience of Work: A Compendium and Review of 249 Measures and Their Use (New York: Academic Press, 1981), 8486.

Figure 2.5
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Moods and Emotions

Mood
A feeling or state of mind.
Positive moods provide excitement, elation, and enthusiasm. Negative moods lead to fear, distress, and nervousness. Current situations and a person's basic outlook affect a persons current mood.

A managers mood affects their treatment of others and how others respond to them.
Subordinates perform better and relate better to managers who are in a positive mood.
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A Measure of Positive and Negative Mood at Work

Source: A. P. Brief, M. J. Burke, J. M. George, B. Robinson, and J. Webster, Should Negative Affectivity Remain an Unmeasured Variable in the Study of Job Stress? Journal of Applied Psychology 73 (1988): 19398.

Figure 2.6

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Emotional Intelligence
Emotional Intelligence
The ability to understand and manage ones own moods and emotions and the moods and emotions of other people.
Assists managers in coping with their own emotions.

Helps managers carry out their interpersonal roles of figurehead, leader, and liaison.

EQ: Emotion Quotient

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Organizational Culture
Organizational Culture
The set of shared values, norms, standards for behavior, and shared expectations that influence the way in which individuals, groups, and teams interact with each other and cooperate to achieve organizational goals.

Attraction-Selection-Attrition Framework
A model that explains how personality may influence organizational culture.
Founders of firms tend to hire employees whose personalities that are to their own, which may or may not benefit the organization over the long-term.
Copyright 2004 McGraw-Hill. All rights reserved. 227