BUS 150 EXAM 2

Experts have estimated that US companies use rational decision-making techniques less than ____ % of the time.

20

What can be included in a mission statement?

An organization's mission is a statement of its fundamental, unique purpose that sets it apart from other firms of the same type. The mission also identifies the scope of the business's operations in product and market terms.

Define distinctive competence

an organizational strength possessed by only a small number of competing firms.

How does the GE Business Screen differ?

focuses more on businesses competitive position and industry attractiveness.

state of uncertainty

he manager knows neither all the alternatives, nor their associated risks, nor their likely outcomes.

What is resource deployment?

how an organization distributes its resources across the areas in which it competes

Bounded rationality

suggests that decision makers are limited by their values and unconscious reflexes, skills, and habits. They are also limited by less-than-complete information and knowledge

The goals that are directly based on the strategic goals and plans are the

tactical goals

State of Risk

the availability of each alternative and its pros and cons have associated probability estimates

state of certainty

the decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative

What is a contingency plan?

the determination of alternative courses of action to be taken if an intended plan of action is unexpectedly disrupted or rendered inappropriate.

Escalation of commitment

-occurs when managers make a decision and become so committed to it that they stay with it even when it appears to have been wrong. This happens because managers do not want to be inconsistent or admit to an initial error

List the steps of the rational decision making process.

1. Recognizing and defining the decision situation 2. Identifying alternatives 3. Selecting an alternative 4. Implementing the chosen alternative 5. Following up and evaluating the results

What percent of US business are small?

85%

What does a cash budget help the business to do?

A cash budget tells entrepreneurs/businesses how much money they need before they open for business and how much money they need to keep the business operating.

Give an example of a programmed and a nonprogrammed decision

A programmed decision is one that is fairly structured or recurs with some frequency (or both). Ex. Each Starbucks coffee shop uses programmed decisions to order new supplies of coffee beans, cups, and napkins, and Starbucks employees are trained in exact procedures for brewing coffee. Nonprogrammed decisions are relatively unstructured and occur much less often than a programmed decision. Ex. Disney's decision to buy Fox was a nonprogrammed decision.

Describe the relationship between small and large businesses?

A symbiotic relationship exists between large and small businesses in that they benefit from each other

The ___ model and other behavioral aspects identify how decisions are usually made

Administrative

To manage diversification, ___ management analysis is used to assess performance

BCG Matrix

What are the important parts of the business plan?

Business plans should answer the questions: What are the entrepreneur's goals and objectives? What strategies will the entrepreneur use to obtain these goals and objectives? How will the entrepreneur implement these strategies? Business plans should also include the entrepreneur's qualifications for this particular business, his or her sales and other forecasts, and information about financial planning.

Rational decision-making is identified with the

Classical decision model

What two types of groups rely on expert opinions?

Delphi groups and nominal groups

Define each of Porter's three generic strategies.

Differentiation strategy- a strategy in which an organization seeks to distinguish itself from competitors through the quality of its products or services. Overall Cost Leadership Strategy- a strategy in which an organization attempts to gain a competitive advantage by reducing its costs below the costs of competing firms Focus Strategy- A strategy in which an organization concentrates on a specific regional market, product line, or group of buyers.

Large businesses have ________ of scale to achieve efficiencies.

Economies

The most common form of decision making group is the

Interacting groups and teams

What types of performance does the BCG matrix assess?

Market growth rate and relative market share.

Identify advantages of group team decision making

More information and knowledge are available. More alternatives are likely to be generated. More acceptance of the final decision is likely. Enhanced communication of the decision may result. Better decisions generally emerge.

What is a niche--as in market niche or product niche?

Niche is a segment of a market not currently being exploited.

What is the product life cycle?

Product life cycle is a model that portrays how sales volume for products changes over the life of products

The starting point in formulating strategy is usually the _____ analysis.

SWOT

Define each of the types of operational plans

Single-use plan- Developed to carry out a course of action not likely to be repeated in the future Program- Single-use plan for a large set of activities Project- Single-use plan of less scope and complexity than a program Standing plan- Developed for activities that recur regularly over a period of time Policy- Standing plan specifying the organization's general response to a designated problem or situation Standard operating procedure- Standing plan outlining steps to be followed in particular circumstances Rules and regulations- Standing plans describing exactly how specific activities are to be carried out

What are the different kinds of goals?

Strategic Goals Tactical Goals Operational Goals

Define diversification.

The number of different businesses that the organization is engaged in and the extent to which this businesses as related to one another.

Identify disadvantages of group team decision making

The process takes longer than individual decision making, so it is costlier. Compromise decisions resulting from indecisiveness may emerge. One person may dominate the group. Groupthink may occur.

Which level of management is responsible for which kind of goal?

Top management is responsible for Strategic Goals Middle Management is responsible for Tactical Goals Lower-level Management is responsible for Operational Goals

business plan

a formal written document that describes the nature of a business and how it will operate

The four purposes of goals are to:

a) provide guidance and a unified direction for people in the organization b) promote good planning c) motivate employees d) provide an effective mechanism for evaluation and control organizations have several different kinds of goals.

Define small business.

business that is privately owned by one individual or a small group of individuals and has revenues and assets that are not large enough to influence its environment.

Name the stages of the product life cycle

introduction, growth, maturity, decline

Intuition

is an innate belief about something, without conscious consideration. Managers may sometimes seem to make decisions based purely on intuition, in reality they are also relying on their experience, judgment, and other resources

satisficing

is the tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency. Decision makers satisfice when they do not conduct an exhaustive search for the best possible alternative

Operational Goals

set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals

Tactical Goals

set by and for middle managers and focus on the actions needed to achieve strategic goals

Strategic Goals

set by and for top management and focus on objectives for the organization as a whole

Business level strategy is often called SBU strategy. What do the letters SBU stand for?

strategic business unit

Tactical plans are directly based on the

strategic plans and tactical goals

Most of the major decision-making is done under a state of ___

uncertainty