Management exam 2

organization-wide commitment

MBO cannot be applied to specific organizational divisions it must be applied to the entire organization

crisis planning

"in-the-moment" planning for sudden, unexpected events ex: the coronavirus prompted many managers to engage in crisis planning

2 popular appraisal systems

(1) 360-degree feedback (2) forced ranking performance review systems

main takeaways from Dell's proxy statement

(1) Core Dell is critical to New Dell (2) New Dell faces risks with sales force integration and competition (3) the speed of the transformation is critical

Apple's key differentiators

(1) all of Apple's products use its proprietary operating system, which creates a "closed ecosystem" and imposes switching costs -- decreases threat of substitute products (2) they focus intensely on design quality and strives to provide compelling features in all of its products (3) they have been successful at marketing its products -- specifically, its retail stores have provided a good customer interface

employers who must dismiss employees should take the following steps

(1) allow the employee a chance to correct personal problems first (2) don't delay dismissal because you feel bad (3) be sure you have documented reasons for dismissing him or her etc.

advantages of a virtual structure

(1) allows a firm to tap into different knowledge pools and talent pools without being bounded by geographic barriers (2) firm gets lower fixed costs because it doesn't need to pay rent for an office building (3) less time and money are needed for travel because there are people located where the opportunities are

3 layers that form the foundation of organizational culture

(1) artifacts (2) values (3) basic assumptions

suggestions for giving performance feedback

(1) balance negative feedback with at least one positive message (2) use a problem-solving approach rather than criticism (3) describe the employee's current and desired performance in specific and direct terms etc.

4 basic kinds of unionized workplaces

(1) closed shop (2) union shop (3) agency shop (4) open shop

3 things that must be in place for MBO to be a success

(1) commitment of top management (2) organization-wide commitment (3) cascading objectives

common elements of all organizations

(1) common purpose (2) coordinated effort (3) division of labor (4) hierarchy of authority (unity of command) (5) span of control (6) authority (7) centralization of authority

control steps

(1) compare results with the plan (2) take corrective action -- can be accomplished by correcting deviations in the current plan or returning to the first step in the cycle and use results to improve future plans

3 things you can do to manage in a turbulent environment

(1) contingency planning (2) building scenarios (3) crisis planning

3 levels of strategy

(1) corporate-level strategy (2) business-level strategy (3) functional-level strategy

John Kotter's 8 steps managers can take to provide a clear picture of where the company wants to go as it changes

(1) create a sense of urgency (i.e., establish a compelling reason for change) (2) create a guiding coalition (a cross-functional group to lead the change) (3) develop a vision and strategy to guide the process (4) communicate the change vision (5) empower broad-based action (6) generate short-term wins (7) consolidate gains and produce more change (8) anchor new approaches in the culture must be done sequentially to be most effective step 1 goes with unfreezing steps 2-6 go with changing step 7-8 for with refreezing

examples of career readiness competencies that effective planning requires

(1) critical thinking and problem solving (2) a proactive learning orientation (3) functional (task-based) knowledge (4) understanding the business (5) networking

ways an organization can achieve a competitive advantage

(1) customer responsiveness (2) innovation (3) quality (4) efficiency

parts of an effective mission statement

(1) customers (2) major products and services (3) geographical areas in which the organization competes (4) basic technology used by the organization etc.

outside factors that can force an organization to change

(1) demographic changes (2) technological advancements (3) shareholder and customer demands (4) changes in the market (5) social and political pressures

2 challenges managers face in their organizing role

(1) designing organizational structure (2) designing organizational culture

strategic human resource management process 7 steps

(1) determine the mission and vision (2) determine the grand strategy (3) develop strategic plans (4) determine what human resources are needed (5) recruit and select individuals (6) engage in orientation, training, and development (7) appraise employee performance

5 steps of strategic management

(1) determine the mission, vision, and values statements (2) examine the current reality by assessing the environment (3) devise the grand strategy, as well as the strategic, tactical, and operational plans (4) execute the strategy by following the strategic plans (5) evaluate strategic plans and alter them if necessary to maintain strategic control

planning process

(1) develop a vision, mission, and goals (2) determine opportunities and threats (3) determine strengths and weaknesses (4) develop strategies (5) develop a strategic plan (6) develop tactical and operational plans (7) analyze and control results (8) continue planning (repeat this process)

advantages of a divisional structure

(1) divisional groupings make greater focus possible by being more specialized (2) coordination is built into the structure (3) managers can allocate resources to the appropriate divisions in the most attractive markets

disadvantages of a divisional structure

(1) each division has to perform its own functional tasks, so there will be unnecessary - and costly - functional duplication (2) it may be hard to maintain a unified sense of identity and organizational culture, as the organization may evolve into a heterogeneous group of different divisions (3) there is the potential for loss of control as different divisions may have different approaches to work processes and output

3 causes that impact employees' disposition towards change

(1) employee characteristics -- consist of his or her perceptions of change, individual differences, and likely actions and inactions (2) change-agent characteristics -- change agent: the individual who is a catalyst for helping organizations change, usually the manager or leader -- change-agent characteristics: individual differences, perceptions of change, and actions and inactions (3) change agent-employee relationship -- trusting relationship reduces resistance

managers need to do the following activities to keep the strategic plan on track

(1) engage employees in achieving the plan. This is key in the control process (2) keep planning simple (3) stay focused on what's important (4) keep progressing toward your vision, adjusting plans when needed

some of the contingencies that can affect the kind of structure that is best for an organization

(1) environment in terms of mechanistic or organic (2) environment in terms of differentiation or integration (3) link between strategy and structure

performance management cycle steps

(1) express performance expectations (2) monitor progress and evaluate outcomes (3) provide feedback and coaching (4) provide rewards or consequences

characteristics of an effective values statement

(1) expresses the company's distinctive view of the world (2) provides a guide for all of the organization's actions (3) builds a foundation on which all decisions can be made (4) should be unchanging etc.

12 ways in which cultures can become embedded in organizations

(1) formal statements (2) slogans and sayings (3) rites and rituals (4) stories, legends, and myths (5) leader reactions to crisis (6) role modeling, training, and coaching (7) physical design (8) rewards, titles, promotions, and bonuses (9) organizational goals and performance criteria (10) measurable and controllable activities (11) organizational structure (12) organizational systems and procedures

ways managers can strengthen culture once it is already in place

(1) founders and leaders set a tone for the culture (2) organization can use rewards that reinforce the culture (3) organization can strive to maintain a stable workforce so that it does not have to continuously socialize new workers (4) managers should be in touch with the organization's cultural network, recognizing which individuals are highly influential and that others in the organization look up to an respect (5) the organization can use proper selection techniques to hire people whose values are consistent with the organization's culture, and then use socialization to familiarize new fires with the values, expected behaviors, and social knowledge needed to succeed in a specific organization

conflicts between labor and management can be resolved in 3 ways

(1) grievance (2) mediation (3) arbitration

disadvantages of a matrix structure

(1) having two bosses may create problems (2) having two goals may create problems (3) increase overhead and reduce efficiency (4) the use of teams may lead to a diffusion of accountability for results

questions a manager should consider before deciding to diversify

(1) how will we attain a competitive advantage? (2) what strategic resources will be necessary to succeed? (3) what will our market share be? (4) how will we benefit from diversification? (5) are we sufficiently organized for diversification?

5 steps to becoming better at receiving feedback

(1) identify your tendencies (to argue, to blame others, etc.) (2) engage in active listening (3) avoid defensiveness, which occurs when people perceive they are being attacked or threatened (4) seek performance feedback (5) practice engaging in mindfulness, or the awareness that results from purposely and nonjudgmentally paying attention to the present moment

methods a company can use if they are implementing a stability strategy

(1) implement a no-change strategy (2) implement a little-change strategy

how companies might implement a growth strategy

(1) improve an existing product or service (2) introduce a new product or service (3) increase marketing efforts (4) expand vertically, by acquiring a distributor or manufacturer (5) expand horizontally, by acquiring another retailer (6) merge with another company

components of an innovation system

(1) innovation strategy (2) committed leadership (3) innovative culture and climate (4) required structure and processes (5) necessary human capital (6) human resource policies, practices, and procedures (7) appropriate resources

advantages of strategic planning

(1) it provides direction and momentum (2) it inspires new ideas (3) it cultivates a sustainable competitive advantage

things the new employee should have access to to be effective

(1) job routine (2) mission and operations (3) work rules and employee benefits (4) legal environment

advantages of MBO

(1) joint participation of management and employees in goal setting allows for both "bottom-up" and "top-down" goal setting (2) employees are typically more committed to achieving goals that they had a part in developing (3) the entire process focuses on the steps that need to be taken to achieve broad organizational goals

4 strategies to help companies get ahead of change

(1) listen to customers to understand what they want (2) offer an outstanding customer experience (3) appreciate the difference between a change and a crisis (4) embrace change rather than running from it

3 options managers have regarding culture

(1) maintain the existing organizational culture if they believe it is appropriate for the current environment (2) alter the current culture, including modifications involving a new set of values, basic assumptions, and ideologies (3) create a completely new culture, typically in a separate work unit or new organization

planning steps

(1) make the plan (2) carry it out

disadvantages of a modular structure

(1) not all products and services can be "chunked", or made in modules (2) the different modules may not fit together properly if the firm doesn't properly specify how they should interface (3) the entire process is only as fast as the slowest supplier of a module

2 types of performance appraisals

(1) objective appraisals (2) subjective appraisals

2 types of learning and development

(1) on-the-job learning and development (2) off-the-job learning and development

four target elements of change

(1) people (2) organizational arrangements (3) methods (4) social factors these elements are all intertwined a change enacted in any of these elements will ripple across the entire organization

3 reasons PC industry and Dell declined in early 2000s

(1) people began to shop for low-cost, value PCs rather than customized PCs (2) there was a re-emergence of effective retail channels for value PCs (3) the real growth in PCs was in emerging markets, and Dell had not focused on those markets

advantages of a functional structure

(1) people working together in the same functional area learn from one another (2) managers can easily monitor and evaluate workers

reasons for planning

(1) planning helps you check your progress (2) planning helps you coordinate activities (3) planning helps you be forward-thinking (4) planning helps you deal with uncertainty

disadvantages of planning

(1) planning is time-consuming -- takes time to gather info., forecast, and budget (2) plans go obsolete quickly -- in a fast-paced environment, plans can become outdated quickly, so they must be constantly evolving to reflect the changing nature of the market

inside factors that can force an organization to change

(1) problems with employees (2) behavior of managers

4 functions of an organization's culture

(1) providing direction (2) provide organizational identity (3) facilitate collective commitment (4) promote social-system stability

things a firm can implement to follow a defensive strategy

(1) reducing costs by halting hiring (2) liquidating (selling off) assets (3) gradually ending production (4) divesting part of its business by selling off entire departments or subsidaries (5) declaring bankruptcy

legal considerations for any employment tests

(1) reliability (2) validity

key trends in the marketplace that illustrate why change is fundamental to the longevity of organizations

(1) segmentation and niche products (2) targeted products with shorter time-to-market (3) radical innovation is hurting traditional companies (4) the effect of China and India (5) knowledge as a competitive advantage

4 steps in the process of MBO

(1) set objectives jointly (2) develop an action plan (3) review performance periodically (4) appraise performance and give rewards

characteristics of an effective vision statement

(1) should be appropriate for the organization and the time (2) should set high standards and ideals (3) should clarify direction and purpose (4) should encourage commitment and inspire enthusiasm etc.

Dell's 4 key strategic shifts

(1) simplification of products and services (2) increased emphasis on cloud computing (3) building a solution-based business (4) attracting new customers

the effect of China and India

China, India, and other countries have a surplus of labor that will work for lower wages than US labor globalization offshoring organizational functions can increase productivity, efficiency, revenues, and even quality

example of an action plan for means-end chain

(1) the product development team proposes 2 new product ideas by the end of March (2) the 2 new products are produced and tested in select markets by the end of April (3) product modification and marketing plans are made by the end of May (4) sales force training begins by the end of June (5) meetings are held on an ongoing basis for sales managers to discuss progress and feedback on the marketing plan with the salesforce

7 essential behaviors that effective managers display

(1) they are personally and intensely engaged with the people and businesses that make up the organization (2) they are realistic (3) they have a few clear priorities and goals (4) they emphasize accountability and follow-up (5) they reward top performers more than ordinary performers (6) they develop the talents of those that work for them, expanding their capabilities (7) they are authentic, self-aware, humble, and display self-mastery

key reasons why employees resist change

(1) they are predisposed to avoid change (2) they are fearful of the unknown (3) there is a climate of mistrust, and employees don't believe that the change will be to their benefit (4) they fear failure etc.

advantages of horizontal structures

(1) they facilitate organizational learning (2) they improve responsiveness to customers because they promote rapid communication and reduction of cycle times (3) they enjoy the advantages of teamwork, including flexibility, empowerment, and broader perspectives

competing values framework

4 kinds of organizational cultures clan, hierarchy, adhocracy, market based on 2 dimensions: (1) INTERNAL focus that promotes integration, or EXTERNAL focus that promotes differentiation (2) focuses on FLEXIBILITY and discretion, or STABILITY and control

Apple's strategies

Apple uses a differentiation strategy they used to use a focused-differentiation strategy and have little market share in the PC industry, but with its growth in the past decades, its portion of the PC business is also increasing they use innovation and responsiveness to customers to differentiate its product offerings from its competitors although they rely on innovation, it is rarely the first to introduce a new type of product or the first entrant into a new industry -- they are an "analyze": it seizes opportunities by latching on to burgeoning markets and striving to be the top competitor in those markets

virtuous circle

Southwest Airlines has several activities that reinforce one another in what is known as a virtuous circle they focus on point-to-point, regional travel efficient operations lead to low fares, which lead to customer loyalty, which leads to high utilization of aircrafts, which make operations even more efficient the "fit" among the various activities is what makes its strategy effective

horizontal design (aka team-based design)

involves the use of temporary or permanent teams to break down internal boundaries and improve collaboration cross-functional teams bring together members of different functional divisions to work together and solve problems -- these teams do not replace the team members' functional responsibilities; the members still report to their functional bosses ex: Whole Foods makes extensive use of self-managed teams, both at the store level and at the regional level -- its model of "radical decentralizing" has led to rapid growth in its profits and stock prices

operations strategy (operational planning)

is in place to ensure that all tasks performed across a company are the right tasks (i.e., to ensure operational effectiveness) operational effectiveness is a necessity; strategic success is impossible without it

disadvantages of a virtual structure

it is difficult to have behavioral norms or a strong culture in a virtual organization

quality

its ability to satisfy customers' needs organizations must constantly strive to improve the quality of the goods and services that it produces so that it can stay ahead of competitors

clear roles and accountability

its important that top managers clearly define roles, delegate authority, and hold individuals accountable for strategy execution

drug and alcohol tests

legal, but not if they are used selectively

employment test

legally considered to consist of any procedure used in the employment selection decision process encompasses things such things as application forms, interviews, and experience requirements 3 types: (1) ability tests (2) performance tests (3) personality tests

people analytics

leverages computing power and Big Data to make better selection decision AI can help with time-consuming tasks such as scheduling interviews, screening applications, ranking candidates, and administering ability tests

dogs

low growth and market share low, unstable earnings and a negative to neutral cash flow firms should divest from these markets ex: Apple TV

cash cows

low market growth, but high market share with high earnings and stable cash flows, cash cows finance stars and question marks managers should "milk" cash cows, not investing very heavily in R&D; eventually this market will mature, and the revenue stream will dry up - similar to an old cow ex: iPhone

internal development

makes sure the company gets all of the added value of a new product, but it is time-consuming and (depending on the barriers to entry of the industry) can be limited by a firm's lack of knowledge or capabilities

reactive change

making changes in response to problems or opportunities as they arise

internal recruiting

making people already employed by the organization aware of job openings primary model is job posting - the practice of placing information about job vacancies and qualifications on bulletin boards, in newsletters, and on the organization's intranet may be cheaper and less risky may boost morale and productivity among workers it restricts competition from outsiders who may be better qualified it may lead to promotions due to seniority rather than merit biggest problem: doesn't fill vacancy; it simply moves the vacancy to another level in the organization

strategy formulation

making products that have similar key success factors, are in similar stages of the industry life cycle, or occupy similar competitive positions

performance management

making products that have targets that are defined in similar performance variables

resource allocation

making products that involve the same type of management, capital investment, or similar sources of risk

step 1: set objectives jointly

managers and subordinates should come together to determine the subordinates' goals for the future employees have greater productivity and are more likely to be "on the same page" when they have participated in establishing a goal 3 types of objectives in MBO: (1) improvement (2) maintenance (3) personal development 3 types of objectives managers tend to set: (1) performance objectives (2) behavioral objectives (3) learning objectives

outputs

managers ask "what do we want from the change" to ascertain expectations the desired goals of a change should match up with the organization's strategic plan

grand strategy tools

managers can devise the grand strategy using tools for formulating the corporate-level strategy (including portfolio planning with the BCG matrix) and tools for formulating the business-level strategy (including Porter's four competitive strategies)

people

managers can take steps to change the knowledge, abilities, attitudes, and behavior of its employees

transformation process

managers diagnose problems and generate solutions by considering the four target elements of change managers ask "which levers can we pull that will produce the change we want?"

feedback

managers gather information about whether the organizational change was successful (regarding the implementation, the direct and indirect effects, deficiencies, benefits, etc.), and use it as a basis for improvement

changing

managers give employees the tools they need to change, including benchmarking, mentors, experts, and training may not just be goals that need to change, but also structure, culture, and processes

social factors

managers may make an effort to change the culture, interpersonal relations, communication, leadership, and other social factors within the organization

methods

managers may need to modify their technology, job design, or processes in order to remain current and effective

tools for turning strategy into action

managers must eliminate potential roadblocks to successful implementation, such as organizational structure, organizational culture, and employees' resistance to change

understanding current employee needs

managers perform a job analysis, write a job description, and write a job specification to determine current staffing needs

candid communication

managers should create a culture of honesty and openness, and they must listen to and encourage debate among subordinates

appropriate human resource practices

managers should ensure that the organization's recruiting, selection, training, compensation, promotion, transfers, and layoffs fit in well with the strategy

step 2: develop an action plan

managers should prepare action plans for both work groups and individuals to detail how objectives will be attained goal attainment is most likely when managers place an emphasis on results on a time scale action plans can be prepared for work units and for individuals breaking objectives into smaller and more specific sub-goals (which is particularly useful for small businesses) reduces procrastination

unfreezing

managers stir up motivation to change by encouraging workers to give up the old ways of doing things more radically innovative change requires more time in this stage

feedback loop

managers use a feedback loop in which they continuously track the internal and external environment for deviations, and use feedback to reformulate plans, rethink policies, and take corrective action

integrity tests

measure an applicant's honesty, reliability, dependability, and prosocial behavior based on questions relating to past experiences involving integrity and ethics

personality tests

measures personality traits, like need for achievement, energy, emotional intelligence, ability to be a team player, and sociability some companies are doing ethics and integrity tests to determine if a candidate's morals will coincide with the organization's ethics most famous personality test: Myers-Briggs Type Indicator personality traits are difficult to measure

business-level strategy

middle level of strategic management senior managers below the C-suite create business-level strategies that focus on individual business units (product lines) they consider questions such as, "how will we compete in this market?" ex: budgeting for marketing, new product development, and facilities expansion

tactical planning

middle managers planning how the overarching goals will be accomplished for the next 6 to 24 months middle managers determine what contributions their departments or similar work units can make with their resources middle managers (functional managers, department managers, product-line managers, etc.) have to make plans that implement strategic plans handed down from above they must supervise lower-level managers and ensure that tactical plans are being properly implemented managers are implementing the strategic plans, and supervising the activities of operational managers managers have to make decisions without a detailed procedure developed by the top management team

step 1: determine the mission, vision, and values statements

mission is its reason for being, which is expressed in a mission statement vision is where it wants to go, which is expressed in a vision statement values statement describes the organization's core priorities, what it stands for, what its products contribute to the world, and what its employees stand for Dell's mission statement: "our mission is to be the most successful IT systems company in the world by delivering the best customer service experience in all markets we serve"

suppliers' bargaining power

more concentrated the industry, the greater the bargaining power of suppliers a business can decrease suppliers' bargaining power by diversifying its supply chain (i.e., getting components and services from multiple different suppliers) only a few firms that could supply the product, each supplier has a lot of bargaining power high switching costs for the buyer or needing to purchase a specialty product increase suppliers' bargaining power sources influencing supplier power: differentiation of inputs, the threat of forward integration, and the importance of volume and cost relative to total industry purchases suppliers of computer processors have high bargaining power, while suppliers of commodity products have low bargaining power

horizontal design vs matrix structure

more efficient and flatly organized with cross-functional teams than a matrix structure horizontal structure: each employee reports to their project team manager, who reports to each of the functional managers matrix structure: each employee reports to a project manager and to a functional manager

interviewing

most commonly used selection technique face-to-face interviews are perceived as being fairer, and they tend to lead to higher job acceptance intentions on the part of the job candidates

can firms implement 2 strategies at the same time?

most firms are unable to implement a cost-leadership strategy and a differentiation strategy simultaneously because they each require different resources and different skill sets ex: Walmart's cost-leadership strategy results in decisions and tradeoffs unlike those make by Nordstrom, which uses a differentiation strategy

promotion

moving an employee to a higher position in the organization must be fair

diversification

moving into a new line of business

threat of new entry

new competitors take customers away from existing organizations high barriers to entry --> more costly it will be fore new firms to enter the market and the less competitive the market will be ex of high barriers to entry: pharmaceutical industry ex of low barriers to entry: restaurant industry

adjustment process

new employees adjust themselves to fit the organization's work environment, including the work roles, team norms, and corporate cultural values

learning process

new employees try to establish an understanding of the workplace's physical, social, strategic, and cultural dynamics

union shop

non-union workers can be hired, but they must join the union within a certain amount of time once they are hired

vertical integration

occurs when a firm expands into the industries that provide supplies used in producing its products, or into the industries that distribute and sell its products it should leverage a firm's competitive advantage and create synergies whenever possible ex: Disney Plus is an instance of Disney vertically integrating from being the content producer to also being the distributor ex: Netflix has begun producing its own content, and Starbucks has begun buying and roasting its own coffee

adverse impact

occurs when an employment practice or procedure negatively affects a protected class of individuals employers must be able to justify any job specifications or requirements ex: requiring a college degree might have an adverse impact on groups with lower college attendance rates

related diversification

occurs when an organization operates, under one ownership, several separate businesses that are related to one another when a firm acquires a new business that is related to the firm's existing business portfolio, increases revenues because the firm has new products and services to sell

unrelated diversification

occurs when an organization, under one ownership, operates several unrelated businesses ex: Warren Buffet's company, Berkshire Hathaway, owns firms in many different markets, from insurance to candy to shoes when a firm acquires another company in a completely unrelated business, reduces risk because the firm can offset a decline in one industry with company's profits from another industry

change and acquisition phase

once a person fully understands his or her work role, he or she can adjust to the values and norms of the work group

encounter phase

once a person is hired, a person comes to learn what the organization is really like, and the person adjusts his or her expectations appropriately

situation interview

one type of structured interview in which the interviewer used hypothetical situations to test the candidate's ability to do the job, and to operate under pressure

provide organizational identity

organizational culture provides organizational members with a sense of who they are and what they're doing

strategy and structure

organizational structure should be based, in part, on the strategy the organization hopes to implement through its structure organizational structure should facilitate the achievement of strategic goals, so strategic goals should drive structure ex: firm focused on cost-leadership would probably have a functional, formal structure; a firm focused on differentiation would need a more organic, flexible structure organizations structure should evolve as strategy evolves

strategy

organizations may have to change their strategies in response to changes in the marketplace

customer responsiveness

organizations must be responsive to customer needs and wants

segmentation and niche products

organizations no longer cater to mass markets; they now cater to narrow segments of customers they must offer a wide variety of products to more specific groups of customers

wage rates

past, unions tried to negotiate for similar wage rates for all union employees in similar jobs recent, negotiate for a two-tier wage contract in which new employees are paid less than veterans

knowledge workers

people whose work's main function or concern involves generating or interpreting information rather than manual labor more time --> employees become more valuable because they learn firm-specific skills and knowledge -- why firms are willing to invest in training and developing employees

divisional structure

people with diverse occupational specialities are put together in formal groups with similar products or services, customers or clients, or geographic regions can be set up as: (1) product divisions (2) customer divisions (3) geographic divisions

functional structure

people with similar occupational specialties are put together in formal groups focused on efficiency and is best for small firms or firms with a single programmatic focus may have separate marketing, finance, production, and HR departments, each headed by a VP

3 core processes of execution are the 3 core processes of business

people, strategy, and operations effective management of these 3 core processes drive successful strategy execution

areas that need change

people, technology, structure, and strategy

strategic planning provides direction and momentum

planning involves developing the firm's strategy, which is its theorized idea of how to be successful a plan allows a company to shape itself so it can be successful without a plan, managers tend to focus too much on the present, preventing them from being able to predict and take advantage of opportunities helps managers determine the firm's value proposition

when is planning most important?

planning is especially important during transitions and big changes, which create uncertainty not only must organizations must determine their objective, they must also think about whether it is possible to achieve and how they are going to achieve it

what does planning help with?

planning will work out what you want and determine whether you can achieve what you want it helps you to figure out the time frame it will take for you to be successful it encourages you to think about how you will accomplish the goal or task at hand

single-use plans

plans developed for activities that are not likely to be repeated in the future includes programs and projects

standing plans

plans developed for activities that occur repeatedly over a period of time include rules, procedures, and policies allow for consistency and efficiency

efficiency

produce as much as possible, using as few resources (labor, raw materials, etc.) as possible

commitment of top management

productivity gains are highest when top management is committed to MBO

Americans with Disabilities Act (ADA) of 1990

prohibits discrimination based on disability and requires employers to make "reasonable accommodations" for an individual's disability

Title VII of the Civil Rights Act of 1964 (amended 1972)

prohibits discrimination based on race, color, religion, national origin, sex, or sexual orientation

nondisparagement agreement

prohibits them from criticizing the organization

sources of competitive intelligence that are very rarely used

purchasing a product, Freedom of Information Act requests, case studies, mail questionnaires, and focus groups

strategy implementation

putting strategic plans into effect without this, strategic planning is ineffective

behaviorally anchored rating scale (BARS)

rates employee performance according to scales of specific behaviors

readiness for change

refers to the attitudes, beliefs, and intentions of organizational members about the extent to which change is needed an possible

systems viewpoint

regards the organization as a set of interrelated parts (inputs, transformation processes, outputs, and feedback) operating together to achieve a common purpose

Equal Pay Act of 1963

required organizations to pay men and women equally for performing equal work

Patient Protection and Affordable Care Act of 2010

requires firms with 50 or more employees to provide health care coverage

Age Discrimination in Employment Act (ADEA) of 1967 (amended 1978 and 1986)

restricts mandatory retirement and prohibits age discrimination

bad plans

result from information overload, inferior group dynamics, faulty assumptions about the future, or poor judgements about the organization's capacities can be just as bad as not having a plan at all

question marks

risky new ventures with a high market growth rate but low market share results in low but growing earnings and a negative cash flow managers should carefully analyze question marks to determine if they will grow into stars or diminish into dogs ex: Apple's operating system

microlearning (aka bite-sized learning)

segments material into bite-size content employees must master a small lesson before advancing to anything else includes interactive lessons that take less than 5 minutes

operational goals

set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals ex: an operational goal set by Southwest Airlines is to unload, refuel, and clean arriving planes efficiently (i.e., turn planes around in 20 minutes) considered short-term goals because they span less than a year

tactical goals

set by and for middle managers and focus on the actions needed to achieve strategic goals ex: a tactical goal set by Southwest Airlines' middle managers is to cut costs and keep prices low considered short-term goals because they span less than a year

strategic goals

set by and for top management (i.e. the C-suite) and focus on objectives for the organization as a whole ex: a strategic goal set by Southwest Airlines' top managers is to remain highly profitable -- this goal led to the strategic decision to fly only Boeing 737s to reduce operating, maintenance, and training costs considered long-term because they span 1 to 5 years

Occupational Safety and Health Act (OSHA) of 1970

sets mandatory health and safety standards to which organizations must adhere

maintenance objectives

show intent to keep performance at previously established levels ex: "continue to meet sales goals specified last month"

strategic management in small firms

small firms can successfully carry out strategic management as well strategic planning requires a long-term orientation many small businesses do not engage in strategic planning because they have a short-term focus

collective attitudes and behavior

social processes of a firm's culture lead to collective attitudes and behavior, including the work attitudes, motivation, and job satisfaction of its employees

goals (aka objectives)

specific commitments to achieve a measurable result within a stated period of time they are shaped by its mission, vision, and values

SMART goal

specific, measurable, attainable, results-oriented, and has target dates

operational plans

specify how the work will get done and what resources will be needed to ensure that the organization's objectives for the next 1 to 52 weeks will be achieved efficiently and effectively break tactical plans into actionable short-term goals

step 5: monitor the process to maintain strategic control

strategic control and feedback loop

step 4: execute the strategy

strategic implementation and execution are central parts of any company's overall strategy managers must eliminate potential roadblocks to successful implementation, such as those within organizational structure, within organizational culture, or due to employees' resistance to change

strategic planning vs planning

strategic planning is only part of the overall process of the planning function

strategy involves creating a unique and valuable position

strategic positioning 3 ways to create a unique and valuable position in the minds of customers: (1) variety-based positioning (2) needs-based positioning (3) access-based positioning

operational efficiency vs strategy

strategy is a plan for effectively competing in the market operational efficiency is performing tasks better than competitors

Civil Rights Act of 1991

strengthens the Civil Rights Act of 1964 by increasing damages and shifting the burden of proof to the employer

market culture

strong external focus, is driven by competition, and values stability and control effective execution, as shown by profits, productivity, and results, is more important than job satisfaction or employee development individuals who work hard and produce results are rewarded appropriately ex: Amazon because it focuses on things such as market trends and productivity goals for enhancing competitive advantage leads to the best results

cascading objectives

structuring objectives in a unified hierarchy, becoming more specific at lower levels in the organization organizational objectives are the broadest and are set by top managers go into divisional objectives, then departmental objectives, and finally individual objectives, which are set by individual employees

job description

summarizes what the holder of a job does and how and why he or she does it ex: information about essential job functions and duties, the culture of the work environment, salary and benefits

dismissal

take the form of layoffs, downsizing, or firings

discipline

temporarily removing an employee from his or her job

competitive advantage

the ability of an organization to produce goods or services more effectively and efficiently than competitors, thereby outperforming them goal: make it sustainable, which continuously gives the firm a leg up in the industry

rites and rituals

the activities and ceremonies, planned and unplanned, that celebrate important occasions and accomplishments of the organization or its employees ex: award ceremonies and conventions

division of labor (work specialization)

the arrangement of having discrete parts of a task done by different people divides complex work into discrete tasks that can be handled by specialists

SWOT analysis for Toyota

Strengths: they implemented the "Toyota Way," which stresses continuous improvement and the elimination of waste -- high brand value of quality and reliability Weaknesses: their image in passenger safety has suffered because of widely publicized recalls for potential hazards Opportunities: consumer demand for hybrid cars, which Toyota has invested in, is predicted to increase Threats: they face a constant threat from currency exchange fluctuations as well as from competitors, particularly as the US car market is becoming more saturated

management by objectives (MBO)

a 4-step process with the purpose of motivating subordinates to achieve organizational goals a departure from the top-down approach traditionally used to establish goals for subordinates (i.e., administrative management) a proactive, results-oriented approach that allows individuals at all levels of the organization to collaborate and participate in the goal-setting process key idea is that lower-level employees will be more committed to a goal if they are involved in setting it

business plan

a blueprint for action that details how an organization is going to realize its goals through its strategic plans and its operating plans a written document that defines the firm's objectives, strategy, and measures of success includes the business model

organizational chart

a box-and-lines illustration that shows the formal lines of authority and the organization's official positions or work specializations includes: the vertical hierarchy of authority and the horizontal specialization

technology

a catch-all term that refers to more than just computers; it refers to any machine or promise that enables organizations to gain a competitive advantage in the conversion of inputs to a finished product

hollow structure (aka network structure)

a central core of the organization is complemented by outside, independent firms that provide outsourced goods and services and are linked to the central core via computers makes extensive use of information technology ex: Nike is best at designing new shoes and marketing its products, but they outsource other aspects like production so it can focus on improving what it does best

product innovation

a change in the appearance or performance of a product or service, or the development of a new one ex: new models of grooming razors make product innovations (disposable, multiple blades, electric shavers) that change and improve on the first razors

process innovation

a change in the way a product or service is conceived, manufactured, or disseminated just as important as product innovation ex: the internet has introduced major process changes that have completely reshaped the way people consume media, shop, and do business

single-product strategy

a company makes and sells only one product within its market benefit: it allows the organization to focus its efforts on one product risk: any problem within the industry, such as increased competition, can put the entire business in jeopardy

diversification strategy

a company operates several businesses to spread out the risk among multiple markets or market segments or to increase its revenue 2 diversification strategies: (1) unrelated diversification (2) related diversification

examples of organizational opportunities or threats

a company's market segment analysis, government regulations, and industry growth analysis

fundamentals of planning

a company's mission, vision, and values statements guide strategic planning strategic planning guides tactical planning and tactical planning guides operational planning all 3 types of planning involves the generation of goals and action plans

examples of organizational strengths or weaknesses

a company's production process, product quality, and customer service reputation

planning/control cycle

a continuous feedback loop for each level of planning includes 2 planning steps and 2 control steps

hierarchy of authority (unit of command or chain of command)

a control mechanism giving formal power to make sure the right people do the right things at the right times a multiple-tiered hierarchy is best because it reduces each manager's span of control to a manageable level

plan

a document that details how goals will be met

modular structures

a firm assembles product chunks, or modules, provided by outside contractors "hollowest or hollow" structures similar to hollow, the difference being that in a modular structure EVERYTHING is outsourced, rather than just a few departments often seen in the medical field -- when you go to your primary care physician, the doctor's office provides you with a diagnosis, but the doctor's office is actually linked to (or can "chunk" out) everything else like a lab test or a specialist MySQL uses this Dreamliner used this and failed

threats of substitute products

a firm faces more competition when there are more available substitutes for its products and services if a product is a commodity, buyers' power increases because there are no switching costs

strategic management

a five-step process for formulating and implementing strategies and strategic goals involves managers from all parts of the organization carrying out the 5 steps

boundaryless organization

a fluid, highly adaptive organization whose members, linked by information technology, come together to collaborate on common tasks; the collaborators may include competitors, suppliers, and customers have emerged as computer connections and virtual organizations have proliferated 3 organizational designs that fall under this category: (1) hollow structure (2) modular structure (3) virtual structure

building scenarios

a forecasting technique that involves visualizing future possibilities which can help make contingency planning stronger

defensive strategy (aka retrenchment strategy)

a grand strategy that involves a reduction of the organization's efforts can do this by eliminating unprofitable parts of itself in order to attempt to rebuild more efficiently and restore profitability

growth strategy

a grand strategy that involves expansion - as in sales revenues, market share, number of employees, or numbers of customers or clients served type: innovation strategy (focuses on increasing market share or profits by innovating improvements in products or services)

stability strategy

a grand strategy that involves little or no significant change not necessarily easy; if the firm faces stiff competition or a changing environment, managers may have to fight hard to maintain their competitive position in the market generally used when a firm finds that it cannot handle rapid growth at all (it leads to mistakes and complaints), or if it has been growing rapidly and now needs a period of stability in order to quality control its growth

trend analysis

a hypothetical extension of a past series of events into the future ex: time-series analysis takes historical sales data and projects it into the future to predict long-term trends, cyclic patterns, and seasonal variations if the historical data are flawed, the forecast will also be flawed

strategy

a large-scale action plan that sets the direction for an organization management's "best guess" as to what it needs to do to promote long-term prosperity ex: Walmart's strategy is to provide customers with what they need as cheaply and quickly as possible

benefit corporation (B corporation)

a legal entity that is required to adhere to socially beneficial practices

BCG Matrix

a means of evaluating business units based on growth rate and market share

VRIO analysis

a method for analyzing the competitive potential of a resource or capability 4 questions: (1) value (2) rarity (3) imitability (4) organization valuable + rare = temporary competitive advantage valuable + rare + costly to imitate = firm has an opportunity to exploit its value, rarity, and imitability for a competitive advantage

management by exception

a more passive form of leadership in which managers don't intervene with employee problems until they are severe enough to require immediate action

stories

a narrative based on true events, which is repeated - and sometimes embellished - to emphasize a particular view

union security clause

a part of the labor-management agreement that requires employees to either join a union or pay dues to it to compensate the union for negotiating on their behalf

360-degree feedback

a performance appraisal method in which employees are rated not only by their managerial supervisors but also by peers, subordinates, and even themselves organizations ask the employee to choose 6 to 12 other individuals to provide anonymous performance appraisals builds trust among members

heroes

a person whose accomplishments embody the values of the organization motivate current organizational members to excel many companies are deeply tied to their founders' beliefs, seeing founders as role models to emulate or as the physical embodiment of the ideal company employee ex: Sam Walton, founder of Walmart, had his frugal choices set the tone in placing value on efficiency and a lean cost structure

promote social-system stability

a positive, reinforcing work environment tends to be a more stable one, and stability promotes efficiency and productivity

arbitration

a process in which a neutral third-party arbitrator listens to both sides and renders a binding decision

mediation

a process in which a neutral third-party mediator listens to both sides, makes suggestions, and encourages the parties to reach a solution mediators do not make binding decisions

3 major corporate management tasks for strategic similarity

a related diversification decision should be influenced by how much strategic similarity the businesses have with regard to these 3 tasks: (1) resource allocation (2) strategy formulation (3) performance management

human resource inventory

a report listing an organization's employees, tracking each individual's education, training, certifications, experience, and other important information regarding the skills of the company's talent useful tool for identifying employees for promotion from within

example of standing plans

a retailer's policy might be that a purchase includes warranty protection for product defects procedure might be how a customer goes about claiming the warranty, such as requiring a receipt rule might be that the retailer will honor a warranty (for a certain time period) by replacing the item employees have policies, procedures, and rules about appropriate behavior, compensation, sick leave, and other human resource functions

program

a single-use plan encompassing a range of projects or activities

project

a single-use plan that encompasses a smaller range of tasks or activities than a program

quid pro quo

a situation in which there is tangible economic injury (i.e., a person's hiring or opportunities for benefits or advancement will be jeopardized if he or she does not acquiesce to the sexual demands of others)

rule

a standing plan designating specific required action, with no room for interpretation

policy

a standing plan that outlines the general response to a designated problem or situation

procedure (aka standard operating procedure)

a standing plan that outlines the response to a particular problem or circumstance

SWOT analysis (aka situational analysis)

a strategic planning tool that involves the search for Strengths, Weaknesses, Opportunities, and Threats affecting the organization internal: strengths and weaknesses external: opportunities and threats

strategy requires the creation of a "fit" among activities

a strategy should align an organization's activities to reinforce one another in a strategic fit a company acquires a competitive advantage if it can achieve a fit among its core activities more difficult to copy an entire system than its separate parts, so developing a complex, integrated activity system will create barriers to entry that result in long-lasting sustainability of the competitive advantage ex: virtuous circle

simple structure

a structure with centralized authority, a flat hierarchy, few rules, and low work specialization firms in their earliest stages tend to use this some of these eventually grow out of this and into a complex one

organization

a system of consciously coordinated activities or forces of 2 or more people 3 basic kinds: (1) for-profit (2) nonprofit (3) mutual-benefit

organizational culture (aka corporate culture)

a system of shared beliefs and values that develops within an organization and guides the behavior of its members can be described as the "social glue" that guides employee behavior goes beyond the formal, written statements in the company's policy manual; culture acts as an informal control mechanism

organizational culture

a system of shared beliefs and values that develops within an organization and guides the behavior of its members based on cultural values - including collective beliefs, assumptions, and general feelings about what is good, valuable, rational, and normal combo of observable artifacts, espoused and enacted values, and basic assumptions of employees

organizational structure

a system of tasks and reporting relationships that coordinate and motivate an organization's members so that they can work together to achieve the organization's goals managers must make decisions about division of labor, the chain of command, and how workers will coordinate with one another

force-field analysis

a technique that can be used to determine the forces that will promote change and the forces that will prevent it managers first identify the forces for change (thrusters) and against it (counterthrusters), and then they take steps to remove the negative forces and enhance the positive ones

market share

a unit's share of the market related to competitors' shares

forecast

a vision or projection of the future use this to determine their strategies going forward can have a big impact on strategy, and thus, organizational success 2 types of forecasting: (1) trend analysis (2) contingency planning

examples of barriers to entry

absolute cost advantages, switching costs, proprietary products or learning curve, access to inputs and distribution, brand identity, capital requirements, government policy, economies of scale, technology, and expected retaliation

benefits (aka fringe benefits)

additional nonmonetary forms of compensations health insurance, holidays off, retirement plans, vacation days, etc. "golden parachute": generous severance packages for executives who have to leave the company after a takeover

creativity

advancing new and imaginative ideas into reality

step 3: devise the strategy

after doing an industry analysis, managers must come up with a strategy for mitigating threats after the organization has determined its mission and vision, it must translate them into a corporate strategy

organizational outcomes

all aspects of organizational culture ultimately drive organizational outcomes regarding levels of effectiveness, innovation, and stress

competitive rivalry

all of the preceding forces impact this firms in industries with more competition tend to be less profitable a firm can mitigate the negative impacts of competition by differentiating itself from the competition factors that increase competition rivalry: high exit barriers and slow industry growth the internet has intensified rivalries

acquisitions and mergers

allow a company to quickly expand its reach and enter a new market, while still maintaining management control it tends to be expensive and requires integrating the 2 company cultures

joint ventures and strategic alliances

allow companies to enter new markets more quickly and without a large investment, but they involve sharing rewards and thus require trust between companies firms can have difficulty choosing a partner strategic alliances have a very high failure rate

strategic planning inspires new ideas

allows an organization to focus on the future as well as the present, encouraging innovation enables firms to recognize trends and lucrative opportunities for expansion, development, or growth can lead to a firm potentially reinventing the basis of competition

Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985

allows employees to retain their health insurance coverage for a period of time after being laid off

wage reopener clause

allows for the renegotiation of wage rates over the life of the contract

strategic planning cultivates a sustainable competitive advantage

allows organizations to be more dynamic strategic plans can be modified as firms continually develop their capabilities

advantages of a matrix structure

allows the organization to simultaneously manage multiple organizational dimensions, and communication is built into the system, which allows for flexibility allows the organization use its employees for projects in addition to traditional functional work

resistance to change

an emotional and behavioral response to real or imagined threats to change in an established work routine

unity of command

an employee should report to no more than one manager, to avoid inconsistent priorities or conflicting demands

girevance

an employee's complaint that management has violated the labor-management agreement the union's shop steward is responsible for handling this -- if he or she cannot resolve the issue, it is passed up to the union's chief shop steward, and then to the union's grievance committee

material symbols

an object, act, quality, or event that conveys meaning to other ex: Walmart's original corporate headquarters had a no-frills waiting room, demonstrating its dedication to low costs and functionality over appearance ex: the attire of employees might signal the level of formality expected

virtual organization

an organization whose members are geographically separated, usually working through e-mail, collaborative computing, and other computer connections

technology

any machine or process that enables an organization to gain a competitive advantage in changing materials used to produce a finished product organizations often need to modify these to remain current and effective

bullying

any repeated mistreatment, whether it is in the form of verbal, nonverbal, physical, or psychological behavior that results in a person feeling threatened, intimidated, or humiliated

providing direction

as an informal control system, organizational culture gives employees a sense-making device indicating where the organization is going

knowledge as a competitive advantage

as computers and information technology gradually replace skilled workers, knowledge workers (who use abstract reasoning and problem solving to deal with non-routine information) are becoming more important and becoming known as data workers

predicting future employee needs

as technology and markets evolve, job descriptions change and new jobs are created predicting future staffing needs requires an understanding of the organization's vision and strategic plan staffing sources can be INTERNAL or EXTERNAL

structured interviews

asking each applicant a fixed set of questions and comparing their responses to a standardized set of answers 2 kinds: (1) situational interview (2) behavioral-description interview

unstructured interviews

asking probing questions to find out what the applicant is like involve no set questions and no procedure by which the interviewer can score the interviewee's responses, so it is highly subjective assess job-related personality traits more accurately than structured interviews

performance tests (aka skills tests)

assesses the applicant's performance on actual job tasks ex: when receivers have to demonstrate their pass-throwing or kicking ability at the combine, it is a performance test because it is testing a specific, job-related skill assessment center: an elaborate type of performance test in which management candidates participate in activities for a few days while being assessed by evaluators -- more accurate than ability tests for predicting future success on the job

ability tests

assesses the general physical, mental, mechanical, or clerical abilities of applicants ex: NFL hopefuls life weights during the scouting combine

strategic positioning

attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company "performing different activities from rivals, or performing similar activities in different ways" according to Michael Porter

external recruiting

attracting top applicants from outside the organization can be advertised in newspapers, employment agencies, job-placement offices, and through word of mouth increasingly posting job openings on the internet and using social media allows firms to bring in workers with fresh viewpoints, specialized knowledge, and experience expensive and time consuming risky internal recommendations are more respected than those from external references chosen by the applicant

cost-of-living adjustment (COLA) clause

automatically increases wage rates for the cost of living (as measured by the consumer price index) over the period of the labor-management contract

collective bargaining

bargaining with management on behalf of all union members

subjective appraisals

based on a manager's perceptions of an employee's traits or behaviors rely on the perception of the supervisor, which is subject to biases trait appraisals: rate employees based on certain general characteristics, such as attitude and leadership, and therefore are prone to personal bias behavioral appraisals: rate employees based on specific, observable, job-related aspects of performance type: behaviorally anchored rating scale (BARS)

objective appraisals (aka results appraisals)

based on facts and are often numerical useful because they measure results independently or personal biases and friendships; for this reason, they are harder to challenge in court based on measurements of sales made, journal publications, product defects, etc.

ways innovations can be classified

based on their type (product vs. process) and their focus (improvement vs. new direction)

background information

basic information from his or her application and resume can check the references listed on the resume common distortions on resumes are lies about education, job history, achievements, criminal background, and immigration status other sources: consultations with references and credit scores

Case Study: Cisco

before 2001, Cisco used a differentiation strategy because it was a product-based company that integrated its products to make them more accessible and helpful to consumers the company had a customer-focused culture and a corresponding divisional structure industry began to get crowded so they increased integration of products and technologies, making divisions more centralized and less specialized -- example of functional structure benefits of structure: achievement of business outcome, engagement of functions to support the goals of the boards and councils, etc. drawbacks of structure: lack of authority to obtain and distribute resources, misalignment of goals among different groups, etc. levels of cultural change from a culture of competition to a culture of collaboration: decision making, leadership, resources, and accountability 2010, went from a functional structure to a matrix structure to allow for grater collaboration, efficiency, and flexibility 2011, released updated values

anticipatory socialization phase

before joining the organization, a person learns more about the values and needs of the job and considers how he or she might fit in

strengths of Dell

brand is valued at $7.5 billion has a large global footprint to work with has a broad product and service portfolio etc.

radical innovation is hurting traditional companies

brick-and-mortar retailers are increasingly facing pressure from the new model of the retailing industry with online shopping

steps of the planning process

broadest statement of the organization's goals to the narrowest directive (1) mission statement (2) vision statement (3) values statement (4) strategic planning (5) tactical planning (6) operational planning

socialization

broken down into 2 processes: (1) learning process (2) adjustment process

Porter's four competitive strategies (aka four generic strategies)

business-level strategies that target either wide markets (cost-leadership strategy and differentiation strategy) or narrow markets (cost-focus strategy and focused-differentiation strategy)

buyers' bargaining power

buyers have more leverage when there are not many buyers in the market, when the buyer purchases a high volume, and when the buyer is informed and price-sensitive -- an individual buyer is more important to suppliers more buyers' bargaining power when there are many firms that could supply the product, giving each individual supplier relatively little bargaining power the creation of the internet put more price pressure on suppliers by allowing buyers to compare prices much more quickly and easily factors affecting buyer power: buyers' incentives, brand identity, and the threat of backward integration more substitutes a good has, the greater the bargaining power of customers

strategic formulation process

can be broken down into 2 main stages: the strategic planning process and the implementation process

processes to develop human capital

career development, rewards and recognition, performance appraisals, recruiting, and workforce planning these drive key performance metrics like productivity, quality, innovation, and customer service meeting these metrics leads to top-level business results such as revenue growth, return on investment, and return on shareholders

proactive change (aka planned change)

carefully thought-out changes made in anticipation of possible or expected threats or opportunities

structure

change and turbulence in the market may warrant managers reconfiguring the firm's activities and tasks

matrix structure

combines functional and divisional chains of command in a grid so that there are 2 command structures - vertical and horizontal employees report to 2 bosses: their functional manager and their project manager (or divisional manager) violates unity of command -- must have a very strong culture for a matrix structure to be effective the functional structure usually does not change, the divisional structure may change by product, customer, brand, or geographic region

sources of competitive intelligence that are moderately used

communication with customers, contact with sales representatives, internal databases, internal documents, and telephone interviews

formal appraisals

conducted at specific times throughout the year and are based on performance measures that have been established in advance the manager should point out where the employee's performance has been good and where it has been poor

informal appraisals

conducted on an unscheduled basis and consist of less rigorous assessments of employee performance beneficial because: (1) they happen more regularly than formal appraisals so they help prevent surprises (2) allows the manager to provide support in order to facilitate improvements in ares of the employee's work where performance is deficient (3) managers can receive feedback and adjust goals for employees

strategic human resource planning

consists of developing a systematic, comprehensive strategy for understanding current employee needs and predicting future employee needs the organization should look at both CURRENT and FUTURE employee needs

strategic control

consists of monitoring the execution of strategy and making adjustments if necessary

human resource management (HRM)

consists of the activities managers perform to plan for, attract, develop, and retain an effective workforce organization's people are its most important resource, so effective HRM is key to success a key component of the strategic planning process

base pay

consists of the basic wage or salary paid to employees in exchange for doing their jobs based on what competitors pay their employees, whether jobs are unionized or hazardous, the individual's level in the organization, the individual's experience, and the prevailing pay levels in the organization's geographic area or industry

execution

consists of using questioning, analysis, and follow-through to mesh strategy with reality, align people with goals, and achieve promised results

compensation

consists of wages or salaries, incentives, and benefits wages and salaries are typically the major component of compensation, some organizations (like nonprofit firms or start-ups) provide highly attractive incentives and benefits in lieu of high levels of compensation

facilitate collective commitment

culture promotes loyalty toward and respect for the organization when employees work for a company with a strong corporate culture that they identify with, they will work harder and remain with the organization longer

what is important for MBO to work effectively?

deadlines deadlines help employees focus by helping them prioritize tasks, and they provide a system for feedback they are strong motivators help people concentrate on the task at hand while keeping the "big picture" in perspective

market growth rate

deals with how fast an entire industry is growing

decentralized authority

decisions are made by middle-level and supervisory-level managers to whom higher managers have delegated power encourages managers to solve their own problems, and it increases organizational efficiency and flexibility by allowing managers to make decisions quickly

performance objectives

define an outcome or end result that is to be accomplished ex: reduce food spoilage by 10%

behavioral objectives

define behaviors that are necessary for achieving an outcome ex: ensure food is properly sealed and stored

learning objectives

define competencies or knowledge that are to be acquired ex: attend sales training class

personal development objectives

define the individual's personal goals that are to be fulfilled it's not just about what the employee can do for the firm,; it's also about what the firm can do for the employee ex: "take a particular software course to gain some of the qualifications required for a promotion"

improvement objectives

define the performance level that is to be accomplished for a specific area in a specific way ex: "increase food sales by 5%"

operating plan

defines how the business will be conducted, and identifies clear targets such as revenues, cash flow, and market share

action plan

describes the course of action needed to achieve the stated goal shows how day-to-day activities of employees across the organization (i.e., the means) work in tandem in order to deliver overarching strategic goals (i.e., the ends) helps managers track progress toward the objective of generating 10% more revenue in the coming months forms the basis for an operating plan

person-organization fit

describes the extent to which an individual's personality and values reflect the climate and culture of an organization good fit is highly correlated with happier work environment and lower stress, and therefore higher levels of performance

business model

describes the firm's position, operations, competitive advantage, marketing strategy, method of financing, and expected revenues and expenses the outline of how an organization will deliver its value proposition

means-end chain

describes the hierarchy of organizational goals (operational, tactical, and strategic) connects short-term goals (the means) to the accomplishment of long-term goals (the ends) uses cascading objectives a firm starts with the strategic goal: "Achieve 10% increase in sales from new customers within 1 year" the tactics involved with this strategic goal (such as budgeting, or allocating resources) lead to the organizational goal: "Begin offering 2 new products within 1 year: this operational goal can be broken into an action plan, which details the course of action or tasks needed to achieve the stated goal

job specification

describes the minimum qualifications a person must have to perform a job ex: knowledge, skills, abilities, and physical demands that must be met for applicants to be eligible

business-level strategy

designates how a firm will be successful in each of its markets

corporate-level strategy

designates what markets or industries a firm will compete in company can pursue a (1) single-product strategy, or a (2) diversification strategy

organizational architecture

determined by the organization's structure, culture, and human resource management system the combo of these 3 elements helps managers in their organizing role, as they attempt to use organizational resources effectively and efficiently an organization's structure, culture, and human resource management systems contribute to: (1) they establish relationships among employees (2) they establish formal reporting relationships (3) they establish a standing plan

reverse innovation

developing products in emerging countries and distributing them globally

training

educating employees how to do better in their current jobs

development

educating employees in the skills and knowledge they will need to do their jobs in the future

visible leadership

effective leaders are able to get their followers to adopt behaviors that lead to successful strategy execution managers can display visible leadership by motivating people, by modeling desired behaviors, and by shaping culture, norms, and values this is the key element of successful strategy execution

onboarding

employee socialization programs designed to help employees integrate, or fit in involves familiarizing new employees with policies, procedures, organizational culture, and politics, as well as clarifying the expectations and responsibilities of their new work role

how unions are formed

employees that want to organize must sign authorization cards designating a particular union as their bargaining agent once 30% of workers have designated a certain union as the bargaining agent, they can ask the employer to recognize the union employer refuses --> workers can petition the National Labor Relations Board (NLRB) to assign a unit as a bargaining unit for the workers election is held --> 50% or more of the workers agree to unionization --> union becomes certified

closed shop

employers are restricted to hiring existing union members for a job illegal today

functional (task-based) knowledge

enables you to leverage your experience for making connections you can improve strategic thinking by broadening the scope of your knowledge, as well as by increasing the depth of your knowledge in your primary area of expertise (e.g., through internships)

Equal Employment Opportunity Commission (EEOC)

enforces antidiscrimination and other employment-related laws EEOC enforces EEO laws, which cover 3 main areas: (1) sexual harassment (2) discrimination (3) affirmative action

National Labor Relations Board (NLRB)

enforces procedures whereby employees may vote to have a union and engage in collective bargaining - negotiations between management and employees about disputes over compensation, benefits, working conditions, and job security ex of a union: NFL Players Association labor unions have been on a decline in the US

organizational Threats

environmental factors that hinder an organization's achievement of a competitive advantage ex: a college's threats may include a poor economy, state budget cuts, or a decrease in the number of applicants

organizational Opportunities

environmental factors that the organization may exploit for competitive advantage ex: a college's opportunities may include trends in the job market, increasing diversity of the applicant pool, and an increase in high school students taking college classes

Fair Labor Standards Act of 1938

established minimum living standards for workers engaged in interstate commerce, including the establishment of a maximum workweek and a federal minimum wage banned child labor

people

execution in terms of the first and most important core process, people, involves hiring, training, and motivating the right people with the right skills to get the job done the focus should not be on who is currently in the position, it should be on who will benefit the firm in the future most important because all work requires human interaction, effort, or involvement

case study: Dell

experienced high profits and rapid growth due to its low-cost, direct-marketing method, and just-in-time business model PC industry, as well as Dell, suffered in early 2000s Michael Dell resigned in 2004 and came back in 2007, which was the year when HP surpassed Dell as the industry leader in personal computer sales Dell made a new long-term strategy in which it would focus more on enterprise solutions and services rather than end-user computing -- justification: enterprise solutions have higher margins than end-user computing went from a public corporation to a private enterprise -- justification: Michael didn't want to be subject to the scrutiny of investors who demand consistent returns and profitability problem: the idea of transitioning to the software industry was not a new idea and other companies had already done it

corporate strategy

explains how the organization will accomplish its mission 3 methods: grand strategies, the BCG matrix, and diversification

grand strategy

explains how the organization will accomplish its mission (and vision) 3 common grand strategies: (1) growth strategy (2) stability strategy (3) defensive strategy can use 1, 2, or 3 of these grand strategies

adhocracy culture

external focus and values flexibility values adaptivity, creativity, flexibility, and agility in the face of environmental change start-ups and innovative companies, which are concerned with creating, designing, and developing new things, commonly have this ex: Google because the company values innovation, employee freedom, and adapting to new opportunities -- aims to create an environment that inspires and facilities ingenuity

learning and development (L&D) programs

facilitate employee involvement by bridging the gap between what employees already know and what they need to know to perform their jobs well common in areas such as safety, leadership, computer skills, customer service, communications, human relations, quality initiatives, sexual harassment, ethics, and diversity teach workers skills: use interactive methods like role-playing, case analysis, and simulations teach workers facts: use lectures, videotapes, and workbooks

innovation

finding ways to deliver new or better goods and services without this, organizations will eventually die

impacts of organizational culture

firms choice of organizational culture has an impact on its economic performance and on workers' perceptions of their job cultures associated with stability and control (market and hierarchy) tend to be more effective in terms of monetary success cultures associated with flexibility and discretion (clan and adhocracy) have no significant relationship to financial performance operational efficiency has a moderate association to clan, adhocracy, and market cultures, but it has a weak association to hierarchy cultures customer satisfaction has a moderate relationship to clan and market and a weak relationship to adhocracy and hierarchy all types are moderately associated with market share, other than adhocracy, which is weakly associated quality is not affected by organizational culture financial performance is not strongly correlated to organizational culture

targeted products with shorter time-to-market

firms must develop new products and services, as well as ways to market them and bring them to market, faster than ever

operational planning

first-line managers planning what workers need to accomplish day-to-day for periods of 1 to 52 weeks first-line managers (team leaders, unit managers, first-line supervisors, etc.) must direct the tasks of nonmanagerial employees and ensure that operational plans are properly implemented decisions at this level are routine and follow the well-designed set of procedures developed by middle managers

affirmative action

focuses on achieving equality of opportunity within an organization focuses on implementing policies that guarantee equal opportunity for protected groups, such as minority hiring goals public support for affirmative action is intermittent, as some consider it a form of discrimination least effective when prejudice remains in the workplace

differentiation vs integration

forces that depend on the stability of the environment and either pull the parts of an organization apart or push them together successful organizations balance differentiation and integration for different subunits based on the part of the environment that affects them most

labor unions

formed to advance and protect their members' interests through bargaining and negotiation with management

for-profit organizations

formed to make money, or profits, by offering products or services

nonprofit organizations

formed to offer services to certain clients, not to make a profit

realistic job preview

gives a candidate a picture of both the positive and negative features of the job and the organization before he or she is hired

example of SMART goal for Honda

goal: Honda would be the fuel-efficiency world leader in every vehicle class SPECIFIC: clearly specific an objective (manufacturing vehicles that are fuel-efficiency leaders) MEASURABLE: there are organizations that rank vehicles based on fuel efficiency, and fuel efficiency is a quantifiable variable ATTAINABLE: depends on the resources it would take for Honda to develop innovative engines that are more efficient than its competitors' engines, compared with the value to Honda of being the leader in every vehicle class RESULTS-ORIENTED: it will be clear at the end of 3 years if Honda has been successful or not TARGET DATES: it specifies that the goal must be achieved within 3 years

Specific

goals should clearly address only one issue or metric, and both the manager and his or her subordinates should know exactly what the goal is ex: "95% of planes should arrive within 10 minutes of the scheduled time"

Target dates

goals should specify deadlines for achievement that are realistic yet challenging target dates give workers a clear time frame for doing what is expected

sources of competitive intelligence that are rarely used

government records, clipping services, security analysis, direct contact with competitors, personal interviews, and contact with suppliers

customer divisions

group activities around common customers or clients ex: Ford Motor Co. has different divisions for customers that want large trucks, dealers that sell passenger cars, etc.

geographic divisions

group activities around defined regional locations ex: US Federal Reserve Bank is separated into 12 geographic divisions

product divisions

group activities around similar products or services ex: Time Warner has different divisions for movies, cable television, and magazines

weaknesses of Dell

has lower profit margins; most incomes comes from its PC business has weak differentiation compared to what it was before etc.

staff personnel (aka support personnel)

have authority functions; they provide advice, recommendations, and research to line managers indicated by dotted horizontal lines in organizational charts ex: legal counsel, human resources departments, and special advisors -- the HR department doesn't have the final decision about new hires, but the staff personnel in HR provide information and support necessary for line managers to do so

line managers

have the authority to make decisions, have profit-and-loss responsibility, and usually have people reporting to them indicated by a solid vertical line in an organizational chart ex: presidents, CEOs, and executive administrative directors

Jack Welch on the importance of human resources

he is the former CEO of General Electric more important than finances to achieving business success HR should be involved in every aspect of business meetings and development because the success of the company is ultimately in their hands, as they are cultivating tomorrow's leaders it is wrong to diminish the duties of HR to forms and morale-boosting events

layoffs

he or she is dismissed but may be recalled later if the organization is financially able to bring him or her back

fired

he or she is permanently dismissed because of his or her performance

downsized

he or she is permanently dismissed because of reasons separate from his or her performance

advantages of SWOT analysis

helps managers set realistic goals, improve their capabilities in problem areas, establish plans to overcome weaknesses, exploit strengths, and turn threats into opportunities

how culture is learned and strengthened

heroes, stories, rituals, material symbols

stars

high growth industry and high market share gives stars high, stable, growing earnings and a neutral cash flow managers should invest in stars to achieve more growth when market growth slows down, a company's stars become cash cows ex: Apple Watch

step 4: appraise performance and give rewards

high performance should be rewarded with money, praise, promotion, or some combination of these, and corrective action should be used for non-attainment of objectives 6 months to a year

centralized authority

higher-level managers make decisions prevents duplication of efforts because a central group of specialists performs most tasks these procedures are easier to control under centralized authority

corporate-level strategy

highest level of strategic management C-suite executives create corporate-level strategy, focusing on the organization as a whole they consider questions such as, "what industry should we be in?" ex: acquisitions, joint ventures, and large investments in plant and equipment

importance of the "A" in SMART goals

how attainable or appropriate a goal is (i.e., the goal difficulty) has an impact on individuals' productivity goal too easy --> subordinates lose focus as goal difficulty increases, performance also increases for committed individuals with adequate ability committed employee with reach maximum performance when working for goals in the moderate-to-challenging range as goal difficulty increases further, from challenging to impossible, performance decreases because individuals will lack commitment to excessively high goals

ex. of operational planning with Dell

how the company decided to achieve the goals of becoming more efficient in the personal computing market, and transitioning to a solutions management company Dell began as a company that offered customization but transitioned to less customization and moved from a configure-to-order (CTO) system to a build-to-order (BTO) system that prebuilds the most popular configurations Dell's recent operational plan for driving revenue has been to take advantage of the PC growth in emerging markets, including those in lower-tier cities in China, India, Indonesia, and Brazil Dell hired more salespeople to grow its salesforce

value proposition

how the organization will exploit its core competencies, deliver value to customers, and build synergy in its operations

strategy involves competitive trade-offs

if a company tries to do everything, rather than focus on one particular position, it will lose its competitive identity

operational efficiency

important, but not sufficient to be the sole driver of a company's decision making

culture change

in the process of culture change, a company should also change its formal statements, slogans, sayings, stories, etc. also should consider its physical design, structure, systems, and procedures, and it should make sure that management models the changes, reinforcing the new culture with training and coaching managers should reward and promote the right people by using goals and performance criteria that have been adapted for the new culture

incentives

include bonuses, profit-sharing plans, stock options, and commissions

strategic-management process

includes 5 steps for formulating and implementing strategies and strategic goals involves managers from all parts of the organization steps: (1) determine the mission, vision, and values statements (2) examine the current reality (3) devise (corporate, business, and functional) strategies (4) execute the strategy (5) monitor the process to maintain strategic control

off-the-job learning and development

includes classroom programs, workbooks, videos, and simulations or games

on-the-job learning and development

includes coaching, training positions, job rotation, and planned work activities

artifacts

includes the physical manifestations of cultures, such as how employees dress, how managers (visibly) act, and how the office is decorated, that are visible but often indecipherable ex: employees at IBM traditionally wore navy blue office attire

functional (task-based) knowledge

increased when you take a proactive learning orientation because proactive learners consider a wide range of information

organizational structure and practices

influenced by the culture, organizational structure and practices consist of the organizational design and the reward systems in place

innovation vs invention

innovation must be useful

clan culture

internal focus and values flexibility rather than stability and control values cohesion, job satisfaction, collaboration, employee development, and commitment may exist in a family-run business, such as Duck Dynasty, where there is significant concern about the well-being of employees ex: The Container Store associated with positive work attitudes less associated with positive employee behavior because they don't emphasize focusing on tasks

hierarchy culture

internal focus and values stability and control over flexibility these companies have a number of control mechanisms in place to ensure promptness, efficiency, and effectiveness successful in a stable market environment common in companies that are bureaucracies many gov. agencies, such as the DMV, has this ex: McDonalds because it focuses on logistics, standardization, and the control end of the process weak relationship to positive employee behavior, but it is because high levels of control over employees can be demotivating and lead to boredom less effective

behavioral-description interview

involve an exploration into what applicants have actually done in the past ex: the US Army asks applicants to its officer training program for the best idea they have ever sold to another individual; their answer allows the Army to assess the applicant's ability to influence others

traditional designs

involve vertical management hierarchies and clear reporting relationships include simple structure, functional structure, divisional structure, and matrix structure

they key questions to implementation

involve whether your products are positioned properly in the market, how you intend to achieve certain results, if you have the right people to do what you have planned, and if you have specific plans to reach a desired outcome

forced ranking performance review system

involves a ranking of all employees in a business unit against one another and the distribution of scores along some sort of bell curve bottom of curve: told to improve or they will be fired top of the curve: rewarded with promotions and bonuses criticism: it pits employees against one another, which can reduce collaboration among employees least effective in a firm that wants to promote collaboration

performance appraisal

involves assessing an employee's performance and providing the employee with feedback requires the manager to judge how the employee is doing in relation to organizational standards, and they also require the manager to counsel the employee in how to improve performance when necessary can be effective because they are based on a schedule rather than need

invention

involves creating something new

internal staffing sources

involves filling positions with current employees a well-organized company will have a human resource inventory

external staffing sources

involves filling positions with individuals who are not current employees can use the US Census Bureau data to determine the characteristics of the labor pool in the organization's geographic area Bureau of Labor Statistics: provides data regarding the projected growth of occupations in a given industry, and the projected graduation rate of qualified individuals the firm should consider any technological advances that might affect human resource needs (e.g., automating jobs)

competitive intelligence

involves gathering information about competitors' activities, so that a firm can anticipate changes in the market and act appropriately a systematic process in which firms collect, analyze, and manage external information that can have an effect on the firm's plans, decisions, and operations it is not organizational espionage, and it is legal can come from public content, advertising, investor information, informal sources, etc. firms can be proactive rather than reactive, and they can prepare for environmental changes and changes in the marketplace

contingency planning

involves having a preset plan of action for responding to various occurrences, such as procedures for dealing with possible emergencies, setbacks, or other inadvertent conditions in the environment ex: UF administrators have contingency plans for holding classes in the event of hurricane damage on campus

understanding the business

involves learning about the business a company is in and how opportunities and threats in the industry affect the company's strategies

proactive learning orientation

involves making choices to be intentionally proactive requires being open-minded and nonjudgemental 4 recommendations: (1) focus on the solutions - not on the problems (2) take initiative (3) set realistic goals (4) be involved in personal and professional conversations

critical thinking and problem solving

involves making connections between concepts, ideas, people, and events, which requires setting aside time to think and reflect managers can encourage lateral thinking with the Six Thinking Hats -- basic idea is that individuals mentally wear (and switch) these hats during meetings to promote creativity and insight (1) white hat: gathers relevant facts (2) yellow hat: focuses on positivity and finding value (3) black hat: searches for difficulties and provides counterarguments (devil's advocate) (4) red hat: focuses on feelings and intuition (5) green hat: focuses on creativity and exploring new ideas (6) blue hat: the control that ensures all hats are being used

organizational design

involves the establishment of optimal organizational structures that will establish accountability and responsibility and ultimately help the firm achieve its strategy 3 types: (1) traditional designs (2) horizontal designs (3) designs that open organizational boundaries

Results-oriented

the best goals are ambitious but achievable, given the resources available to the organization based on experience and data, managers should ensure that output goals for subordinates can be completed with subordinates' given resources, and that goals are aligned with the results managers are looking for the goals the organization chooses to set should support the organizational vision goals should start with the word "to," followed by an action-oriented verb that does not imply an activity -- ex: "to decrease the amount of time it takes to board an airplane by 10%"

the vertical hierarchy of authority

the chain of command and the official communication network can be identified by looking up and down the chart

refreezing

the changed attitudes and behavior are integrated into employees' normal ways of doing things accomplished by integrating the change into the organization's standing plans and by properly rewarding desired behaviors

performance management

the continuous cycle of improving job performance through goal setting, feedback and coaching, and rewards and positive enforcement can improve employee productivity and engagement, increase profitability, raise engagement, and reduce turnover

coordinated effort

the coordination of individual efforts into a group-wide effort

new-direction innovation (aka transformational or radical innovation)

the creation of a product, service, or process that intends to create new markets of customers sometimes disruptive because they can restructure or revolutionize an industry ex: the emergence of autonomous vehicles will likely change the nature of the taxi industry and other related industries

improvement innovation (aka incremental or core innovation)

the creation of a product, service, or process that modified or enhances an existing one ex: upgrading an existing razor product by including an additional blade for precision

contingency planning (aka scenario planning or scenario analysis)

the creation of alternative hypothetical, but equally likely, future conditions future conditions can include economic conditions, competitors' strategies, or budget levels helps firms react quickly and decisively when things do not go as planned ex: insurance companies have had to modify rates in order to account for potential damage due to climate change

reliability

the degree to which a test measures the target variable consistently if an individual's characteristics remain the same over time, that individual's score on the test should remain the same over time

validity

the degree to which the test measures what it purports to measure and is free of bias ex: a person who scores high on a test designed to measure performance should be able to perform well at the given job

product change

the development of new products

process change

the development of new ways of doing business or creating products

the horizontal specialization

the different jobs or work specializations at each level can be identified by looking left and right on the chart ex: each functional area of the firm may have multiple vice presidents

human capital

the economic or productive potential of employee knowledge, experience, and actions provides the organization with a competitive advantage and an important intangible asset highly educated, knowledgeable, experienced, and skilled workers (i.e. workers with more human capital) are more productive and make better decisions, so they have more economic value than workers with less human capital employees with the right human capital provide the organization with a competitive advantage

social capital

the economic or productive potential of strong, trusting, and cooperative relationships important when organizational success depends on the coordination of employees and activities a good HR department will find ways for employees to build social relationships with each other, such as by considering where break rooms and restrooms are or by organizing social events that force employees to interact

expoused values

the explicitly stated values and norms preferred by an organization "talking the talk" ex: Walmart publicly claims to put the customer first

virtual structure

the firm creates a "company outside a company" specifically to respond to an attractive (and often temporary) market opportunity involves the creation of a virtual organization often make use of independent contractors to meet short-term organizational needs the internet facilitates communication and enables organizations to become virtual without customers or suppliers realizing it

strategic management

the formulation and implementation of strategies and strategic goals involves managers from all parts of the organization

antecedents

the founder's values, the industry and business environment, the national culture, and the senior management's vision and behavior

opportunities of Dell

the global IT service industry, cloud computing services, and tablet markets are all growing emerging economies are new, high-growth markets

step 2: examine the current reality

the organization should internally and externally examine where it stands with its stakeholders, what is working well in achieving its vision, and what can be changed to increase efficiency and effectiveness tools to assess the current reality: competitive intelligence, SWOT analysis, VRIO analysis, forecasting, benchmarking, and Porter's model for industry analysis -- use these to convert the vision into a strategy

mission statement

the organization's reason for operating (being) top management and the board of directors determine the purpose of the organization, including the needs it exists to address outlines the goods and services the organization will provide and its reasons for providing them

demotion

the permanent removal of responsibilities and pay as the employee is sent to a lower level of the organizational hierarchy

disadvantages of a hollow structure

the possibility that the independent firms a company outsources to might later become its competitors

strategic human resource management (SHRM)

the process by which managers design the components of a human resource management system to be consistent with each other, with other elements of organizational architecture, and with the organization's strategy and goals

organizational socialization

the process by which organizational members learn the values, norms, and behaviors that allow them to participate as members of the organization 3 phase process: (1) anticipatory socialization phase (2) encounter phase (3) change and acquisition phase

benchmarking

the process of a company evaluating its own performance based on how it compares with the performance of high-performing organizations companies use this to assess the internal aspects for SWOT analysis allows a company to incorporate the best practices in the industry into its own operations ex: airlines use this to compare the number of on-time arrivals, fuel cost, number of lost bags, etc. to high-performing competitors nonprofit organizations like cities benchmark measures such as quality of life

delegation

the process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy it is an important, but often neglected, part of a manager's job

strategy formulation

the process of choosing the best strategies, perhaps even altering several strategies to fit the organization's needs very time-consuming because strategy must be translated into strategic plans that define the organization's goals over a period of one to five years

innovation

the process of coming up with the new ideas and converting them into useful applications (usually goods and services)

contingency design

the process of fitting the organization to its environment

orientation

the process of helping a newcomer fit smoothly into the job and the organization this is the stage at which the newly hired employee "learns the ropes" and gets all the information he or she needs to achieve success psychological patterns are formed during a new employee's first 6 months on the job large organizations have formal and structured orientations, while small organizations are usually informal and unstructured

recruiting

the process of locating and attracting qualified applicants for positions in the organization do this in 2 ways: (1) internal recruiting (2) external recruiting

adaptive change

the reintroduction of a familiar practice (one the organization has previously employed) least costly, complex, and uncertain results in the least employee resistance ex: once a year, a department store might ask employees to work 12 hours a day instead of 8

authority

the rights inherent in a managerial position to make decisions, give orders, and utilize resources subordinates are expected to recognize a manager's authority to assign responsibility, the obligation to perform assigned tasks similar concepts: accountability, delegation, and responsibility 2 kinds of authority positions: line managers and staff positions

selection process

the screening of job applicants to hire the best candidate requires the organization to predict each candidate's likelihood of success and satisfaction with the job 3 selection tools: (1) background information (2) interviewing (3) employment tests

strategy

the second core process of execution, strategy, must explain how success will be accomplished in the future a good strategic plan gives an assessment of the external environment, the degree to which managers understand existing markets, and how to cultivate the business it identifies competition and makes assurances that the strategy can be executed and that the short term and long term are balanced it establishes milestones for execution and identifies critical issues facing the business indicates how the business can make money sustainably

implementation process

the second stage and can be broken down into 3 steps: (1) implement strategy through a structure, system, and operational processes that work together (2) set up control and evaluation systems to ensure success (3) feedback to planning

differentiation

the tendency of the parts of an organization to disperse and fragment division of labor and technical specialization cause employees to isolate their activities from those of the rest of the organization the more organizational subunits there are, the more differentiated the organization is

integration

the tendency of the parts of an organization to draw together to achieve a common purpose this is achieved through the formal chain of command, the use of cross-functional teams, the standardization of rules and procedures, and the use of computer networks

operations

the third core process of execution, operations, provides people with a path to follow the operating plan should describe the company's activities and the short-term objectives of each activity

group and social processes

the type of organization structure affects the group and social processes of the firm, such as socialization, mentoring, decision making, group dynamics, communication, empowerment, and leadership

givebacks

the union gives up costly wage or benefit gains in exchange for something else (such as better job security)

change

the way in which an individual or organization moves from an unsatisfactory current state to a satisfactory desired state basic motivation for change is to improve upon an existing state

Michael Porter

the world's leading expert on competitive strategy he stated that the best way of thinking about competition is by focusing strategy on creating a unique organization, which offers something different and something in which it has an advantage over competitors term-102 3 underlying principles of strategic planning: (1) strategy involves creating a unique and valuable position (2) strategy involves competitive trade-offs (3) strategy requires the creation of a "fit" among activities

threats of Dell

there is a decline in Dell's profit margin for its hardware products there is a lot of competition in the PC and service markets etc.

Measurable

there should be a way to measure whether the goal has been achieved goals relating to quality are difficult to quantify; however, managers must attempt to find ways to do so (e.g., through customer surveys)

basic assumptions

these are invisible or preconscious core values that are meant to guide employee perception and behavior tend to be taken for granted and thus are hard to change ex: one assumption of a culture might be equality - that everyone will be treated fairly

how organizational cultures form

they begin with the philosophy of the organization's founders ex of people who influenced their organization's culture: Ben Cohen and Jerry Greenfield (Ben & Jerry), Herb Kelleher (SW Airlines), and Bill Gates culture continues to develop through selection (i.e., the hiring process) and socialization among employees; top management selects employees who they believe will fit in with the desired organizational culture for available positions, and these employees influence how the culture progresses

they establish formal reporting relationships

they determine how workers will use resources, who reports to whom, and who is accountable for what

they establish relationships among employees

they determine who will do what in the organization and influence which employees will interact and collaborate

functional-level strategy

third/lowest level of strategic management functional managers use this to direct how their department will support the business-level strategies planning discussions focused on tactical issues that support the company's business-level strategies ex: marketing plans and production plans for particular products

constraints of the HRM environment

those imposed by (1) legislation, (2) societal trends, and (3) changing technology

mechanistic organization

those in which authority is centralized, tasks and rules are clearly specified, and employees are closely supervised characterized by top-down communication and rigid rules most suitable for a stable environment few teams or task forces narrow span of control tall organizational structure ex: hotels

organic organizations

those in which authority it decentralized, rules and procedures are fewer, and networks of employees are encouraged to cooperate and respond quickly to unexpected tasks implement improvements as they go along, depending on the pressures of the environment sometimes called "adhocracies" best when the environment is unstable because the focus is on creativity rather than efficiency many teams or task forces wide span of control flat organizational structure

enacted values

those values and norms actually exhibited by the organization "walking the talk"

3 ways organizations can encourage innovation

through culture, resources, and rewards (1) create a culture that celebrates failure (2) devote the right amount of money, time, energy, and focus to innovation (3) reward top-performing innovators not implementing these ideas can impede innovation by resulting in factors that reduce an organization's ability to learn from failure

ways that a corporate-level strategy of diversification can be implemented

through mergers, acquisitions, strategic alliances, joint ventures, or internal development

time frames for planning

time frames for strategic, tactical, and operational planning overlap to identify which type of planning os occurring, focus on WHO is planning and the INTENT rather than on the time frame

what is the purpose of strategy?

to determine where to invest time and effort in order to effectively utilize resources

they establish a standing plan

together, these elements establish a standing plan for employees to turn to as they do the organization's work a standing plan is a long-term plan that is not expected to change

strategic planning

top managers planning the overarching vision for the firm for periods of one to five years top managers (CEOs, presidents, VPs, general managers, division heads, etc.) formulate long-term plans with knowledge of the ever-changing and increasingly competitive environment managers at this level must be future-oriented, understand the market environment, and be comfortable with both uncertainty and competition recently this has to be done more often like 1-2 years instead of every 5 -- due to technological advances and increasing world competition

sources of competitive intelligence that are heavily used

trade journals, external online databases, external hard-copy documents, employees, industry experts, and trade organizations

organizational arrangements

turbulence in the market may prompt reorganization of the firm's structure, policies, procedures, rewards, roles, etc.

common purpose

unifies employees and gives everyone an understanding of the organization's mission

sexual harassment

unwanted sexual attention that creates an adverse work environment 2 types: (1) quid pro quo (2) hostile environment

Porter's model for industry analysis

used to assess the competitiveness in a particular industry suggests that average industry profits vary as a result of pressure from 5 primary competitive forces that each influence productivity managers should evaluate the level of the 5 forces and consider the factors that are causing each to get stronger or weaker 5 forces: (1) threat of new entry (2) suppliers' bargaining power (3) buyers' bargaining power (4) threats of substitute products (5) competitive rivalry industries with less competition have higher average profits level of competition: weak, moderate/normal, strong, fierce, or brutal

job analysis

used to determine, by observation and analysis, the basic elements of a job interviews and personal observation can be used ex: specialists might ride along with UPS drivers in rural areas and big cities to see how their jobs differ

current reality assessment (aka organizational assessment)

used to evaluate the firm as in its present state, and identify how it could be improved in order to achieve the organization's mission

cost-focus strategy

used to keep the costs, and hence prices, of a product or service below those of competitors and to target a NARROW market organizations using this generally produce and sell low-end products, as managers are pressured to keep costs low

cost-leadership strategy

used to keep the costs, and hence the prices, of a product or service below those of competitors and to target a WIDE market focus on the efficiency of their processes in order to achieve this strategy requires a business to have access to capital, process engineering skills, tight cost controls, job specialization, frequent reports, and incentives for reaching quantitative goals firms focus on R&D and on cost-efficient marketing

focused-differentiation strategy

used to offer products or services that are of unique and superior value compared to those of competitors and to target a NARROW market companies that sell luxury goods use this, but this can also be used for less-expensive goods such as niche books

differentiation strategy

used to offer products or services that are of unique and superior value compared to those of competitors and to target a WIDE market required marketing to emphasize branding, product engineering, product R&D, strong coordination, and incentives for reaching qualitative goals lead to a high price point than competitors, but customers are willing to pay more for more perceived value firms focus on R&D, customer service, and marketing may create brands to help differentiate their products

values statement (aka core values statement)

values the organization wants to emphasize what core priorities it stands for, its culture, what beliefs it wants to emphasize, what standards are embodied by its employees, and what contributions it offers the world

mutual-benefit organizations

voluntary collectives whose purpose is to advance members' interests ex: unions and trade associations

vision statement

what the organization envisions itself becoming where it wants to go, what actions it needs to get there, what it wants to become, and a clear sense of the future it wants to accomplish

when is diversification beneficial?

when 2 companies can achieve synergy, which if when the total value they achieve combined is more than the total value they could achieve if each were on its own ex: a number of Disney's entertainment businesses use a common set of characteristics, so success with one business venture benefits the other Disney businesses

example of single-use plans

when Domino's changed its official name (from Domino's Pizza Inc. to Domino's Inc.), it used a single-use plan; a name change had not happened before, and it is unlikely to happen again in the near future project: plans for redesigning its logo

needs-based positioning

when a firm attempts to serve the various needs of a particular customer segment works well when there are groups of customers with differing needs can involve serving a broad range of needs for a few customers, or serving multiple different needs of a particular customer segment ex: Bessemer, a financial counseling service, caters to only a handful of wealthy customers ex: IKEA offers DIY solutions for people who need to furnish or decorate their homes or offices broad needs, few customers

variety-based positioning

when a firm produces a subset of an industry's products or services gets its name from the fact that the firm has chosen a product or service variety rather than customer segments ex: Jiffy Lube focuses almost only on oil changes -- achieves economies of scale by having facilities and equipment all based on one function few needs, many customers

access-based positioning

when a firm segments customers who are accessible in different ways, rather than on actual differences between them differences in accessibility may be due to geography, age, customer scale, or anything requiring a different set of activities to reach customers use this to serve the broad needs of many customers ex: Carmike Cinema serves customers in small markets in towns of fewer than 200,000 people -- bc there are often not many entertainment options in cities with a small population, Carmike's movie theaters compete well ex: Walmart offers a variety of goods to a large market broad needs, many customers

disruptive innovation

when a product or service begins at the bottom of the market, in only simple applications, but then rapidly escalates up the market and replaces established competitors

hostile environment

when an intimidating or offensive work environment is created need not have to involve a tangible economic injury, as in quid pro quo sexual harassment

people

when an organization wants to implement a change, it has 2 choices: to restrain existing employees (changing perceptions, attitudes, performance, skills, etc.) or fire them and hire new ones

disparate treatment

when organizations intentionally treat individuals from protected groups differently ex: intentionally passing up people with disabilities for assignments involving travel

workplace discrimination

when people are hired or promoted - or denied hiring or promotion - for reasons not relevant to the job 2 types: (1) adverse impact (2) disparate treatment

when do firms diversify?

when the firm has been successful and therefore has enough capital to invest into growing itself some firms diversify or vertically integrate because their current market is in decline or they are not as competitive in it, so they are forced to move to new areas that offer more potential for outperforming others

inputs

where change impacts the planning process, including the organization's mission statement, vision statement, strategic plan, and its readiness for change managers ask "why should we change, and how willing and able are we to change?"

important tip about recognizing which strategy is being used

whether a firm's strategy emphasizes low costs or concentrated on its differentiation is a more important distinction than how wide or narrow its target market is

agency shop

workers are not required to join a union at all, but they do have to pay the equivalent of union dues

open shop

workers can elect to join the union and pay dues or not join the union and not pay dues only type of workplace labor agreement available in 28 US states with right-to-work laws, which prohibit firms from requiring union membership as a condition of employment

Porter's 5 Forces of Competition example with the PC market

(1) threat of new entry: relatively low because there are high barriers to entry (high capital investment) (2) buyers' bargaining power: medium threat because buyers have many alternatives to a PC, such as tablets or mobile phones, and computers are considered a commodity item (3) suppliers' bargaining power: ranges from low to medium depending on the component being supplied (hardware/ service suppliers have low bargaining power, but software suppliers have medium bargaining power) (4) threats of substitute products: high and growing hight because other products (smartphones, etc.) offer the same benefits as PCs (5) competitive rivalry: considered to have "fierce" rivalry, which is high threat because the industry is mature and declining in the developed world, and is a price-sensitive, commodity product

disadvantages of MBO

(1) time-consuming for both employees and managers (2) even though employees and managers are supposed to collaborate in goal setting, the reality is that managers have a stronger negotiating position because of their inherent authority

Kurt Lewin's three stages of change

(1) unfreezing (2) changing (3) refreezing

tools that managers can use to improve strategic execution

(1) visible leadership (2) clear roles and accountability (3) candid communication (4) appropriate human resource practices

4 most commonly asked interview questions

(1) whats your favorite movie? (2) whats your favorite website? (3) what makes you uncomfortable? (4) whats the last book you read for fun? these questions are trying to assess an applicant's person-organization fit

to adapt quickly to a corporate culture and stand out at a new job, do the following in the first 60 days

(1) you only get one chance to make a first impression (2) come in early and stay late (3) get to know your coworkers (4) be open to feedback (5) over-deliver

business-level strategies for firms in the personal computer industry

Acer uses the cost-leadership strategy HP is trying to compete on cost and by attempting to show what makes the company different Sony is struggling because several of its businesses are being crushed by consumer electronics -- they are retrenching its entire line of PCs, and going from a cost-leadership strategy to a cost-focus strategy

Dell's strategies

Dell has used a mixture of cost-leadership and differentiation strategies Originally, Dell offered the latest, high-performing technology at the best price, while still offering customization and surpassing customer service expectations increased competition led to Dell being beaten in both the cost and differentiation categories Now, Dell is focusing on cost-leadership strategy

organization

Is the firm organized to capitalize on the resource or capability? if it has all necessary things (structure, culture, capital, etc.) to harness the value, rarity, and imitability of the business idea, then the firm is organized to exploit it yes to all 4 --> gives the business idea sustained competitive advantage not organized --> the idea has temporary competitive advantage

rarity

Is the resource or capability controlled by few or no other firms? if several competing firms that are duplicating the business idea currently exist, then it is not rare and has only equal competitive potential rare --> costly to imitate? not rare --> the idea is about equal competitively

imitability

Is the resource or capability costly to imitate? if other firms can get into the market without having to confront substantial barriers to entry (e.g., substantial expenses), then the firm may have a competitive advantage in pursuing its business idea, but this competitive advantage will likely only be temporary costly to imitate --> organized to exploit value, rarity, and imitability? not costly to imitate --> the idea has temporary competitive advantage

value

Is the resource or capability valuable? valuable = when a resource or business idea enables the firm to exploit an opportunity or neutralize a threat unique value might come from its human resources system, brand name, customer service, etc. valuable --> rare? not valuable --> the idea is at a competitive disadvantage

Pepsi example of strategic relatedness

Pepsi, which primarily sells beverages, diversified into the (related) snack business, which uses the same distribution channels Pepsi purchasing Frito-Lay --> Pepsi created synergy because it increased its bargaining power as a supplier; Pepsi has more leverage in negotiating deals with grocery stores because Pepsi accounts for a larger share of the store's products (compared with if it just had its beverage business) Pepsi can achieve economies of scale for things like marketing, because it can buy more ad space from the same places

Porter's key points about creating an effective strategy

Porter thinks companies often fail to recognize the difference between operational efficiency and strategy

Attainable

the goals the organization chooses to set should support the organizational visions and be within the power of the staff members to achieve if employees don't have the time or training necessary to make the accomplishment of a given task possible, they will often lose motivation the best goals are ambitious but achievable, given the resources available to the organization too easy = low performance because people will not exert the level of effort that would bring them to their potential too hard = people might not even try to accomplish them, or they will fail every time, and in extreme cases, employees will cheat

strategic planning process

the initial stage of the strategic formulation process 5 steps: (1) define and clarify a mission and objectives (2) assess environment for threats and opportunities (3) asses internal strengths and weaknesses (4) consider alternative strategies using competitive analysis (5) choose a strategy

organizational Weaknesses

the internal drawbacks that hinder an organization in executing strategies in pursuit of its mission ex: a college's weaknesses may include large class sizes, poor diversity, and lack of technology

organizational Strengths

the internal skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission ex: a college's strengths may include skilled faculty, bright students, and loyal alumni

radically innovative change

the introduction of a practice new to the industry most costly, complex, and uncertain receives the most resistance from employees ex: a department store might start selling some of its goods on the Internet

innovative change

the introduction of a practice that is new to the organization but is employed elsewhere within the industry in between adaptive and radically innovative ex: a department store may ask employees to work flexible schedules so that the store can stay open 24 hours a day

centralization of authority

the level of centralization refers to who makes important organization decisions

exit interview

the manager and the departing employee can discuss his or her reasons for leaving and any problems in the organization

step 3: review performance periodically

the manager and the subordinate should periodically come together to review progress and see how well the objectives are being met managers should give subordinates feedback, and objectives should be revised or updated as necessary employees are more motivated in their work when they are held accountable for their results

functional manager

the manager of a functional department (human resources, marketing, operations, etc.) within a particular business unit

planning

the managerial function that involves setting goals and deciding how to achieve them coping with uncertainty by formulating future courses of action to achieve specified results

organizing

the managerial function that involves the deployment of resources in a way that will achieve strategic goals managers have to make the best use of the organization's assets, including tangible and intangible assets

transfer

the movement of an employee to a job with a similar responsibility within the organization necessary when (1) the employee's skills are needed elsewhere; (2) managers want to broaden the employee's skills; (3) managers want to retain the employee's motivation and interest by presenting him or her with a new challenge; or (4) employee problems need to be resolved

employment at will

the notion that anyone can be dismissed for any reason at any time

span of control

the number of people reporting directly to a single manager narrow span of control: has a smaller number of people reporting to him or her wide span of control: has many people reporting to him or her optimal span of control differs from organization to organization and from job to job ** wide spans of control are easier for standardized tasks, while narrow spans of control are best for complex or specialized tasks ** when an organization has many levels and narrow spans of control, it is described as being tall

accountability

the obligation to report and justify work results to people higher in the organizational hierarchy subordinates are accountable for performing tasks assigned to them

responsibility

the obligation you have to perform the tasks assigned to you managers typically have more responsibility than subordinates too much authority + too little responsibility = abuse of authority too much responsibility + too little authority = find it hard to get their jobs done