Lektion 3 - Managers, human behavior and organizations

Question 1

(!) Describe the economic model of human behavior?

Answer 1

People seen as rational and maximizing utility

Main motivator for time and efforts is monetary payments

Refers to agency theory:
- Focus on output controls such as monetary rewards

Question 2

(!) Describe the sociological model of human behavior

Answer 2

People as members of groups in which certain rules and patterns of behaviour exist

Focus on the collective the individuals belongs to:

• Culture: Rituals or dresscode
• Imitative behavior: Reading same books
• Formal and informal power: Doctors at hospitals have the power

Question 3

(!) Describe the psychological model of human behavior

Answer 3

Two general drivers:

• Beliefs: Constitute our knowledge about the world
• Desires: Constitute how we want the world to be

Another element:
- Motivation: Direction, amount and persistence of effort that people exert towards certain personal or professional objectives. (Refers to goal-setting theory and automatic drivers of motivation)

Question 4

Describe the goal-setting theory

Answer 4

• Motivates people by clear and challenging goals
• Goals either stated by themselves or superiors
• Need of sufficient personal and organizational ressources to reach the goal
• Importance of self-efficacy
• May be less powerful if no reward (Economic argument)

Question 5

What is meant by human cognition?

Answer 5

• The way people observe and understand the world
• How people digest information
• How people learn by changing beliefs
• How people make sense of complex situations

Question 6

What is meant by motivation?

Answer 6

Motivation is a combination of effort, direction and persistence of human effort

• Effort: Amount of time and energy spend on performing a specific activity
• Direction: Spending effort in the right direction
• Persistence: Duration of effort

Question 7

(!) Describe principal 1 of management control systems

Answer 7

Management control systems should motivate managers and employees:

• Managers and employees should be motivated by the goals that they are asked to achieve
• Managers and employees should be motivated by the rewards they may get from their efforts

Question 8

(!) Describe principal 2 of management control systems

Answer 8

Management control systems should consider managerial and employee abilities and inabilities

• Managers and employees should be encouraged to learn and innovate
• Managers and employees’ tacit knowledge should be cherished
• Managers and employees should be helped to overcome natural cognitive limitations

Question 9

(!) Describe principal 3 of management control systems

Answer 9

Management control systems should support a healthy, social and ethical environment

• Informal processes: External and internal norms
• Culture matters: Hofstede´s and minkov´s model of culture og cultural norms
• Social values matter: Interpersonal trust, empathy, organizational citizenship
• Ethics matter: Deontic-, virtue-based- and utilitarian/ consequence-based ethical reasoning

Question 10

(!) Describe Hofstede´s and minkov´s model of culture

Answer 10

Individualism-collectivism:
- Extent of people feeling independent vs. group member

Uncertainty avoidance:
- Extent that uncertainty & ambiguity are appreciated & accepted

Masculinity-femininity:

• Masculinity: Extent of positive valuing explicit power & competition
• Femininity: Extent of negative valuing explicit power & competition

Power distance:
- Extent less powerful members accept unequal distribution of power

Long-term orientation:
- Extent of future & past seen as dynamic or static

Indulgence:
- Extent of preference for being free & follow impulses

Question 11

Relate the topics to the Netflix case

Answer 11

General:

• High performance teams: Seen as pro sport team
• Input control focus: Hiring right people
• Creativity
• No controlling, just work in best interest
• Pay top of market
• Want rapid growth

__________

Explain which model is the most applicable to Netflix?
- Psychological model

___________

Are the three principles of the management control model of human applicable to Netflix?

• MCS to motivate: Already motivated
• MCS focus on abilities & inabilities: Partly
• MCS for healthy, ethical environment: Yes

___________

Map Netflix to Hofstedes and Minkovs model of culture:

Individualism-collectivism: Focus of collectivism, but also high performing individuals

Uncertainty avoidance: Do not avoid uncertainty

Masculinity-femininity: Competition main driver, not power

Power distance: No, same amount to everyone

Long-term orientation: Dynamic, flexible and adaptive

Indulgence: High