Chapter Review Questions & Summary

Setting strategic objectives is a critical step in the strategic management process because it facilitates a firm's ability to?

1) Allocate resources appropriately 2) Reach a shared understanding of priorities 3) Delegate responsibilities 4) Hold people accountable for results

The Steps in Strategic Management Process are

1) Develop strategic vision and mission for organization 2) Analyze external environment and internal resources: these results help identify SWOT analysis 3) Strategic Objectives are developed and strategy is formulated to achieve those objectives 4) Strategy is implemented

What are the four major challenges that manager's face, and how do managers deal with them?

1) Managing change:new technology and globalization causes change, managers must manage it effectively. 2)Managing Resources:firms must develop resource portfolio and integrate resources to create capabilities that are then leveraged to achieve a competitive advantage. 3)Managing Strategically: managers select and implement a strategy designed to provide greater value to customers than do competitors. 4)Managing Entrepreneurially: managers need to act entrepreneurially to identify and exploit opportunities

What are the strategic actions useful for implementing a strategy? Please explain each.

1) Seven S Approach: having an internal organization that is consistent with and supportive of the strategy. 2) Acquisitions/Strategic Alliances: provide immediate access and instant knowledge to new markets 3)Evaluation and Feedback: improves performance of individuals and organization. 4) After Implementation managers need to monitor the outcomes to see where adjustments are necessary

What is the difference between a transformational and a transactional leader? Is one necessarily better than the other? How does each bring about change?

1) Transformational leadership is leadership that motivates followers to ignore self-interests and work for the larger good of the organization to achieve significant accomplishments; emphasizes articulating a vision that will convince subordinates to make major changes. While 2) Transactional leadership is leadership that focuses on motivating followers' self interests by exchanging rewards for their compliance; emphasizes having subordinates implement procedures correctly and make needed, but relatively routine, changes.

How are formalization, informalization, centralization, and decentralization interrelated?

1)Formalization is represented by the defined structures and systems in decision making, communication, and control in the organization. These mechanisms usually explicitly define where and how people and activities are independent along with how they are integrated. 2) The informal organization consists of the unofficial but influential means of communication, decision making, and control that are part of the habitual way things get done in the organization. 3) Centralization and decentralization refer to the level at which decisions are made—at the top of the organization or at lower levels. Centralized organizations largely restrict decision making to a few individuals, usually at the top of the organization. 4) In contrast, decentralized organizations tend to push decision-making authority down to lower levels in the organization

What are the four primary functions of management and their contents?

1)Planning: Estimating future conditions and circumstances required to be successful, Making decisions based on these estimations about what work is to be done:By the manager and By all of those for whom she or he is responsible 2)Organizing: Involves paying attention to The structure of relationships among positions,The people occupying those positions, and Linking that structure to the overall strategic direction of the organization 3)Directing: the process of influencing other people to attain organizational objective;.motivating others,interacting effectively in group and team situations,and communicating in support of others' efforts. 4)Controlling: Regulating the work of those for whom a manager is responsible, including:Setting standards of performance in advance, Monitoring ongoing (real time) performance, Assessing a completed performance, Results of the control process (evaluation) are fed back to the planning process.

What is a competitive advantage, and what are the characteristics of a sustainable advantage?

Ability of a firm to provide value to customers that exceeds what competitors can provide. Characteristics: rarity,difficult to imitate, nonsubstitutability, and provide superior value.

Even though it may be difficult for a person to become a highly acclaimed leader....

Almost any person can improve his or her leadership capabilitiies

Management is a process that involves

Assembling and using sets of resources, acting in a goal-directed manner to accomplish tasks, and having activities carried out in an organizational setting.

Those who have studied motivation in organizations generally classify work-motivation theories as?

Content or Process Theories

How are content theories and process theories of motivation different?

Content theory— addresses the needs a person is trying to satisfy and what features of the work environment seem to satisfy those needs Process theory— deals with the way different variables combine to influence the amount of effort people put forth

The critical issue for both individual managers and for their organizations is how to?

Convert leadership "potential" to actual,effective leadership

What are the three organizational levels and how do they interrelate with the three types of plans?

Corporate level develops strategic plans. Business level may develop strategic plans but usually develops tactical plans. Functional level develops operational plans.

How is budgeting used in the planning process?

Budgeting is a planning tool to quantify and allocate resources to specific activities, to determine priorities, and is the key to implementation. Most firms propose and set budgets on an annual basis.

Chapter 4

Strategic Management

An expense budget includes?

all primary activities on which the unit or organization plans to spend money and the amount allocated to each during the year

A useful way to look at leadership is a process that includes which three fundamental elements?

leaders, followers and situations. The intersection of these three components has been called the "locus of leadership".

Management is an old process dating back thousands of years; ancient Chinese rulers used management concepts of?

organization, specialization of labor, and and strategy

The basis of modern management is ?

scientific management proscribed by Frederick Taylor during the Industrial Revolution

Formalization,informalization, centralization, and decentralization are?

structural dimensions that balance and help to manage differentiation and integration

A capital expenditure budget specifies?

the amount of money an organization plans to spend on specific items of long-term use and require significant financial investments

Organizational objectives are the future end states but plans are?

the means by which managers achieve the objectives

How do environmental factors and the organization's strategy affect the type of structure it should adopt?

Designing organizations must be done within the context of the organization's external environment and its strategy. Factors: environment's complexity and dynamism are important in designing organizations. Environmental complexity is fundamentally the breadth and depth of differences and similarities in an organization's external environment. 1)Static environments may have few or many factors, but these factors tend to remain stable over time. 2) Dynamic environments change constantly. The structure should complement and leverage the strategy. A division structure is commonly used to complement a multiproduct strategy. In dynamic environments a flexible strategy may be needed and thus the structure should facilitate changing the strategy when it is necessary to do so.

Important dimensions of the organizing process include?

Differentiation and Integration

What are the five characteristics of effective goals and why are they important for implementing action plans?

Specific, measurable, realistic, time-bound, and having the commitment of those charged with the responsibility of achieving them. They're important because they have a significant and positive effect on performance.

What are the five dimensions of the general environment? Please explain each.

1)Sociocultural: consist of primarily demographics and cultural characteristics of societies in which an organization operates. 2)Technological: managers use this and focus mainly on product and process changes 3)Economic: these can show the specific factors that have the strongest influence on an organization. 4) Political - legal: laws that frame what organizations can and cannot do and as consequence create both challenges and opportunities. 5) global forces: managers should be aware of the size and scope of a business because that shows its importance.

The use of power raises several important leadership issues such as:

1)Which types of power should be used? -this is the leader's judgment call. It depends on characteristics of the situation and circumstances 2)How can power be put to use?-To put power to use involves influence tactics: specific behaviors used to affect the behavior and attitudes of other people. 3)Should power be shared? -Yes. This refers to empowerment, where those with high amounts of power increase the power of those with less, especially with regard to decision making.

What are three major characteristics that determine motivation in organizations? The variables within each?

1. The characteristics of the individual:needs,attitudes, goals 2. The characteristics of the job or task: degree of control allowed on the job, its degree of difficulty, and the feedback received from doing it 3. The characteristics of the work situation: a person's immediate supervisor, work-group members, and various organizational actions such as compensation and training

What is a SWOT analysis and how does it facilitate selecting the best strategy?

A SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) can be used to integrate and interpret the results of the internal and external analyses. The SWOT analysis leads to the establishment of the firm's strategic objectives and the formulation of its strategy.

How is referent power related to charisma?

A charismatic leader is one who has influence over others based on the individual's inspirational qualities rather than formal power or position. We see that referent power and charisma can be related because in both instances the subordinates look up to their leaders because of something they admire or they see something that inspires them to be better.

How can you use a value chain analysis to analyze the firm's internal resources?

A comprehensive internal analysis of the firm's resources can be accomplished using the value chain (consists of a set of key activities that directly produce or support the production of a firm's products and service offered to customers)

What are the similarities and differences between a group? and a team?

A group is typically considered to consist of small number of people, usually between 3 to 20 members who interact around some kind of shared objectives. A team can be considered a type of group that has higher level of coordinated interaction, and especially, a higher level of individual members 'identification with a group.

According to House's path-goal theory, what is a leader's main responsibility?

A leader's main responsibility is to influence subordinates' estimated probabilities for being able to convert their efforts into performance that leads to desired rewards.

What is planning and its purpose?

A process to determine and implement actions to achieve organizational objectives

What are the ten managerial roles and their importance to managerial work?

A) Interpersonal Roles Figurehead attending ceremonial activities Leader: influencing or directing others Liaison: contacting others outside the formal chain of command B) Informational Roles Monitor: seeking information to be aware of crucial developments Disseminator: receiving and sending information Spokesperson: representing the views of the unit for which he/she is responsible C) Decisional Roles Entrepreneur: exploring new opportunities Disturbance-handler: acting as a judge or problem solver in conflicts among employees Resource-allocator: deciding how resources will be distributed Negotiator: making accommodations with other units

How do each of the three dimensions of managerial jobs contribute to managerial tasks?

A. Demands: What a manager must do B. Constraints: Factors that limit a potential response by the manager to various demands. Ex: time, budgets, technology, attitudes & regulations C. Choices:The range and amount of discretion allowed to a manager in responding to demands

What is social loafing? Can managers do anything to minimize or eliminate it?

Social loafing is the phenomenon of reduced effort per person; managers may be able to encourage higher individual levels of effort on group projects by building some form of acknowledgment of each member's contribution to the final outcome of the project.

What are differentiation and integration, and what is the role of each in organization structure?

Differentiation is the extent to which tasks in the organization are divided into subtasks and performed by individuals with specialized skills. The main benefit of differentiation is greater specialization of knowledge and skills. Integration is the extent to which various parts of the organization interact, coordinate, and cooperate with each other. The primary benefit of integration is the coordinated actions of different people and activities to achieve a desired organizational objective.

What is the major premise of the efficiency perspective regarding corporate social responsibility?

Efficiency perspective argues that "the business of business is business", managers must maximize shareholder's returns. But social responsibility perspective argues that managers should provide a reasonable return to shareholders while meeting concerns of society.

What is the role of emotional intelligence in leadership?

Emotional intelligence is an awareness of others' feelings and a sensitivity to one's own emotions and the ability to control them. This comes in handy when it comes to leadership because it shows that the leader could take other people's feelings into consideration. It also helps when the leader is able to deliver bad news but at the same time they can control their employees because he/she can relate the news in a way that makes the subordinates feel as though their superior cares about them.

What are 6 steps in planning process?

Environmental analysis, resources, objectives, actions, implementation, and outcomes.

What is a Strategic management process?

Establishing the organization's general direction and objectives, formulating the specific strategy, planning and carrying out the strategy's implementation, monitoring results, and making needed adjustments.

What is the Organizational Structure in an International Context?

Firms usually begin with simple structures, such as an international department or an international division, as they venture into international markets. However, their international structures grow more complex over time as they enter more countries. The structures chosen usually depend on the amount of the firm's foreign sales and degree of product diversification.

What is the planning process?

First firms needs to analyze external environment with forecasts and benchmarking. Then it needs resources to implement the plans developed. Next, the firm designs and implements the plan's action steps.

What does motivation result from? Explain the forces of motivation and how to use them.

From a set of forces that energize, direct, and sustain behavior. These forces can either be internal, or "push," forces or external, or "pull," forces. Overemphasizing one of these two sets of forces to the exclusion of the other can result on misdiagnosing the motivational situation in an organizational setting. At any point in time, either or both types of forces may be active

The mix and level of the managers' skills required to be effective vary by?

The type of managerial job and level in the organization

What are six common organization structures and their descriptions?

Functional, product, division, customer, geographic or region, and matrix. 1) The functional structure is used to organize the firm around traditional functional areas, such as accounting, finance, marketing, operations, and so on. 2) In a product structure, the firm is organized around specific products or related sets of products. 3) Divisions typically consist of multiple products within a generally related area, though specific products may not necessarily be closely related. 4) Customer structures are organized around categories of customers. Firms can develop a structure around various geographical areas or regions. 5)A matrix structure consists of two organization structures superimposed on each other. As a consequence, there are dual reporting relationships.

Chapter 10

Groups and Teams

The consequences employees experience following their behavior can?

Impact the likelihood of that behavior being exhibited in the future; positive and negative reinforcements increase the likelihood of that behavior, punishments decrease likelihood of that behavior, and extinction (not applying any consequence) can decrease the likelihood of a behavior occurring in the future.

Why is it important to consider the characteristics of followers?

It is important to consider the characteristics of followers because they are sometimes a neglected part of the leadership process. However, they often determine its effectiveness.

Chapter 8

Leadership

Are leadership and management the same? Why or why not

Leadership and management share many similarities, but they are not the same. Management includes leading (influencing people), but it also involves various activities, such as planning and organizing, which may not directly involve influencing other people. We must remember not all leaders are competent at managing, nor are all managers effective leaders.

What is leadership? Who can be expected to exhibit leadership in an organization?

Leadership is a process of influence that can potentially occur anywhere in an organization - not just at the top.

What are the key differences between managerial ethics and corporate social responsibility?

Managerial ethics are concerned with morality and standards of business conduct: including establishing codes of ethics, implementing ethics training, rewarding ethical behavior. But corporate social responsibility helps manager use a strategic approach to making ethical decisions by creating shared value for society and business.

Chapter 9

Motivation

What is the difference between a negative reinforcement and a punishment? Give an example of each.

Negative reinforcement— the removal of undesirable consequences. Example: a salesperson working with demanding customers finds that, by putting in extra effort their unpleasant experiences are reduced. Punishment— an undesirable consequence given following a behavior to decrease the likelihood it will be repeated. Example: punishing employees for being absent from work

Is there an optimum group size? Why or why not?

No it depends critically on types of tasks facing the group.

How does a network structure facilitate managing activities and help a company achieve competitive advantage?

One of the most contemporary structures is the network structure. A common network structure results from outsourcing. Often, firms outsource noncore activities of their value chain so that they can focus on core activities that give them a competitive advantage.

What are the concepts of organization structure and organizational design, and how do they differ?

Organization structure can be defined as the sum of the ways in which it divides its labor into distinct tasks and then coordinates them. The structure provides the blueprint for reporting relationships, controls, authority, and decision making in the organization. Organizational design is the process of assessing the firm's strategy and environmental demands and determining the appropriate organizational structure.

Chapter 6

Organizational Structure and Design

What are organizational charts and how do they relate to organizational structure?

Organizational structure is presented in the form of an organizational chart. Organizational charts illustrate relationships among units and lines of authority among supervisors and subordinates through the use of labeled boxes and connecting lines.

Chapter 5

Planning

Difference between position power and personal power.

Position power is based on a person's rank in the organization and can include legitimate (formal authority), reward, and coercive power. The two primary personal powers are expertise, which is based on a person's skills and knowledge, and referent power, which occurs when people are attracted to, or identify with, someone.

What are "push" and "pull" motivational forces? Give examples of each

Push forces are needs (security, self-esteem), attitudes (organization, job), goals (task completion, performance). Pull/External forces are immediate social environment (supervisor, workgroup members) and organizational actions (rewards & compensation, availability of training)

What is referent power, and how can it be developed?

Referent power is a type of personal power gained when people are attracted to, or identify with that person. Referent power makes it possible to lead by example rather than by giving orders. This power is gained because other people "refer" to that person. It can be developed when a subordinate may begin using gestures similar to those of his superior or even imitating certain aspects of his speech patterns.

How can managers affect motivation by changing a job's content?

Research focused on content has helped managers understand how the design of the jobs can affect the motivation of those who perform them. When a job is designed in such a way that it becomes more meaningful to the employee doing it, the result is called job enrichment. If Managers can create or adjust jobs to include more "core characteristics", and use more of the personal resources that subordinates bring to the work situation they may be able to increase both the motivation and satisfaction of those who work for them

Chapter 2

Social Responsibility and Managerial Ethics

How are strategic, tactical, and operational plans different?

Strategic focuses on broad future of organization to achieve long term objectives by analyzing external info, internal resources, and products and services the firm will provide. Tactical plans are specific goals in organization with shorter time frames. Operational plans are short term, specific, actions for smaller units of organization and are the least complex of the three.

What kind of power are subordinates most likely to have? Why?

Subordinates are most likely to have expert power. This is so because expert power is not confined to higher organizational levels. Lower-level employees can possess some of the most specialized, and yet most needed knowledge in an organization.

Who are the primary historical figure who have contributed to modern management and what are their most important ideas?

Sun Tzu: Art of War Frederick Taylor: Father of Modern Management Frank and Lilian Gilibreth: Time and Motion Studies Douglas McGregor: Theory Y Maslow: Hierarchy of Needs.

What are the three primary skills and how does their importance vary with the type and level of a manager's job?

Technical, Interpersonal, and Conceptual Skills. First-line mangers: generally need to depend more on their technical and interpersonal skills and less on their conceptual and diagnostic skills. Top managers: tend to exhibit the reverse combination—a greater emphasis on conceptual and diagnostic skills and a somewhat lesser dependence on technical and interpersonal skills. Middle managers: require a more even distribution of skills.

What are the key concerns with the efficiency perspective of social responsibility?

That values of society are only reflected in a manager's decision when the values are codified by law.

Chapter One

The Nature of Management

What is the fundamental objective of the strategic social responsibility approach?

The best social responsibility is that which creates shared value for society and the business

When is each generic business level strategy most appropriate for use?

The choice of strategy depends on market opportunities, competitors' actions, and the firm's resources and capabilities. The integrated strategy has been facilitated by globalization and technology and simultaneously sometimes necessitated by global competition. The multipoint strategy allows firms to compete with others across product and geographic markets.

The dimensions of managerial jobs include?

The demands and constraints placed on managers and the discretionary choices allowed by the job.

SWOT Analysis leads to?

The establishment of the firm's strategic objectives and formulation of strategy

What are the five powerful means of enhancing the influence of formal codes of conduct on actual employee behavior?

The example set by senior executives, communication, training, rewards (recognition) and punishments, and whistle-blowing.

What effects can diversity have on group members and on group functioning?

The existence of strong norms in different culture tends to narrow individual differences in behavior and beliefs.

Analyzing the firm's external environment includes examining?

The general environment and the company's industry and competitor's environment

What are primary and secondary activities in a value chain analysis?

The internal components of a firm separates into five primary activities and four support activities. The primary activities are those directly involved in the creation of a product or service and distributing it to the customer. By contrast, support activities facilitate the creation of the product or service and its transfer to the customer.

What six factors influence moral intensity?

The magnitude of the consequences, social consensus, the probability of effect, temporal immediacy, proximity, and the concentration of effect.

How do each of Porter's "five forces" affect the industry and competitor environment?-

The nature of rivalry, new entrants, and substitutes involve competitors and the other two forces are customers and suppliers. Depending if each of these levels are high or not it will bring low or high profits.

How is an environmental analysis used to formulate a strategy?

The results of these analyses help to identify the organization's strengths and weaknesses and the opportunities and threats in the external environment.

What organization structures are most effective for organizations operating in international markets? Explain why.

The structures chosen usually depend on the amount of the firm's foreign sales and degree of product diversification. 1) International Division- for firms with low foreign sales and low international product diversity 2) Geographic Structure- High foreign sales and low international product diversity 3) Matrix Structure- high foreign sales and high international product diversity 4) Worldwide Product Distribution- low foreign sales and high international product diversity

The role of Values and Attitude with Motivation are ?

The values and attitudes employees bring to the work situation can strongly influence their motivation. Values vary across different categories of employees (e.g., younger versus older), and, especially, across different national cultures. Likewise, individuals' attitudes toward the importance of work in general—in other words, the "centrality of work"—can affect their reaction to various motivational attempts by their managers. The implication for anyone in a managerial role is that particular incentives that work quite well for some employees or some groups might not motivate others.

According to equity theory, what might happen if a worker thought he or she was putting in more effort than a coworker, yet the coworker received a higher salary or larger bonus?

They might decrease their inputs by putting less effort into a task while still receiving the same level of outcomes, they might leave their jobs, they might compare themselves to someone else, or they may rationalize that they are more skilled than them, or their job position is not as desirable as initially thought.

What are some of the characteristics of an individual with a high need for achievement?

They need to • work on tasks of moderate difficulty • take moderate risks • take personal responsibility for their actions • receive specific and concrete feedback on their performance

What attributes do positive reinforcements need to have to motivate behavior?

They need to be: • Equitable • Efficient • Available (capable of being given) • Not exclusive • Visible • Reversible

Fundamentally, the objective of strategic management is?

To determine, create, and maintain competitive advantage

In transformational and transactional leadership: Is one necessarily better than the other? How does each bring about change?

Transformational leadership has the upper hand because it deals with inspiring, empowering and coaching followers while transactional leadership deals with the exchange of rewards and benefits. This is so because it has been said that most of the times when our subordinates have to focus on the rewards they are attaining, they tend to get lazy and very laid back if they do not receive these rewards constantly or they are not in agreement with whatever reward is being given out.

Compare and contrast the utilitarian approach, moral rights approach, universal approach, and justice approach.

Utilitarian approach: right thing to do is what brings about the greatest good. Moral rights approach: some things are just right or wrong, independent of their consequences. Universal approach: actions should be guided by principles that are universally applied, even to yourself, the 'freedom and autonomy" approach. Justice approach- costs and benefits should be equitably distributed, rules should be impartially applied, the damaged because of inequity or discrimination should be compensated.

What is work centrality? Why is it important for managers to understand this concept if they want to motivate their employees?

Work centrality is the degree of general importance that working has in life of an individual at a point in time. Managers need to understand this concept because they cannot assume that everyone else will value work, and different elements of work, in the same way they themselves do. Sensitivity to these differences can help address motivational issues and problems.

Are there substitutes for leadership?Explain.

Yes because leadership is not the only way to deal effectively with managerial problems. A greater use of leadership behaviors is not always the only or even the best, solution for some managerial problems. Education and expertise reduce need for direct leadership. Rigid rules and procedures neutralize effects of leadership. Extensive training and experience, for example, can lessen the need for a leader's direction in fast-paced and complex jobs ( like those held by air traffic controllers or police and emergency workers). Decisions often have to be made so rapidly in these jobs that they don't allow time for intervention by a leader.

Goal setting is?

a specific planning process for managing performance in individual employees, teams, units, and organizations.

What are the four stages of group formation? Name the Important features of each.

a) Forming-forming a group will face different challenges such as who is in the group, what questions they have and if they are comfortable working alone or in group and who is leading the group and where each person is coming from. b) Storming,-Following a group formation and initial interactions, an early -development "storming" stage often settles in and may last some time, depending on the same nature of the group and its task. c) Norming-In this stage at least a minimum amount of consensus about the group's issues and norms (agreed -upon standards of behavior) begins to appear, as well as a degree of individual identity with a group and its goals d) Performing-In this stage, a group is able to perform like team and take actions as coherent entity and not just as a set of loosely affiliated individuals.

The business-level strategies, from which the firm can select, include?

cost leadership, differentiation, focused cost leadership, focused differentiation, integrated differentiation-cost leadership, and a multipoint competitive strategy.

Planning process includes an assessment of the organization's?

external environment and internal resources

According to expectancy theory, what can a manager do to increase an employee's motivation? Does his or her culture make a difference?

• Identify rewards that are valued • Strengthen subordinates' beliefs that their efforts will lead to valued rewards • Clarify subordinates' understanding of exactly where they should direct their efforts • Make sure the desired rewards under your control are given directly following particular levels of performance. • Provide a level and amount of rewards that are consistent with a realistic level of expected rewards Culture does make a difference as different cultural circumstances can affect its application