MGT 491 Exam 3

Incremental product launch (12)

Incremental launch is less risky because it requires fewer resources and serves as a market test.

Know whether stockholders are internal or external stakeholders (9)

Stockholders are internal stakeholders, because they own or work for the business.

Traditional vs. Contemporary approaches to strategic control (9)

Traditional: strategies are *formulated* and top management set goals. strategies are *implemented*, and performance is measured against he predetermined goal set *(strategic control, evaluate)*. Contemporary: information control is part of an ongoing process of organizational learning and continuously updates and challenges the assumptions that underlie the organization's strategy.

Know the key elements of the learning organization

*Create a proactive, creative approach to the unknown* 1) Inspiring and motivating people with a mission or purpose. 2) Empowering employees at all levels. 3) Accumulation and sharing internal knowledge (not always easy) 4) Gathering and integrating external information. 5) Challenging the status quo and enabling creativity.

Know the relationship between ethical or unethical leadership behavior and employee effort (11)

*Ethics has everything to do with leadership* Ethics is as much an organizational as a personal issue. Leaders who fail to provide proper leadership to institute proper systems and controls that facilitate ethical conduct share responsibility with those who conceive, execute, and knowingly benefit from corporate misdeeds.

CEO duality and the arguments for and against (9)

*Should the CEO also be the chairman of the board of directors?* -->The key issue is what implications CEO duality has for firm governance and performance. (+) when one person holds both roles, he/she is able to act more efficiently and effectively (+) smoother, more effective decision making (-) separation of power (-) complicates the issue of CEO succession

Know the multiple parts of EI (11)

*The capacity for recognizing one's own emotions and those of others* (Self-management skills) 1) Self-awareness 2) Self-regulation 3) Motivation (Managing relationships) 4) Empathy 5) Social skill

Understand the purpose of business incubators (12)

*designed to "hatch" new businesses* -->Funding --> Phisycial space -->Business services

Understand the issues involved in separating owners and management (9)

1) agency problem -->conflicting goals of principals and agents, along with the difficulty of principals to monitor the agents -->the different attitudes and preferences toward risk of principals and agents 2)The problem of risk sharing

Know the 4 elements of the balanced scorecard (12)

1) customer perspective 2) Internal business perspective 3) Innovation and learning perspective 4) Financial perspective

Universities are a good example of a learning organization

FALSE. It takes forever for change to take place

Know the duties of the BOD (9)

1) select, regularly evaluate, and replace the CEO. Determine management compensation. Review succession planning. 2) Review, and approve the financial objectives, major strategies, and plans of the corporation. 3) Provide advice and counsel to top management. 4) Select and recommend to shareholders for election an appropriate slate of candidates for the BOD; evaluate board processes and performance. 5) Review the adequacy of the systems to comply with all applicable laws/regulations.

Know the primary participants in corporate governance (9)

1) shareholders 2) management 3) the board of directors

Know the % of companies with succession plans (9)

35% of 1,318 executives said their companies had a succession plan.

ADP Model 39+1

39 hours of work; 1 hour to stop and think objectively about themselves and their business.

Intrapreneurship (12)

Corporate new venture creation is labeled intrapreneurship because it refers to building entrepreneurial business WITHIN existing corporations.

Adv/Disadv. of the functional-based, product/service-based, and matrix forms of org. structure (10)

Functional: concentrate efforts on both increasing efficiency and enhancing its operations and products. -->production, marketing, R&D, and accounting -->single/closely related product or service -->owner will not be skilled in all specialties (+) enhance coordination/control within each of the functional areas (+) decision making is centralized (+) more efficient use of managerial/technical talent (+) career paths/professional develp. in specialized areas are facilitated (-) differences in funcational area orientation impede communication and coordination (-) short-term thinking (-) difficult to estab. uniform performance standards (-) functional area conflicts may overburden top-level decision makers Product/service: an org. form in which products, projects, or product markets are group internally. (+) separation of strategic/operating control (+) quick response to env. changes (+) increase focus on products/markets (+) minimize problems associated with sharing resources across functional areas (+) facilitate devel. of general managers (-) can be very expensive (-) dysfunctional competition among divisions (-) difficult to maintain uniform corporate image (-) overemphasis on short-term perf. Matrix: an org. form in which there are multiple lines of authority and some individuals report to at least two managers. (+) increase market responsiveness through collaboration and synergies among professional colleagues (+) facilities the use of specialized personnel, equipment, and facilities (+) resources are shared (+) flexible (-) dual-reporting structures can result in uncertainty (-) working relationships becomes more complicated (-) decisions making may not be timely

Understand how universities and government can serve as innovation partners (12)

Government- Each year the government issues requests for proposals (RFP's) asking for private companies for assistance in improving services or finding solutions to public problems. Universities- Take the chip-maker Intel they have benefited from underwriting susbstantion amounts of university research. Instead of just giving them a blank check, Intel bargains for the rights to patents that emerge from Intel- Sponsored research. The University retains the patent but Intel gets royalty-free use of it.

Know why high executive compensation can be good for the company (9)

Most large firms structure the pay packages of their top executives so that the CEO and other senior executives' pay is tied to firm performance. -->large part of their pay is stock-based -->Bonuses are conditional of performance targets

Understand the relationship between org. culture and org. strategy (9)

Org. Culture: *a system of shared values and beliefs that shape a company's people org. structures, ad control systems to produce behavioral norms.* -->It can work for you OR against you -->reducing monitoring costs -->rewards = carrots, rules and threats = sticks Org. culture can have impacts on the strategy, Certain cultures fit better in certain roles, and if everyone shares the culture they can work better on the strategy.

Six bases of power (11)

Organizational bases of power: legitimate, reward, coercive, and information. Personal bases of power: referent and expert Legitimate: derived from org. conferred decision-making authority and is exercised by virtue of a manager's position in the org. *(authority power)* Reward: depends on the ability of the leader or manager to confer rewards for positive behaviors or outcomes. Coercive: power a manager exercises over employees using fear of punishment for errors. *(threatening power)* Information: comes from a manager's access, control, and distribution of information that is not freely available to everyone in the org. Referent: a subordinate's identification with the leader. *(ability to influence)* Expert: the leader's expertise and *knowledge*.

Product-based vs. Process-based innovation (12)

Product: (focused on the product): efforts to create product designs and applications of technology to develop new products for end users. -->More common during the earlier states of an industry's life cycle Process: (same product, change the way its made): efforts to improve the efficiency of org. processes, especially manufacturing systems and operations. -->more likely to occur in the later stages of an industry's life cycle

Understand why some org. need more rules/regulations than other org. (9)

Rule based controls are most appropriate when: --> Environments are stable and predicable -->employees are unskilled and interchangeable -->consistency in product and service is critical -->the risk of malfeasance is extremely high Help an org. conduction business in an ethical manner.

Understand the typical affect of a company's stock when a shareholder activist gets involved with the company (9)

Shareholder activism: *actions by large shareholders to protect their interests when they feel that managerial actions of a corporation diverge from shareholder value maximization* -->a company's stock typically goes up -->Shareholder activism leads to superior performance in the company

Relationship between short-term and long-term objectives (9)

Short-term: they represent boundaries that help to allocate resources in optimal manner and to channel the efforts of employees at all levels. -->specific/measurable --> include a specific time -->be achievable Some companies have a long term vision that focuses on the company lasting forever rather then just fixing short term issues. You want the short term ones to be good, but also something that will insure the company lasts for years.

Single Loop learning vs. double loop learning (9)

Single: *environment is stable and relatively simple* <--Formulate strategies-->Implement strategies-->Strategic control (evaluate)--> Double: *time lags are dramatically shortened* Formulate<-->implement<-->strategic<-->formulate

Benchmarking seeks out the best examples of particular practices

TRUE

Know what % of the ability to innovate is innate (12)

The ability to innovate is not hard-wired into our brains 1/3 is genetic 2/3 is developed over time

Know how successful entrepreneurs minimize risk (12) NEED HELP!

The best run companies investigate the consequences of various opportunities and create scenarios of likely outcomes. A key to managing Entrepreneurial risk is: -To evaluate new venture opportunities thoroughly enough to reduce the uncertainty surrounding them. Risk-Taking Techniques: 1- Research and assess risk factors to minimize uncertainty--Companies "do their homework" before taking any new risk 2- Use techniques that have worked in other domains.--Risky methods that other companies have tried may provide an avenue for advancing company goals.

Understand the org. responsibility for an ind. member's unethical behavior (11)

The company should not bear any responsibility for individuals misdeeds. FALSE! *Ind. misdeeds SHOULD reflect on the company*

Understand why interviews are subjective (9)

You are interviewed by many people and sometimes their own personal preference gets in the way of hiring good people.