Management Chp. 5, 7, 10
chain of command
the vertical line of authority that clarifies who reports to whom throughout the organization -clear + distinct line of authority among the positions in an organization
custom-made solutions (nonprogrammed)
new, creative solutions designed specifically for the problem
certainty (known outcome)
the state that exists when decision makers have accurate and comprehensive information
uncertainty
the state that exists when decision makers have insufficient information -no reasonable probabilities
risk
the state that exists when the probability of success is less than 100 percent and losses may occur
Advantages of Delegation
- Leverages managers' energy and talent - Conserves managers' most valuable asset: time - Develops subordinates' managerial skills and knowledge - Promotes subordinates' sense of importance and commitment
Disadvantages of Group Decision Making
- is more time-consuming + less efficient -group member domination can influence decision process -satisficing -increased pressures to conform to the group's mindset (groupthink) -ambiguous responsibility for the outcomes of decisions -goal displacement--winning most important
programmed decisions
-Problem is frequent, repetitive, routine w/ much certainty regarding cause & effect relationships -Decision procedure depends on policies, rules, and definite procedures
Generate alternative goals and plans
-based on the findings from situational analysis, the planning process should generate alternative goals that could be pursued and alternative plans for achieving those goals -this step stresses creativity + encourage managers and employees to think broadly + develop a variety of options
Advantages of Group Decision Making
-Provides more complete information. -Makes more accurate decisions -Offers a greater diversity of experiences + perspectives -Generates more alternatives. -Increases acceptance of a solution. -Increases legitimacy of decision. -Higher level of commitment
nonprogrammed decisions
-problem is novel and unstructured, w/ much uncertainty regarding cause-and-effect relationships -decision procedure needs creativity, intuition, tolerance for ambiguity, and creative problem solving.
select goals and plans
-select the most appropriate + feasible alternatives -experienced judgement is important, but don't rely on this only
Strategy Implementation Steps
1. Define strategic tasks 2. Assess organization capabilities 3. develop an implementation agenda 4. Create an implementation plan
Resources provide competitive advantage only under certain circumstances
1. The resources are instrumental in creating customer value, increasing the benefits customers derive from a good/service relative to the costs they incur 2. Rare + not equally available to all competitors 3.difficult to imitate 4. well organized
delegation process
1. assigning responsibility 2. granting authority 3. creating accountability
Decision-making stages
1. identify and diagnose the problem 2. generate alternative solutions 3. evaluate alternatives 4. make the choice 5. implement the decision 6. evaluate the decision
SWOT analysis
A comparison of strengths, weaknesses, opportunities, and threats that helps executives formulate strategy.
strategy
A pattern of actions and resource allocations designed to achieve the organization's goals. -answers.. 1. Where will we be active? 2. How will we get there 3. How will we win in the marketplace? 4. How fast will we move, and in what sequence will we make changes? 5. How will we obtain financial returns?
Specialization
A process in which different individuals and units perform different tasks
Situational Analysis
A process planners use, within time and resource constraints, to gather, interpret, and summarize all information relevant to the planning issue under consideration. -study past events, examine current conditions, and try to forecast future trends -focus on internal forces at work in the organization or work unit and consistent with the open systems approach, examines influences from the external environment. -outcome = identification + diagnosis of planning assumptions, issues, and problems -will provide information about the planning decisions needed to be made.
Strategic planning
A set of procedures for making decisions about the organization's long-term goals and strategies -senior executives are responsible for the development and execution of this plan, may not formulate or implement the entire plan personally -top-level managers develop them -low detail, usually long (3-7 years)
Tactical Planning
A set of procedures for translating broad strategic goals and plans into specific goals and plans that are relevant to a distinct portion of the organization, such as a functional area like marketing or human resources. -Focus on the major actions a unit must take to fulfill its part of the strategic plan -Middle managers develop this plan -medium detail (1-2 years long)
low-cost strategy
A strategy an organization uses to build competitive advantage by being efficient and offering a standard, no-frills product.
differentiation strategy
A strategy an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions.
related diversification (concentric)
A strategy used to add new businesses that produce related products or are involved in related markets and activities.
strategic control system
A system designed to support managers in evaluating the organization's progress regarding its strategy and, when discrepancies exist, taking corrective action.
product divisions
All functions that contribute to a given product are organized under one manager.
Differentiation
An aspect of the organization's internal environment created by job specialization and the division of labor. -the organization is composed of many different units that work on different kinds of tasks, using different skills + work methods.
Matrix organization
An organization composed of dual reporting relationships in which some managers report to two superiors—a functional manager and a divisional manager
centralized organization
An organization in which high-level executives make most decisions and pass them down to lower levels for implementation
decentralized organization
An organization in which lower-level managers make important decisions
mission
An organization's basic purpose and scope of operations.
satisficing
Choosing the first option that is acceptable, although not necessarily the best or perfect. -tendency to search for alternatives only until 1 is found that meets some minimum standard of sufficiency to solve the problem. -personal motives and biases -expediency -cost of continuing to search for alternatives -incomplete + imperfect info -constrained by bounded rationality (decision makers limited by their values + unconscious reflexes, skills, and habits)
Planning
Conscious, systematic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue in the future. - not an informal or haphazard response to a crisis; it is a purposeful effort that is directed and controlled by managers -sometimes draws on the knowledge + experience of employees at all levels
Functional Organization
Departmentalization around specialized activities such as production, marketing, and human resources.
divisional organization
Departmentalization that groups units around products, customers, or geographic regions.
customer divisions
Divisions are built around groups of customers
geographic divisions
Divisions are structured around geographic regions. Geographic distinctions include district, territory, region, and country.
Other Internal Resource Analyses
Examine, as necessary and appropriate, the strengths and weaknesses of other organizational activities, such as research and development (product and process), management information systems, engineering, and purchasing.
Financial Analysis
Examines financial strengths and weaknesses through financial statements such as a balance sheet and an income statement and compares trends to historical and industry figures.
Human resources assessment
Examines strengths and weaknesses of all levels of managers and employees and focuses on key human resources activities, including recruitment, selection, placement, training, labor (union) relationships, compensation, promotion, appraisal, quality of work life, and human resources planning.
marketing audit
Examines strengths and weaknesses of major marketing activities and identifies markets, key market segments, and the competitive position (market share) of the organization within key markets.
Operations Analysis
Examines the strengths and weaknesses of the organizations manufacturing, production, or service delivery activities.
Stakeholders
Groups and individuals who affect and are affected by the achievement of the organization's mission, goals, and strategies. -buyers, suppliers, competitors, government, and regulatory agencies, unions and employee groups, the financial community, owners and shareholders, and trade associations
standing plan
Is designed to accomplish an enduring set of goals
implement the goals and plans
Managers and employees must understand the plan, have the resources to implement it, and be motivated to do so. -employees usually are better informed, more committed, and more highly motivated when a goal or plan is one that they helped develop
Line vs. Staff Authority
Line: the responsibility to make decisions and issue orders down the chain of command -units that deal directly w/ the organization's primary goods + services Staff: The responsibility to advise and assist other personnel, support line departments -HR, research, legal, accounting, public relations
Strategic goals
Major targets or end results relating to the organization's long-term survival, value, and growth. -Top level managers usually establish goals aimed at effectiveness (providing appropriate outputs) and efficiency (a high ratio of outputs to inputs). -common ones = growing, increasing market share, improve profitability, boosting return on investment, fostering quantity and quality of outputs, increasing productivity, improving customer service, and contributing to society
monitor and control performance
Managers must continually monitor the actual performance of their work units against the unit's goals and plans. -They need to develop control systems to measure that performance and allow them to take corrective action when the plans are implemented improperly or when the situation changes.
leaders
Persons with managerial and personal power who can influence others to perform actions beyond those that could be dictated by those persons' formal (position) authority alone
benchmarking
Process of assessing how well one company's basic functions and skills compare with those of another company or set of companies
1. Analyze the situation 2. Generate alternative goals + plans 3. Evaluate goals + plans 4. Select goals + plans 5. Implement goals + plans 6. Monitor and control performance 7. essentially repeat like a cycle
Steps in the planning process
1. establishing mission, vision, and goals 2. analyzing external opportunities and threats 3. analyzing internal strengths and weaknesses 4. SWOT analysis and strategy formulation 5. strategy implementation 6. strategic control
Strategic management process
Functional strategies
Strategies implemented by each functional area of the organization to support the organization's business strategy.
vertical integration
The acquisition or development of new businesses that produce parts or components of the organization's product
responsibility
The assignment of a task that an employee is supposed to carry out
delegation
The assignment of new or additional responsibilities to a subordinate -steps for effective delegation 1. define goal 2. select person for the task 3. solicit the subordinate's views about the suggested approaches 4. five the subordinate the authority, time + resources to perform the assignment 5. schedule checkpoints for reviewing progress 6. follow through by discussing progress at appropriate intervals
Accountability
The expectation that employees will perform a job, take corrective action when necessary, and report upward on the status and quality of their performance
span of control
The number of subordinates who report directly to an executive or supervisor
coordination
The procedures that link the various parts of an organization for the purpose of achieving the organization's overall mission
Operational planning
The process of identifying the specific procedures and processes required at lower levels of the organization. -Frontline managers develop this plan, focus on routine tasks such as production runs, delivery schedules, and human resource requirements -high detail (short plan, usually less than a year long)
organization chart
The reporting structure and division of labor in an organization
corporate strategy
The set of businesses, markets, or industries in which an organization competes and the distribution of resources among those entities.
goal displacement
a condition that occurs when a decision-making group loses sight of its original goal and a new, less important goal emerges
mechanistic organization
a form of organization that seeks to maximize internal efficiency (centralized) -authority is centralized, tasks and rules are clearly specified, and employees are closely supervised -the bureaucracy; high in specialization + formalization -fixed duties -many rules -formalized communication channels -centralized decision authority -taller structures
Referent power
a leader has personal characteristics that appeal to others; people comply because of admiration, personal liking, a desire for approval, or a desire to be like the leader
scenerio
a narrative that describes a particular set of future conditions
groupthink
a phenomenon that occurs when a group made up of members who may be very competent and thus quite capable of making excellent decisions nevertheless ends up, as a result of a flawed group process and strong conformity pressures, making a poor decision
Strategic Management
a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals -managers are encouraged to think strategically and focus on long-term, externally oriented issues as well as short-term tactical and operational issues
vertical differentiation
a product difference that, from everyone's perspective, makes a product better than rival products
concentration
a strategy employed for an organization that operates a single business and competes in a single industry
unrelated diversification (conglomerate)
a strategy used to add new businesses that produce unrelated products or are involved in unrelated markets and activities
Goals
a target or end that management desires to reach
core capability
a unique skill and/or knowledge an organization possesses that gives it an edge over competitors
optimizing
achieving the best possible balance among several goals
maximizing
achieving the best possible outcome, the one that realizes the greatest positive consequences and the fewest negative consequences -rational + logical decision, no uncertainty -obtain perfect and complete info
organic organization
an organizational structure with a wide span of control, little formalization, and decentralized decision making -emphasizes flexibility -adhocracy; low in specialization, formalization + centralization -adaptable duties -few rules -informal communication -decentralized decision authority -flatter structures
Internal Strengths and Weaknesses
are an organization's controllable activities that are preformed especially well or poorly, they arise in the management, marketing, finance/accounting, production/operations, research and development, and management information systems activities of a business
intangible assets
company reputation, culture, technical knowledge, and patents -accumulated learning + experience
unity of command
each person within an organization must have a clear reporting relationship to one and only one boss
evaluate goals and plans
evaluates the advantages, disadvantages, and potential effects of each alternative goal and plan -managers must prioritize the goals, evaluate how well alternative plans meet high-priority goals, and consider the cost and likely investment return of each
Single-use plan
focuses on achieving non-repeating goals
ready-made solutions (programmed)
ideas that have been seen or tried before
SWOT analysis
identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)
Reward power
influences others because she controls valued rewards; people comply with the leader's wishes so as to receive those rewards
Resources
inputs to a system that can enhance performance
Managers
persons whose influence on others is limited to the appointed managerial authority of their positions to reward + punish
Tangible assets
physical assets, such as real estate and automobiles, that can be held for either consumption or investment purposes
External Opportunities and Threats
refer to economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends and events that could significantly benefit or harm an organization in the future
contingency plan
specifies actions when initial plans fail or events in the external environment create sudden change
Plans
the actions or means managers intend to use to achieve organizational goals -should outline alternative actions that may lead to the attainment of each goal, the resources required to reach the goal, and the obstacles that may develop
division of labor
the assignment of different tasks to different people or groups
Integration
the degree to which differentiated work units work together + coordinate their efforts
Job Specialization
the degree to which the overall task of the organization is broken down and divided into smaller component parts
authority
the legitimate right to make decisions and to tell other people what to do
strategic vision
the long-term direction and strategic intent of a company
Business Strategy
the major actions by which an organization competes in a particular industry or market
Departmentalization
the process of grouping jobs according to some logical arrangement -subdividing work and workers into separate organizational units responsible for completing particular tasks
Legitimate power
the right, or the authority, to tell others what to do; employees are obligated to comply with these orders