BUS 201 - CH 6

IMPLEMENTING THE CHOSE ALTERNATIVE

-key consideration is employee resistance to change -reasons for assistance includes insecurity, inconvenience, and fear of the unknown -managers must also anticipate unpredictable consequences

SELECTING THE BEST ALTERNATIVE

-managers can develop subjective estimates for choosing an alternative -multiple acceptable alternative may also be possible

FOLLOWING UP AND EVALUATING THE RESULTS

-managers evaluate effectiveness of their decision -make sure that the chosen alternative has served its original purpose -if alternative not working, could choose previously identified alternative, start the process again, or they can give original alternative time and implement in a different way

RECOGNIZING AND DEFINING THE DECISION SITUATION

-must recognize when a decision is necessary -must be some stimulus spark where either the decisions is a problem or an opportunity

MINTZBERG - DECISION MAKING ROLES

1. Entrepreneur (improving the performance of the unit) 2. Disturbance handler (responding to high-pressure disturbances, such as strike at a supplier) 3. Resource allocation (deciding who will get what in the unit) 4. Negotiator (working out agreements a wide variety of issues, such as the amount of authority an individual will be given)

MINTZBERG'S - INTERPERSONAL ROLES

1. Figurehead (duties of a ceremonial nature, such as attending a subordinates wedding) 2. Leader (being responsible for the work of the unit) 3. Liaison (making contact outside the vertical chain of command

THE PURPOSE OF GOAL SETTING

1. Goal setting provides direction, guidance, and motivation for all managers 2. Goal setting helps firms allocate resources 3. Goal setting helps to define corporate culture 4. Goal setting helps managers assess performance

PLANNING PROCESS FIVE STEPS

1. Goals are established for the organization. 2. Managers identify whether a gap exists between the company's desired and actual position 3. Managers develop plans to achieve the desired objectives 4. The plans that have been decided upon are implemented 5. The effectiveness of the plan is assessed

THREE BASIC DECISION CHARACTERISTICS MANAGERS DEAL WITH

1. Managers must make both problem decisions (there is a specific problem that must be resolved) and opportunity decisions (there is no specific problem but rather an opportunity presents itself). 2. The decisions that managers make are either programmed decisions (those that are made frequently and are highly structured) or non-programmed decisions (those that are made infrequently and are poorly structured). 3. Managers make decisions under several different risk conditions; certainty, risk, uncertainty

MINTZBERGS - INFORMATIONAL ROLES

1. Monitor (scanning the environment for relevant information) 2. Disseminator (passing information to subordinates) 3. Spokesperson (sending information to people outside the unit

THE CONTROL PROCESS

1. The management establishes standards (often for financial performance). 2. Measure actual performance each year against standards. 3. If the two amounts agree, organization continues on its present course. If vary significantly, one or the other needs adjustment.

MINTZBERGS STUDY OF THE FIVE CHIEF EXECUTIVE

1. The work an an unrelenting pace 2. Their activities are characterized by brevity, variety, and fragmentation 3. They prefer "live" action and emphasized work activities that are current, specific, and well defined 4. They are attracted to verbal media

WHAT ARE THE TWO OVERALL POINTS OF THE MANAGEMENT PROCESS?

1. the planning, organizing, leading, and controlling aspects of a manager's job are interrelated. 2. Second, there is a difference between management effectiveness and management efficiency. A manager who focuses on being effective will likely also be efficient, but a manager who focuses on being efficient may or may not be effective.

COMPETITIVE STRATEGY - business-level strategies

A plan to establish a profitable and sustainable position

VISION (OR PURPOSE)

A statement indicating why an organization exits and what kind of organization it wants to be

WHY CORPORATE CULTURE IS IMPORTANT

A strong, well-defined culture can help a business reach its goals and can influence management styles. Culture is determined by several factors, including top management, the organization's history, stories and legends, and behavioural norms. If carefully communicated and flexible enough to accommodate change, corporate culture can be managed for the betterment of the organization.

CONCEPTUAL SKILLS

Abilities to think in the abstract, diagnose and analyze various situations, and see beyond the present situation; help managers recognize new market opportunities and threats -needed on all levels of management -first-line managers need it least while top managers are most dependent on conceptual skills

MANAGEMENT EFFECTIVENESS

Achieving organizational goals that have been set (doing the right things)

MANAGEMENT EFFICIENCY

Achieving the greatest level of output with a given amount of input (doing things right)

RISK

Alternatives my be known, but their costs are simply probabilities rather than certainties

CRISIS MANAGEMENT

An organizations methods for dealing with emergencies - emergency that demands an immediate response; crisis management plans outline who will be in charge in different kinds of organizations, how the organization will respond, and the plans that exist for assembling and deploying crisis-management teams (e.g. When 2014 Malaysian Airlines flight simply disappeared)

MISSION STATEMENT

An organizations statement of how it will achieve its purpose in the environment in which it conducts its business

AN EXAMPLE OF STRATEGY FORMULATION

Bombardier Step 1 - strategy has been to compete in the small commercial jet market Step 2 - After analyzing consumer demand for air travel and the company own internal capabilities, Bombardier decided in 2004 to go head to head with Airbus and Boeing in the larger commercial jet market with the Series jet Step 3 - the company felt the strengths it developed over the years in the regional jet market would match will with the opportunities in the external environment Implementation problems -development of new plane took longer than anticipated -spend $4.4 billion on the Series jet -competitors have improved their existing planes and offers discounts -Bombardiers original decision was very risky

CORPORATE-LEVEL STRATEGIES

Concentration: involves focusing the company on one product or product line that i knows very well Growth: Three strategies that focus on internal activities that will result in growth. Growth strategies include market penetration (boosting sales of present products by more aggressive selling in the firms current markets), geographic expansion (expanding operations in new geographic areas), and product development (developing products for current markets) Integration: Two strategies that focus on external activities that will result in growth. Horizontal integration (acquiring control of competitors in the same or similar markets with the same or similar products) and vertical integration (owning or controlling the inputs to the firms processes and/or the channels through which the products or services are distributed) Diversification: Helps the firm avoid the problem of having all of its legs in one basket by spreading risk among several products or markets. Related diversification means adding new, but related, products or services to an existing business. Conglomerate diversifica- tion means diversifying into products or markets that are not related to the firm's present businesses. Investment reduction: Means reducing the company investment in one or more of its lines of business. One investment-reduction strategy is retrenchment, which means the reduction of activity or operations (eg. Target withdrew from Canadian market). Divestment involves selling or liquidating one or more of a firm's businesses.

TWO COMMON METHODS OF DEALING WITH THE UNFORESEEN

Contingency planning and crisis management

LEVELS OF STRATEGY

Corporate-level strategy, business-leave (competitive) strategy, functional strategies

MICHAEL PORTERS THREE COMPETITIVE STRATEGIES -business-level (competitive) strategies

Cost leadership: becoming the low-cost leader in an industry or Differentiation Strategy: tries to be unique in its industry along some dimension that is valued by buyers or A focus strategy: selecting a market segment and serving the customers in that market niche better than competitors

STRATEGY FORMULATION

Creating of a broad program for defining and meeting an organizations goals THREE STEPS 1. Setting strategic goals 2. analyzing the organization and its environment 3. matching the organization and its environment

HOW DOES ONE BECOME A MANAGER?

Education (a degree, diploma, or even MBA) and experience

HUMAN RESOURCE MANAGERS

Found in most companies; hire employees, train them, evaluate their performance, decide how they should be compensated, and deal with labour unions (if workforce is unionized)

TACTICAL PLANS

Generally, short-range plans concerned with implementing specific aspects of a company strategic plans; typically involved upper and middle management

AREAS OF MANAGEMENT

Human resources, operations, information, marketing, and finance

CORPORATE-LEVEL STRATEGY

Identifies the various businesses a company will be in, and how these businesses will relate to each other

BUSINESS-LEVEL (COMPETITIVE) STRATEGY

Identifies the ways a business will compete in its chosen line of products or services

IDENTIFYING ALTERNATIVES

Identify possible alternatives of effective action -generally, the more important the decision the more attention directed to developing alternatives -managers must accept the factors such as legal restrictions, moral and ethical norms, and available technology

FUCTIONAL STRATEGIES

Identify the basic courses of action each department in the firm will pursue so that it contributes to the business's overall goals

CONTINGENCY PLANNING

Identifying aspects of a business or its environment that might require changes in strategy; identifying in advance changes that might occur that would affect a business and developing a plan to respond to such changes

MARKETING MANAGERS

Includes the development, pricing, promotion, and distribution of products and services; responsible for getting these products and services to buyers. Large firm will probably have a vice-president for marketing (top manager), regional marketing managers (middle managers), and several district sales managers (first-line managers)

TYPES OF GOALS

Long-term gaols, intermediate goals, short-term goals

MINUSBERGS GENERAL MANAGER ASSESSMENT

Managers jobs can be described as ten roles in three general categories; interpersonal roles, informational roles, decision-making roles)

STEP 3 OF STRATEGY FORMULATION

Matching environmental threats and opportunities with corporate strengths and weaknesses

WHAT SHOULD YOU EXPECT IN A MANAGEMENT JOB?

No matter how many hours per week managers work, no over pay - often work more than 40 hour weeks (many managers have filed lawsuits against employers making them work over time but not getting paid for it)

GOALS

Objectives that a business plans to attain; the starting point in strategic management -performance targets and the means by which organizations and their managers measure success or failure to every level

NON-LOGICAL AND EMOTIONAL FACTORS THAT INFLUENCE MANAGERIAL DECISION MAKING

Organizational politics, intuition, escalation of commitment, and risk propensity

LEADING CAUSES OF WASTED TIME

Paperwork - must learn to recognize document that require more attention Telephone - get a secretary and and set aside certain part of day to return calls Meetings - the person handling the meeting should specify a clear agenda, start on time, keep everyone focused on the agenda, and end on time Email - many emails are not important

FINANCIAL MANAGERS

Plan and oversee a company financial resources; vice-president for finance (top), a division controller (middle), and an accounting supervisor (first-line)

OPERATIONAL PLANS

Plans setting short-term targets for daily, weekly, or mostly performance; developed by middle and lower-level managers

STRATEGIC PLANS

Plans that reflect decisions about resource allocations, company priorities, and steps needed to meet strategic goals; set by top management

RATIONAL DECISION-MAKING PROCESS

Recognized and defining the decision situation, identifying alternatives, evaluating alternatives, selecting the best alternative, implementing the chose alternative, following up and evaluating the results

RISK PROPENSITY

Refers to how much a manager is willing to gamble when making decisions

ORGANIZATIONAL POLITICS

Refers to the actions that people take as they try to get what they want

LONG-TERM GOALS

Relate to extended period of time (typically five years or more into the future)

OPERATION MANAGERS

Responsible for a company's system for creating goods and services; includes production control, inventory control, and quality control among other duties. Manufacturing companies need operation managers at many levels - typically have a vice-president for operations (top), plant managers (middle), and suerpvisors (first-line)

INFORMATION MANAGERS

Responsible for designing and implementing various systems to gather, process, and disseminate information. Middle managers help design information systems for divisions or plants. Computer systems managers within smaller businesses or operations are first-line managers.

INTERMEDIATE GOALS

Set for a period of one to five years into the future

SHORT TERM GOALS

Set for one years or less and are developed for several different areas (eg. increasing sales by 2% this year, cutting costs by 1% next quarter, and reducing turnover by 4% over the next 6 months)

DECISION-MAKING SKILLS

Skill in defining problems and selecting the best courses of action; help managers define problems or opportunities and in electing the best course of action

TEHCNICAL SKILLS

Skills associated with performing specialized tasks within a firm; obtained through education (eg. a secretary's ability to type, an animators ability to draw a cartoon, and an accountants ability to audit a company records) -more important for first-line managers as the help employees with activities more -higher up you co on corporate ladder, less important technical skills are

TIME MANAGEMENT SKILLS

Skills associated with the productive use of time -particularly important for highly paid top managers

HUMAN RELATIONS SKILLS

Skills in understanding and getting along with people; help managers lead, motivate, communicate with, and get along with their subordinates. -important at all levels of management

OTHER MANAGERS

Some firms have more specialized managers (eg. chemical companies have research and development managers whereas other companies have public relations managers)

HIERARCHY OF PLANS

Strategic plans, tactical plans, operational plans; each level reflects plans for which managers at the level are responsible - levels constitute a hierarchy because implementing plans i practical only when there is a logical from from one level to the next

PLANNING VS. STRATEGY

Strategy is wider in scope and is a broad program that describes how a business intends to meet its goals, how it will respond to new challenges, and how it will meet new needs

BASIC MANAGEMENT SKILLS

Technical, human relations, conceptual, time management, decision-making skills

PLANNING

That portion of a manager's job concerned with determining what the business needs to do and the best way to achieve it; the process of determine the firm's goals and developing a strategy for achieving those goals. Includes five steps

LEADING (OR DIRECTING)

That portion of a manager's job concerned with guiding and motivating employees to meet the firm's objectives (eg. Steve jobs was able to unite his employees in a clear and targeted manner, and motivate them to work in the best interests of the company)

ORGANIZING

That portion of a managers job concerned with mobilizing the necessary resources to complete a particular task (eg. HP reorganized when they lost competitive edge and centralized company activites and developed an integrated, organization-wide internet strategy to bounce back)

CONTROLLING

That portion of a managers job concerned with monitoring the firm's performance and, if necessary, acting to bring it in line with the firm's goals; can show where performance is better (or worse) than expected and can serve as a basis for providing rewards or reducing costs

STRATEGY

The broad set of organizational plans for implementing the decisions made for achieving organizational goals

UNCERTAINTY

The manager does not know all the possible alternatives or the outcomes associated with each alternative

CERTAINTY

The managers knows what alternatives are available and what conditions are associated with each alternative

MANAGERS

The people who plan, organize, lead, and control the operations of an organization - one of the most important resources for a business and/or organization (eg. prime minister of Canada, dean of business school, chief administrator of your local hospital)

STRATEGIC MANAGEMENT

The process of helping an organization maintain an effective alignment with its environment

MANAGEMENT

The process of planning, organizing, leading, and controlling a business's financial, physical, human, and information resources in order to achieve its goals

CORPORATE CULTURE

The shared experiences, stories, beliefs, and norms that characterize a firm (e.g., Toronto Blue Jay organization is designed to make employees feel like they are part of a family; employees have "snacks with the president" so they can talk about how the organization is operating)

PROBLEM DECISIONS

There is a specific problem that must be resolved

OPPORTUNITY DECISIONS

There is no specific problem but rather an opportunity presents itself

TOP MANAGERS

Those managers responsible for a firm's overall performance and effectiveness and for developing long-range plans for the company; guide the fortunes of companies and responsible to the board of directors and shareholder of the firm (eg. president, vice-president, chief operating officer, chief executive officer, and chief financial officer) NOTE - have a lot of authority but also have to maintain a positive image; if this is not done they often have to resign such as the CEO )Desmond Hague of food services company Centerplate) was caught in the elevator kicking a dog

MIDDLE MANAGERS

Those managers responsible for implementing the decisions made by top managers (eg. plant manager, operations manager, and division manager)

FIRST-LINE MANAGERS

Those managers responsible for supervising the work of employees (eg. supervisor, office manager, and group leader)

PROGRAMMED DECISIONS

Those that are made frequently and are highly structured

NON-PROGRAMMED DECISIONS

Those that are made infrequently and are poorly structured

LEVEL OF MANAGEMENT (basic)

Top, middle, and first-line management.

INTUITION

Usually based n years of experience and practice in making decisions in similar situations

ESCALATION OF COMMITMENT

When a manager makes a decisions and then remains committee to its implementation in spite of clear evidence that it is a bad decision

EVALUATING ALTERNATIVES

once alternatives identified, must be thoroughly evaluated to increase the chance that the alternative finally chose will be successful -some alternatives may not be feasible bc of legal barriers, financial barriers, limited human resrouces, limited material, and limited information resources

SMART GOALS

sPECIFIC mEASURABLE aCHIEVABLE rELEVANT tIME-FRAMED

SWOT ANALYSIS

(step 2 of strategy formulation) Identification and analysis of organizational Strengths and Weaknesses (factors internal to firm and assessed using organizational analysis) and environmental Opportunities and Threats (external to the firm and are assessed using environmental analysis) as part of strategy formulation

STRATEGIC GOALS

(step one of strategy formulation) long-term goals derived directly from the firm's mission statement