Management Exam 2 (C. 5-8)

Optimal decision in Classical model?

most appropriate decision in light of what managers believe to be the most desirable consequences for the organization

The manager of Inman, a convenience store, keeps track of the average sale amount for each customer as a way of deciding on the product mix to be carried in the store. This is an example of ____________ control. a. MBO b. output c. feedforward d. input

output

The cluster of decisions that managers make to assist the organization to achieve its goals is known as: a. strategy b. scenario planning c. organizing d. implementation e. related diversification

strategy

A formal agreement that commits two or more companies to exchange or share their resources in order to produce and market a product is known as a(n) _________ a. outsourcing alliance b. task force alliance c. strategic alliance d. market structure alliance

strategic alliance

Mental models

sophisticated ways of thinking

Why do people resist change? Explain how the type of culture an organization has affects how it changes.

#1 reason is fear; requires you to learn and do new things, we enjoy comfort, enacts a sense of control || the more adaptive the culture, the more we just get used to change

Horizontal vs. vertical integration? why used?

*Import/Export: high cost, total control, low risk *Licensing/Franchising: low cost, control and risk depends on contract *Strategic Alliances: low cost, lose control, risk goes up and down *Joint venture: cost, control, and risk stay the same *Wholly owned foreign subsidiaries: initial high cost then go down, great control, high risk

Discuss why planning is important to managers within the organization?

- gets managers to participate in decision making - gives organization its sense of direction and purpose - helps managers coordinate their actions - provides control over the performance of managers

Planning process

- identify and select appropriate goals and courses of action (1) determine organization's mission and goals (2) formulate a strategy (3) implement strategy

Decision Making? Types?

- process by which managers respond to opportunities and threats by analyzing options and making determinations about specific organizational goals and courses of action *programmed: routine, virtually automatic process *non programmed: non routine decision making occurs in response to unusual, unpredictable opportunities and threats *classical model: prescriptive approach based on assumption that decision maker can identify and evaluate all possible alternatives and their consequences *administrative: approach that explains why decision making is inherently uncertain and risky and why managers usually make satisfactory rather than optimum decisions

Discuss the advantages and disadvantages of a functional structure of organization. How does the effectiveness of a functional structure change as an operation grows?

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Geographic structure

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Bureaucratic control

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What is meant by a SWOT analysis?

A SWOT analysis determines a company's internal strengths and weaknesses, as well as its external opportunities and threats, allowing a business to capitalize upon its strengths and opportunities and minimize its weaknesses and threats.

Advantages and Disadvantages of output control systems:

Advantages: easy, provide lots of data Disadvantages: expensive, time consuming, loss of product (don't know product is bad until the end), doesn't provide motivation/direction

Advantages and Disadvantages of group decision-making:

Advantages: more ideas, more talent, more knowledge, more commitment Disadvantages: Too much time needed, blame game, run the risk of group think

Current ratio =

CA/CL

Levels/processes of planning? (corp...

Corporate planning: mission, big picture, what value, long term planning (CEO, President) Business planning: intermediate timed planning, take mission and form into divisions Department/Functional planning: form strategies into implementation plan (manufacturing, marketing, R&D)

Entrepreneur vs. Intrapreneur? Why important?

Entrepreneur: individual who notice opportunities and decide how to mobilize resources necessary to produce new and improved goods and services -- take action, leaders of change Intrapreneur: employees of existing organizations who notice opportunities to develop new/improved products and better ways to make them

Example of each part of a SWOT analysis for a packaged good?

Mac-n-Cheese ========================

MBO control

Management by objective -------

Different ways to promote interpreneurship?

Product Champion - manager leads and provides vision for all parts of product Skunkworks - group secluded and pushed to devote all attention to developing new products Rewards for innovation - bonuses

Types of organizational structures? Why use them?

Product structure: each product line or business is handled by self-contained division Geographic structure: each region of country or area of world served by self-contained division Matrix structure: simultaneously groups people and resources by function and by product Market structure: each kind of customer is served by self-contained division; AKA customer structure Product team structure: does away with dual reporting and functional employee permanently assigned to cross-functional team that is empowered

Example of profit ratio

ROI (return on investment)

Which of the following results when the organization's net income before taxes divided by total assets figure for the organization?

Return on investment

A group of managers at Power Explosives analyzes both internal strengths and weaknesses of their organization as well as the opportunities and threats of the external environment. Which of the following planning exercises does this indicate? a. mission analysis b. SWOT analysis c. functional analysis d. diversification

SWOT analysis

SWOT Analysis - Porter's 5 forces?

SWOT: identify internals strengths and weaknesses, external opportunities and threats 5 Forces: (1) level of rivalry among organizations (2) potential for entry into industry (3) power of large suppliers (4) power of large customers (5) threat of substitute products

When the meaning of the info available to a manger is unclear and can be interpreted in several ways, the info is __________. a. certain b. ambiguous c. bounded d. irrational

ambiguous

Which of the following explains the reasons for the inherently uncertain and risky nature of decision making and the making of satisfactory rather than optimum decisions by the managers? a. logical model b. administrative model c. perspective model d. rational model

administrative model

Advantages and disadvantages of international strategies?

advantages: efficiency, phase release of products in life cycle disadvantages: macroeconomic risk (not a one size fits all approach), change of employment and organization laws country to country

Feedforward control

anticipate changes to happen in future

In the administrative model of decision making, when the number of possible alternatives to a decision is so large that the manager can't possibly evaluate all of them before making a decision, which of the following has occurred? a. satisficing b. bounded rationality c. brainstorming d. devil's advocacy e. optimum decision making

bounded rationality

Centralized vs. Decentralized?

centralized: few making decisions decentralized: many making decisions

Shared vision

common model used by all to frame problems/opportunities

At which step of the control process do managers evaluate whether the actual performance of the organization differs significantly from the standards of performance being used to assess the performance of the organization? a. measure actual performance b. compare actual performance to the standards c. establish the standards of performance d. initiate corrective action e. measure standards of performance

compare actual performance to the standards

The control system that managers use at the conversion stage of transforming raw materials into finished goods is _________ control. a. concurrent b. feedforward c. bureaucratic d. feedback

concurrent (control during)

SynVens, a major retail chain in Hungary, is planning to diversify. It plans to enter the textile industry, and it aims to be first or second in market share in this industry in five years. This is an example of a __________-level plan strategy. a. business b. corporate c. functional d. divisional

corporate

Devil's advocacy?

critical analysis of preferred alternative, made in response to challenges raised by group member who defends unpopular/opposing alternatives for sake of argument

Examples of liquidity ratios

current ratio (CA/CL); quick ratio

Feedback control

customers' reactions to information; end of process

Examples of liquidity ratios

debt-to-assets; time-covered ratios

Risk

degree of probability that the possible outcomes of a particular course of action will occur

Leverage ratios measure ____

degree to which managers use debt or equity to finance ongoing operations

Coca-Cola spends an enormous amount of money to try to convince consumers that its product is better than its competitors. Which of the following strategy is Coca-Cola pursuing? a. diversification b. focused low-cost c. differentiation d. low-cost e. market development

differentiation

Product Team Structure

does away with dual reporting relationships and two-boss employees, and functional employees permanently assigned to cross-functional team that is empowered to bring new/redesigned product to market

Market structure

each kind of customer is served by a self-contained division -- also called customer structure

Product structure

each product line or business is handled by a self-contained individual

Geographic structure

each region of country or area of world is served by self-contained division

Esteban, a manager, performs a financial analysis of several investment alternatives in order to determine which is the most likely to impact the organization's profitability. This manager is focusing on which criterion for decision-making? a. practicality b. ethicalness c. economic feasibility d. dialectical inquiry e. legality

economic feasibility

Personal mastery

experiment, create, explore, freedom to do what you want

Hanover Insurance sets up a management information system (MIS) that gives its regional managers information about changes in the task environment that may affect the organization at some future time. This is an example of: a. feedforward control b. concurrent control c. feedback control d. bureaucratic control e. MBO control

feedforward control (anticipate changes in future)

Centralized

few people making decisions

The planning process for an organization should be an ongoing process in which managers refine previous plans and modify these plans at all levels of the organization. Another way of saying this is that the plans should have: a. continuity b. flexibility c. accuracy d. unity e. synergy

flexibility

Differentiation strategy successful in ____ structure that values ____

flexible/innovation

Organizational Structure

formal system of task and reporting relationships that coordinate and motivate organizational members so that they work together to achieve organizational goals

Low-cost strategy successful in ____ with ____ norms

formal/conservative

Which level of a large organization contains the organization's marketing department, R&D department, and human resources department? a. functional b. first-line c. corporate d. business e. divisional

functional

Federal Express Corporation organizes its managers according to the different regions of the world in which the managers work. This is an example of which type of organizational structure? a. market structure b. customers structure c. product structure d. matrix structure e. geographic structure

geographic structure

Why is it important to have predetermined criteria?

have a comparison for the data/info gathered, allow for improvement

Profit ratios measure _____

how efficiently managers using organization's resources to generate profit

Span of management/control

how many people can efficiently and effectively manage (ideal number depends on person)

Span of management?

how many people one can effectively and efficiently manage, ideal number depends on the person

Activity ratios show ____

how well managers creating value from organizational assets

Liquidity ratios measure ____

how well managers have protected organizational resources to be able to meet short-term obligations

Concurrent control

immediate feedback on inputs transformed to outputs; feedback as happens

Job enrichment?

increase number of different tasks in given job by changing division of labor

The goal of job enlargement is to a. increase both scope of a job and salaries b. increase range of tasks, and thus reduce boredom c. increase quality assurance measures, thereby reducing mistakes d. increase quantity of work assigned and thus reduce manpower

increase range of tasks, and thus reduce boredom

Examples of activity ratios

inventory turnover; days sales outstanding

Managers should design flexible structures, characterized by decentralized authority and empowered employees, for their organization when: a. its environment is stable b. its technology is simple c. its workforce is highly skilled d. its strategy is well understood e. its strategy is simple

its workforce is highly skilled

The process by which managers decide how to divide into specific jobs the tasks that have to be performed to provide customers with goods and services is known as: a. job design b. job enlargement c. task significance d. mass-production technology e. job enrichment

job design

Team Learning

learning takes place in groups/teams

Chain of command

links authority (all positions and elements)

Decentralized

lots of people making decisions

Strategy types?

low-cost strategy: driving organization's costs down below costs of rivals (Mc.D's, WalMart) differentiation strategy: distinguishing organization's products from products of competitors "stuck in the middle": tend to have lower levels of performance than do those that pursue low-cost or differentiation strategy focused low-cost strategy: serving only one segment of overall market and trying to be the lowest-cost organization serving that segment focused differentiation strategy: serving only one segment of overall market and trying to be most differentiated organization serving that segment diversification: expand operations into new industry in order to produce new kinds of valuable goods/services

The classical model assumes that:

managers have access to all the info they need to make the optimum decision

Systems Thinking

managers must recognize effects of one level of learning on another

At Cosmeto & Co., Pat is assigned to a team to develop a new kind of shampoo. He reports to both the marketing manager and the personal care product manager. The organization is pursuing a _________ organizational structure. a. geographic b. matrix c. global product d. customer

matrix

A manager challenges his subordinates to "think outside the box" to improve the way the unit does its work. This managers is focusing on the _______ of creating a learning organization. a. personal mastery b. mental models c. team learning d. shared vision e. systems thinking

mental models

The process by which managers establish the structure of working relationship among workers of the organizations is known as: a. planning b. leading c. organizing d. controlling e. the span of control

organizing

Learning organization? Linked to creativity?

organization in which managers try to maximize the ability of individuals/groups to think and behave creatively and thus maximize potential for organizational learning to take place -- creativity: decision maker's ability to discover original and novel ideas that lead to feasible alternative courses of action

Four Factors to Organizational Design?

organizational environment (changing vs. stable), strategy (which matches structure), technology, human resources

4 building blocks of organizational structure?

organizational environment, strategy, technology, human resources

In MBO, which of the following is established first? a. evaluations b. organizational objectives c. managers' goals d. subordinates' goals e. performance appraisals

organizational objectives

Functional Structure

organizational structure composed of all departments that an organization requires to produce goods/services

Divisional Structure

organizational structure composed of separate business units with which are the functions that work together to produce a specific product for a specific consumer (product, geographic, market)

Matrix Structure

organizational structure that simultaneously groups people and resources by function and by product

job design? how can be used?

process by which managers decide how to divide tasks into specific jobs

What is controlling?

process whereby managers monitor and regulate how efficiently and effectively an organization and its members are performing activities necessary to achieve organizational goals

An organization's accounting department decides to send out a bill to a new customer. What type of decision does this represent? a. programmed b. nonprogrammed c. intuitive d. groupthink e. bounded rationality

programmed

Decisions that have been made many times in the past and for which managers have rules and guidelines about how to make similar decisions in the future are known as _______ decisions. a. nonprogrammed b. heuristic c. programmed d. intuitive

programmed

Satisficing

searching for and choosing an acceptable, or satisfactory, response to its problems and opportunities, rather than trying to make the best decision

According to the Job Characteristics Model, list and define the characteristics that determine how motivating the job is. Give examples for each:

skill variety: extent to which job requires employee to use wide range of different skills, abilities, and knowledge task identity: extent to which requires worker perform all tasks necessary to complete the job task significance: degree to which worker feels job is meaningful because of its effects on people inside organization autonomy: degree to which job gives employee freedom and discretion feedback: extent to which actually doing job provides worker with clear and direct info about performance

Managers at Dimensions, Inc., analyze the current situation of their organization and then develop plans to help their organization accomplish its mission and achieve its goals. This is known as ________. a. synergy planning b. strategy formulation c. functional planning d. SWOT analysis

strategy formulation

Organizational _________ is the formal system of task and job reporting relationships that determines how employees use resources to achieve organizational goals. a. design b. goals c. structure d. culture

structure

The degree to which a manger feels that his or her job is meaningful because of the way in which the jobs affects other people is known as: a. skill variety b. feedback c. autonomy d. task significance e. task identity

task significance

Synergy?

the interaction or cooperation of two or more organizations, substances, or other agents to produce a combined effect greater than the sum of their separate effects

While conducting a SWOT analysis, "slower market growth" would be categorized under which of the following? a. strength b. weakness c. opportunity d. threat e. alternative

threat - slower market growth is external, and it is not an opportunity, so it must be a threat

Dialectical inquiry?

type of qualitative research method, where various ideas and perspectives are tested

Unity of command vs. chain of command

unity of command: the purpose of ensuring unity of effort under one responsible person (or commander) for completing a task chain of command: links authority (all positions and elements)