Management Exam 2

Transcendant Education

-an education with five higher goals that balance self-interest with responsibility to others(Robert Giacalone) 1. Empathy (feeling your decisions as potential victims may feel them, to gain wisdom) 2. Generativity (learning to give and take) 3. Mutuality (viewing success as a common victory rather than a personal gain) 4. Civil Aspiration (thinking not just in terms of "don'ts"(what you shouldn't do) but what positive contributions you can offer 5. Intolerance of Ineffective Humanity (speaking out against unethical actions)

Utilitarianism

-directly seeks the greatest good for the greatest number of people

Danger Signs that there is unethical behavior

-excessive emphasis on short term revenues over long term considerations -failure to establish a clear code of ethics -desire for simple "quick fix" for ethical problems -unwillingness to take a stand if it creates costs -view that ethics is solely a legal issue or public relations tool -lack of procedures for handling ethical problems -response to the demands of shareholders at the expense of their other constituencies

Advantages to Groups

-more info available -more perspectives -intellectual stimulation -people who participate are more likely to understand why a decision was made -higher level of commitment to the decision (better informed, higher quality decisions)

Disadvantages to Groups

-one group member may dominate the discussion -satisficing -Groupthink -goal displacement

THREE TYPES OF PLANNING:

-single use plan: focuses on achieving temporary, non-repeating goals (ex. apple got caught slowing phones so they offered to fix anyone's battery for that make of phone) -standing plan: designed to accomplish an enduring set of goals -contingency plan: plans for if something goes wrong or if circumstances change

Physiological Biases

1) illusion of control (people's belief that they can influence events, even when they have no control over what will happen) 2) framing effects (a decision bias influenced by the way in which a problem or decision alternative is phrased or presented) 3) discounting the future (a bias weighting short-term costs and benefits more heavily than longer-term costs and benefits)

Design Thinking

A human-centered approach to innovation that integrates customer needs, the potential of technology, and the requirements for business success. 1. inspiration- motivating problem or solution 2. Ideation- generating, developing and testing ideas 3. Implementation- creating the product

Strategy

A pattern of actions and resource allocations designed to achieve the organization's goals. 1. where will be active? 2. How will we get there? 3. How will we win the marketplace? 4. How fast will we move, ans in what sequence will we make changes? 5. How will we obtain financial returns?(low costs or premium prices)

Virtue Ethics

A perspective that goes beyond the conventional rules of society by suggesting that what is moral must also come from what a mature person with good "moral character" would deem right. -society's rules provide a moral minimum, moral individuals transcend those rules by applying personal virtues such as faith, honesty, and integrity. -Kohlberg's model of cognitive moral development: classifies people into categories based on their level of moral judgement 1. preconventional stage: people make choices based on concrete rewards and punishment and immediate self interest (stealing office supplies from work) 2. conventional stage: people conform to the expectations of ethical behavior held by groups or institutions such as society, family, or peers (thinking about taking supplies, but deciding not to bc it wouldn't look right) 3. principled stage: people see beyond authority, laws, and norms and follow their self chosen ethical principles(you don't even consider taking supplies bc it wouldn't be right)

Life Cycle Analysis (LCA)

A process of analyzing all inputs and outputs, through the entire "cradle-to-grave" life of a product, to determine total environmental impact (total use of resources and the releases into air, water, and land)

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. -focuses on major actions that must be taken(design, installation, testing, etc) -developed by middle managers -medium level of detail and lasts 1-2 years

______ is the process of amassing, reviewing, and summarizing all information concerning a particular planning issue.

A situational analysis

Low-Cost Strategy

A strategy an organization uses to build competitive advantage by being efficient and offering a standard, no-frills product. (ikea)

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. This unique or differentiated position is often obtained by high quality, excellent marketing, or superior service -innovation and technology -Advantages and Disadvantages to leading -Advantages: 1. first mover advantage 2. little or no competition 3. greater efficiency 4. higher profit margins 5. sustainability advantage 6. reputation for innovation 7. establishment of entry barriers 8. occupation of best market niches 9. opportunities to learn -Disadvantages: 1. greater risks 2. cost of technology development 3. cost of market development 4. cost of customer education 5. infrastructure costs 6. cost of learning and eliminating defects 7. possible cannibalization of existing products (Whatever strategy managers adopt: the most effective one is the one competitions can't or won't imitate) Functional Strategy: strategies implemented by each functional area of the organization to support the organization's business strategy (production, HR, marketing, etc)

To be fully effective, all strategic, tactical and organizational goals and plans must be...

Aligned!

Planning

Conscious, systematic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue in the future -planning moves in a cycle Step one: analyze the situation Step two: generate alternative goals and plans Step three: evaluate goals and plans Step four: select goals and plans Step five: implement goals and plans Step six: monitor and control performance *Repeat*

What type of analysis is used by companies to identify actions that will maximize profits while satisfying the demand for corporate social responsibility?

Cost benefit analysis

Which of the following are ethical issues that managers encounter with the use of technology in the workplace?

Disclosure of confidential information Loss of productivity Computer users introducing computer viruses

Which of the following are subjects commonly addressed in ethics codes?

Employee conduct Political Activity Suppliers and contractors Technology Community and environment

Which of the following are subjects commonly addressed in ethics codes?

Employee conduct Technology Suppliers and contractors Community and environment Political activity

Implement the Strategy

Four Steps: 1) define strategic tasks 2) Assess organization capabilities 3) Develop an implementation agenda 4) create an implementation plan 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

Which of the following takes place during Step 3 of the planning process?

Goals and plans are evaluated.

Evaluate your ethics by asking yourself the following questions:

IF.... -you would be proud to see that decision reported on in newspapers -it would build community between those involved -it would generate the greatest social good -you would be willing to see others preform the same action where you might be the victim -it doesn't harm "the least among us" -it doesn't interfere with others developing their skills to the fullest

Ethical Dilemmas

Issues challenging managers and employees such as: 1. Brands(some people see brands as using manipulative or deceptive tactics 2. CEO Pay: some say CEO's pay are excessive 3. Commercialism in Schools: some parents are uncomfortable w advertising in schools 5. Religion at work: some want more, some want less 6. Sweatshops: 7. Wages: many workers feel underpaid

Which of the following best defines the ethical system known as utilitarianism?

It is an ethical system in which the goal is to create the greatest good for the greatest number.

Why is Step 6 of the planning process so important?

It is needed to determine if the selected plan is working.

What drives the analysis of the external environment (opportunities and threats)?

MIssion and vision

Strategic Goals

Major targets or end results relating to the organization's long-term survival, value, and growth. -Strategic managers(top level managers) usually establish goals to maintain effectiveness(providing sufficient outputs) and efficiency (high ratio of outputs to inputs) -common goals include: growing, increased market share, etc)

Monitor and Control Performance

Managers must continually monitor the actual performance of their work units against the unit's goals and plans. Manager's also 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

How do social realities affect decision making?

Many decisions are the result of intensive social interactions, bargaining, and politicking. Important managerial decisions are marked by conflict among interested parties. A manager must consider the preferences and reactions of many people.

Implement Goals and Plans

Must now pursue and implement plans. Proper implementation is key to achieving goals. Managers and employees must understand the plan, have the resources to implement it, and be motivated to do so.

John Rawl's Veil of Ignorance

Rawls maintained that only a person ignorant of their own identity can apply the veil of ignorance to help minimize personal bias. -basically you must look at problems from both perspectives equally, not from just your own perspective

We live in a....

Risk Society (such as pollution, etc, as result of many large businesses)

Implementing the Decision

STEP FIVE -those who implement the decision should understand why the decision was made, and be committed to its successful implementation 1. Determine how things will look when the decision is fully operational. 2. Chronologically order, perhaps with a flow diagram, the steps necessary to achieve a fully operational decision. 3. List the resources and activities required to implement each step. 4. Estimate the time needed for each step. 5. Assign responsibility for each step to specific individuals. -decision makers should assume that implementation will NOT go smoothly, take time to identify possible problems and possible opportunities that may arise

SWOT analysis and strategy formation

STEP FOUR -SWOT Analysis: a comparison of strengths, weaknesses, opportunities, and threats that helps executives formulate strategy -strengths and weakness refer to internal resources -opportunities and threats refer to the external environment -Corporate Strategy: identifies the set of businesses, markets, or industries in which an organization competes and the distribution of resources among those entities 1) Concentration: focusing on a single business competing in a single industry 2) Vertical Integration: he acquisition or development of new businesses that produce parts or components of the organization's product 3) Related Diversification: a strategy used to add new businesses that produce related products or are involved in related markets and activities (ex. Disney has bought theme parks, news networks, music, etc) 4) Unrelated Diversification: strategy used to add new businesses that produce unrelated products or are involved in unrelated markets and activities (putting your eggs in different baskets. ex. GE started with motors but has now branched into healthcare and insurance) BCG Matrix: Y- Axis is "Market Growth", X-axis is "Relative Competitive Position/Market Share". There are 1) cash-cows: low growth, strong competitive position, generate tons of revenue which they invest in other businesses 2) stars: high growth and strong competitive position, require heavy investment but generate needed revenues 3) question marks: high growth, weak competitive position, require heavy investment to improve their position, or else they should be left behind 4) dogs: low growth, weak competitive position, very bad

Making the Choice

STEP FOUR -maximizing: for best possible outcome; fewest negatives -satisficing: choose one that's sufficient but maybe not the best -optimize: achieve best balance among several goals -limited search - don't consider all alternatives

Identifying and Diagnosing the Problem

STEP ONE -problem(or opportunity) exists and should be solved(or sought after) -current state vs the desired state -compare current performance against (1) past performance (2) current performance of competitors (3) future expected performance -problem may be an opportunity waiting to be exploited -must diagnose the true cause of the problem

Establishing mission, vision, and goals

STEP ONE -mission: clear and concise expression of the organization's basic purpose, describes the organization as it currently operates -strategic vision: points to the future, where the organization is headed and what it can become -strategic goals: evolve from mission and vision, the goals you have that support and are aligned with your mission and vision

Analyze the situation

STEP ONE of planning -planning begins with situational analysis: within time and resources, planners should gather, interpret, and summarize all information relevant to the planning in question. Study past events, current conditions, try to forecast future trends. -provides info on the planning decisions you need to make -example: if you're selling teen jewelry you would study the percent of teen girls who buy jewelry, teen jewelry competitors, etc)

Evaluating the Decision

STEP SIX -useful whether the outcome is postie or negative -positive feedback means its working and should be continued and possibly applied to other parts of the organization -negative feedback means one of two things: 1. implantation will require more time, resources, effort, or thought 2. the decision was not a good one (back to the drawing board, cycle starts over)

Evaluating Alternatives

STEP THREE Involves determining the value or adequacy of the alternatives that were generated- which solution is best?

analyzing internal strengths and weaknesses

STEP THREE Resource Analysis Components: -financial analysis (balance sheet, income statement) -human resources assessment (quality of work life, relations w labor unions, recruiting, etc) -marketing audit (examines market share position) -operations analysis (manufacturing, production, delivery service) -other internal resource analysis Resources: inputs to production 1) Tangible Assets: land, facilities, materails, etc 2)Intangible Assets: company reputation, culture, technical knowledge, and patents, and learning/experience Resources provide competitive advantage if they are: -rare -difficult to immitate -well organized Resources that are rare, difficult to imitate and well organized are an organization's Core Capabilities(something a company does especially well in comparison to competitors) Benchmarking- comparing aspects of your company to another and seeing how you are better or worse (find "best practices")

Evaluate Goals and Plans

STEP THREE of planning -Managers will evaluate the advantages, disadvantages, and potential effects of each alternative goal and plan. -Must prioritize those goals and even eliminate some of them. -Managers must consider carefully the implications of alternative plans for meeting high priority goals and consider the cost and likely investment return of each.

analyzing external opportunities and threats

STEP TWO -begins with an analysis of the industry -stakeholders are examined (employees, customers, shareholders, etc) -environmental analysis elements: *industry growth *industry forces *competitor analysis *legal trends *political activity *social issues *social interest groups *labor issues *macroeconomic conditions *technological factors

Generating Alternative Solutions

STEP TWO Ready-made solutions: Ideas that have been seen or tried before Custom-made solutions: New, creative solutions designed specifically for the problem

Generate Alternative Goals and Plans

STEP TWO of planning -based on the findings from situational analysis, you should analyze alternative goals that could be pursued and alternative plans for achieving those goals. -identify multiple targets to market -GOALS: targets or end the manager wants to reach (ex. how much you want to sell in the first year) -PLANS: actions or means to achieve those goals. They should outline alternative actions that may lead to the achievement of each goal and the resources needed, and the obstacles that may develop (three types of planning *see next flashcard)

ethical issue

Situation, problem, or opportunity in which one must choose among several actions that must be evaluated as morally right or wrong

When considering the social realities of a decision, it is important that managers take into account which of the following?

Social interactions, bargaining, and politicking

Time Pressures

Tactics: 1. use real time information 2. involve people more effectively and efficiently 3. realistic view of conflict

Operational Planning

The process of identifying the specific procedures and processes required at lower levels of the organization. -developed by front-line managers -very detailed -less than a year -production runs, delivery schedules, human resource requirement

What did Milton Friedman view as the social responsibility of business?

To increase profits

Strategic Management

a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals -focus on long term, externally oriented issues as well as short term tactical and operational issues Has Six Elements: 1) Establishing mission, vision, and goals 2) analyzing external opportunities and threats 3) analyzing internal strengths and weaknesses 4) SWOT analysis and strategy formation 5) strategy implementation 6) strategic control

Universalism

according to universalism, all people should uphold certain values society needs to function. universal values are principles so fundamental to human existence that they are important in all societies (rules against murder, deceit, torture, and oppression) -Caux Principles of Business (Kyosei and human dignity) -five core values present in all cultures: 1. truthfulness 2. responsibility 3. fairness 4. respectfulness 5. compassion -universalism is hard to obtain because the idea that all people are likely to act completely morally is not likely

Philanthropic Responsibility

additional behaviors and activities that society finds desirable and that the values of the business support (community projects, donating to charity, etc)

The second step of the planning process should generate ______ goals and plans for the future.

alternative

The second step in the strategic management process is ______.

analysis of the external environment

Compliance Based Ethics Programs

are designed by corporate counsel to prevent, detect, and punish legal violations. -increase surveillance and controls on people and impose punishments on wrongdoers

A(n) _______ strategy defines the major actions by which a company builds or strengthens its competitive position in the marketplace.

business

Profit Maximization and Corporate Responsibility...

can now converge. We can have both! -"doing good and doing well"

Which of the following are actions to take during the sixth and final stage of the decision-making process?

collect information on how well the decision is working. Use feedback to either continue the decision or go back to the first stage. Compare collected information with specified goals.

In the first stage of decision making, the sources of discrepancies that exist in organizational or unit performance may be detected when comparing current performance against:

current performance of other organizations or units past performance future expected performance

Sustainable Growth

economic growth and development that meet present needs without harming the needs of future generations

Relativism

ethical behavior based on the opinions and behavior of other relevant people. relativism acknowledges the existence of other viewpoints . it defines ethical behavior to how others behave. For example, norms or standards of accepted and acceptable behavior, vary from one culture to another. -whistle-blowing: telling others in and out of the organization about wrongdoings (this differs among cultures) (In America, we appreciate whistle-blowers that want to expose bad things. But in China, for example, disapproves so its less common)

The term that refers to how decisions are evaluated and made in an organization on the basis of right and wrong is ______.

ethical climate

A(n) _____ is a situation, problem, or opportunity in which an individual must choose among several actions that must be evaluated as morally right or wrong.

ethical issue

Ethical Codes

executives say they pay most attention their company's ethics codes when they feel that stakeholders(customers, investors, lenders, and suppliers) try to influence them to create a strong ethical culture and promote a positive image. Ethics codes need to be carefully written a tailored to individual companies' philosophies. -most ethics codes: -written by those who are affected by the code -focus on real life situations that employees can relate to -keep it short and simple, so it's easy to remember and understand -write about values and beliefs that are important and that people will believe in -set the tone at the top, having executives talk about and live up to the statement

Corporate ethics programs commonly include ______.

formal ethics codes that detail the company's expectations

Integrity Based Ethics Programs

go beyond the mere avoidance of illegality; they are concerned with the law but also with instilling in people a personal responsibility for ethical behavior. -with such a program, individuals often govern themselves through a set of guiding principles they embrace.

Implementation of the plan follows which of the following steps of the planning process?

goal and plan selection

The fourth step of the formal planning process is ______.

goal and plan selection

Moral Character

having the strength and persistence to act in accordance with your ethics despite the challenges

Egoism is an ethical system that defines acceptable behavior as that which maximizes benefits for the ______.

individual

Egoism

individual self interest is the actual motive of all conscious activity. -"doing the act that promotes the most good for oneself" -believers of this value system say if everyone does this, society as a whole should improve -Adam Smith's concept of the invisible hand in business: Smith argued that if every business follows its own self interest the total wealth of society will be maximized.

Ecocentric Management

its goal is the creation of sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders

Moral Judgement

knowing what actions are morally defensible

Strategic Planning

making decisions about the organizations long term goals and strategies. -have strong external orientation and cover main parts of the organization -senior executives responsible for development and execution of the plan

Managerial Decision Making

managers often ignore problems because they are unsure of how much trouble it will cause to fix the problem, concerned about the consequences if they fail, and management problems are complex. -for these reasons, managers may lack the insight, courage, or will to act. -most managerial decisions lack structure and entail risk, uncertainty, and conflict -programmed decisions: (problems that are recurring and have rules and guidelines on how to solve. easy) -unprogrammed decisions: (problems that are unique and don't have specific solutions. require creativity and are more difficult) involve risk and uncertainty -Risk: the state that exists when the probability of success is less than 100 percent and losses may occur -The Decision Making process involves these steps: 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

Ethical Responsibilities of a Business

meeting social expectations, not written as law (ex. McDonald's stopped using gestation crates after complaints from consumers of its cruelty)

Corporate Social Responsibility

obligation toward society assumed by business

Ethics becomes more complicated when a situation arises in which one value ______ other values.

overrules

Moral Philosophy

principles, rules, and values people use in deciding what is right or wrong. The main moral philosophies are: 1. Universalism 2. Egoism 3. Utilitarianism 4. Relativism 5. Virtue Ethics

Moral Awareness

realizing the issue has ethical implications -considering if the decision has negative effects on the employees, environment, or other stakeholders

When making an ethical decision, in order to define the complete moral problem you must understand all the moral standards and ______.

recognize all moral impacts

Groups Must be Well Lead

requires: 1) appropriate leadership style 2. constructive conflict (devil's advocate, dialectic) 3. creativity (brainstorming)

A(n) ________ plan focuses on the specific actions a particular unit or function must take to fulfill its part of the strategic plan.

tactical

Ethical Climate

the ethical climate within an organization refers to the processes by which decisions are evaluated and made on the basis of right and wrong

Business Strategy

the major actions by which an organization competes in a particular industry or market -usually done by keeping costs low or offering unique and highly valued products

Business Ethics

the moral principles and standards that guide behavior in the world of business

Shareholder Model

theory of corporate social responsibility that holds that managers are agents of shareholders whose primary objective is to maximize profits -Adam Smith "The Wealth of Nations" -Milton Friedman (believed managers role was to make the shareholders money- but while obeying society's laws and ethical customs)

Stakeholder Model

theory of corporate social responsibility that suggests that managers are obliged to look beyond profitability to help their organizations succeed by interacting with groups that have a stake in the organization -stakeholders include shareholders, employees, customers, society and government. -As members of society, corporations should participate positively in community and the larger environment.

Legal Responsibilities of a Business

to obey local, state, federal, and relevant international laws

Economic Responsibilities of a Business

to produce goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors

The ethical system that states that everyone should uphold certain values, such as honesty and rules against oppression, is called

universalism

Which of the following are parts of the process for ethical decision making?

using judgment to recognize what actions are morally defensible having awareness to realize the issue has ethical implications having moral character to act in accordance with your ethics

Ethical Leader

when you are both personally moral and a moral manager

Daniel Kahneman

wrote "thinking fast and slow" Two Modes of thought: 1. System 1: fast, automatic, and emotional in nature 2: System 2: slow, deliberate, and logical he says decision making is often controlled by system 1

Caux Principles of Business

(under Universalism) Ethical principles established by international executives based in Caux, Switzerland, in collaboration with business leaders from Japan, Europe, and the United States. There are two main principles: 1. Kyosei: living and working together for the common good, allowing cooperation and mutual prosperity to coexist with healthy and fair competition. 2. Human Dignity: concerns the value of each person as a end, not a means to a fulfillment of other people's purposes

Sarbanes-Oxley Act

--Law requires companies to: 1. Have more independent board directors, not just company insiders 2. Adhere strictly to accounting rules 3. Have senior managers personally sign off on financial results --List of steps organizations can take to adhere to SOX: 1. written standards of ethical conduct and controls 2. exclude anyone who violates the steps from management positions 3. provide training in ethics to all employees and monitor compliance 4. add incentives to complying and consequences for violating standards 5. respond with consequences and preventive actions if criminal activity occurs

Select Goals and Plans

-Managers will select the most appropriate and feasible alternative. -The evaluation process identifies the priorities and trade-offs among the goals and plans. -may generate future scenarios with contingency plans attached to each