management final

Cash Cows (BCG Matrix)

-(lower left quadrant) are in low-growth markets but are high market share products

Defensive Strategies

A company that is struggling may decide to shrink its operations to reduce costs in order to survive, strategy to help the company keep going.

Functional Structures

A functional structure is designed to address these organizational needs

entrepreneur

A person who starts up and takes on the risk of a business

The Entrepreneurial Personality

Ambitious Independent Self-confident Risk-takers Visionary Creative Energetic Passionate Committed

Advantages of Group Decision

An advantage to involving groups in decision-making is that you can incorporate different perspectives and ideas. For this advantage to be realized, however, you need a diverse group. In a diverse group, the different group members will each tend to have different preferences, opinions, biases, and stereotypes. Because a variety of viewpoints must be negotiated and worked through, group decision-making creates additional work for a manager, but (provided the group members reflect different perspectives) it also tends to reduce the effects of bias on the outcome.

Bounded Rationality

Bounded rationality is the idea that for complex issues we cannot be completely rational because we cannot fully grasp all the possible alternatives, nor can we understand all the implications of every possible alternative.

Business Ethics

Business ethicsis applied ethics that focuses on real-world situations

Conclusion

Decision-making is a crucial daily activity for managers. Decisions range from small and simple, with straightforward answers, to big and complex, with little clarity about what the best choice will be. Being an effective manager requires learning how to successfully navigate all kinds of decisions.

Economic Forces

Economically, "The strategic challenge of the next decade is navigating a world that is simultaneously integrating and fragmenting. Stock markets have set new records and economic volatility has fallen to historic lows, while political shocks on a scale unseen for generations have taken place. Seemingly contradictory realities do co-exist."7 Overall, while economic data indicates that globalization has had a positive effect on the world economy, a dark side also shows that two-thirds of all households in 25 advanced-economy countries had incomes stagnate and/or decline between 2005 and 2014. Moreover, the U.K. and U.S. witnessed falling wages. Wealth distribution in these countries continues to decline. Income inequality globally is also rising. Other trends that also affect the global, regional, and local economies are discussed in this chapter as well as below.

How to Form a Quality Group

Effective managers will try to ensure quality group decision-making by forming groups with diverse members so that a variety of perspectives will contribute to the process. They will also encourage everyone to speak up and voice their opinions and thoughts prior to the group reaching a decision.

Conflict

Finally, effective decision-making can be difficult because of conflict. Most individuals dislike conflict and will avoid it when possible. However, the best decision might be one that is going to involve some conflict.

Escalation of Commitment

Given the lack of complete information, managers don't always make the right decision initially, and it may not be clear that a decision was a bad one until after some time has passed.

Disadvantages of Group Decisions

Group decision-making is not without challenges. Some groups get bogged down by conflict, while others go to the opposite extreme and push for agreement at the expense of quality discussions.

Uncertainty

In addition, managers frequently make decisions under conditions of uncertainty—they cannot know the outcome of each alternative until they've actually chosen that alternative

Informational roles

Managers are required to gather, collate, analyze, store, and disseminate many kinds of information. In doing so, they become information resource centers, often storing huge amounts of information in their own heads, moving quickly from the role of gatherer to the role of disseminator in minutes.

Interpersonal Roles

Managers are required to interact with a substantial number of people in the course of a workweek. They host receptions; take clients and customers to dinner; meet with business prospects and partners; conduct hiring and performance interviews; and form alliances, friendships, and personal relationships with many others.

Time Constraints

Managers often face time constraints that can make effective decision-making a challenge. When there is little time available to collect information and to rationally process it, we are much less likely to make a good nonprogrammed decision. Time pressures can cause us to rely on heuristics rather than engage in deep processing. While heuristics save time, however, they don't necessarily lead to the best possible solution. The best managers are constantly assessing the risks associated with acting too quickly against those associated with not acting quickly enough.

Natural disasters and human-related problems

Natural disaster and human induced environmental problems are events such as high-impact hurricanes, extreme temperatures and the rise in CO2 emissions as well as 'man-made' environmental disasters such as water and food crises; biodiversity loss and ecosystem collapse; large-scale involuntary migration are a force that affects organizations.

Normative Ethics

Normative ethics refers to the field of ethics concerned with our asking how should and ought we live and act

Differentiation

Not all products or services in the marketplace are offered at low prices, of course. A differentiation strategy is exactly the opposite of a cost-leadership strategy. While firms do not look to spend as much as possible to produce their output, firms that differentiate try to add value to their products and services so they can attract customers who are willing to pay a higher price. At each step in the value chain, the differentiator increases the quality, features, and overall attractiveness of its products or services. Research and development efforts focus on innovation, customer service is excellent, and marketing bolsters the value of the firm brand. These efforts guarantee that the successful differentiator can still profit even though its production costs are higher than a cost leader's. Starbucks is a good example of a differentiator: it makes coffee, but its customers are willing to pay premium prices for a cup of Starbucks coffee because they value the restaurant atmosphere, customer service, product quality, and brand.

Personal Biases

Our decision-making is also limited by our own biases. We tend to be more comfortable with ideas, concepts, things, and people that are familiar to us or similar to us. We tend to be less comfortable with that which is unfamiliar, new, and different. One of the most common biases that we have, as humans, is the tendency to like other people who we think are similar to us (because we like ourselves)

Total rewards strategy

Plan or method implemented by an organization that provides monetary, benefits-in-kind, and developmental rewards to employees who achieve specific business goals.

PESTEL

Political Economic Social Technological Environmental Legal

The Decision-Making Process

Recognize that a decision needs to be made. Generate multiple alternatives. Analyze the alternatives. Select an alternative. Implement the selected alternative. Evaluate its effectiveness.

Sociocultural forces

Sociocultural environmental forces include different generations' values, beliefs, attitudes, customs and traditions, habits, and lifestyles. More specifically, other aspects of societal cultures are education, language, religion, law, politics, and social organizations.

What is a SMART goal?

Specific, Measurable, Attainable, Realistic, Timely

Stakeholder Management

Stakeholder theory argues that corporations should treat all their constituencies fairly and that doing so can strengthen companies' reputations, customer relations, and performance in the marketplace.58 "If organizations want to be effective, they will pay attention to all and only those relationships that can affect or be affected by the achievement of the organization's purposes

The Internet

Thanks to the pervasiveness of the Internet today, any company in the world can sell its products to anyone in the world. In fact, the developments in information technology and the reduction in costs of technological equipment mean that any multinational can reach anyone in the world. Social media, such as Twitter and Facebook, also provide a means for multinationals to build relationships with customers worldwide. Data also suggests that even countries that previously had little access to the Internet are now experiencing tremendous growth.

coercive power

The ability of a manager to punish others

The Common Good

The common good is defined as "the sum of those conditions of social life which allow social groups and their individual members relatively thorough and ready access to their own fulfillment." example: what is the real difference between stealing money from the work place vs a pen

Specialization

The degree to which people are organized into subunits according to their expertise is referred to as specialization—for example, human resources, finance, marketing, or manufacturing

Lowering Trade Barriers

The first critical factor is the lowering of trade barriers through trade agreements, government policies through which countries agree to eliminate cross-border barriers to trade and to promote global integration. To understand the importance of trade agreements, it is necessary to note that countries have long used tariffs to protect local industries and companies. Tariffs are taxes that are added to the price of imported international products. Because these tariffs are usually passed along to the consumer in the form of higher prices, imposing tariffs on imported goods gives domestic companies a price advantage and protects them from foreign competition.2 The goal of most trade agreements has been to reduce or eliminate tariffs and other barriers to make cross-border trade easier.

Centralization

The next element to consider is how to manage the flows of resources and information in an organization

Entrepreneur vs small business owner

The two groups share some of the same characteristics, and we'll see that some of the reasons for becoming an entrepreneur or a small-business owner are very similar. But there is a difference between entrepreneurship and small-business management. Entrepreneurship involves taking a risk, either to create a new business or to greatly change the scope and direction of an existing one. Entrepreneurs typically are innovators who start companies to pursue their ideas for a new product or service. They are visionaries who spot trends. Although entrepreneurs may be small-business owners, not all small-business owners are entrepreneurs. Small-business owners are managers or people with technical expertise who started a business or bought an existing business and made a conscious decision to stay small.

Multipreneurs

Then there are multipreneurs, entrepreneurs who start a series of companies. They thrive on the challenge of building a business and watching it grow.

justice

This principle has at least four major components that are based on the tenets that (1) all individuals should be treated equally; (2) justice is served when all persons have equal opportunities and advantages (through their positions and offices) to society's opportunities and burdens; (3) fair decision practices, procedures, and agreements among parties should be practiced; and (4) punishment is served to someone who has inflicted harm on another, and compensation is given to those for a past harm or injustice committed against them.

Rights

This principle is grounded in both legal and moral rights. Legal rights are entitlements that are limited to a particular legal system and jurisdiction. In the United States, the Constitution and Declaration of Independence are the basis for citizens' legal rights, for example, the right to life, liberty, and the pursuit of happiness and the right to freedom of speech. Moral (and human) rights, on the other hand, are universal and based on norms in every society, for example, the right not to be enslaved and the right to work.

Decisional Roles

Ultimately, managers are charged with the responsibility of making decisions on behalf of both the organization and the stakeholders with an interest in it. Such decisions are often made under circumstances of high ambiguity and with inadequate information. Often, the other two managerial roles—interpersonal and informational—will assist a manager in making difficult decisions in which outcomes are not clear and interests are often conflicting.

Universalism

Universalism is a principle that considers the welfare and risks of all parties when considering policy decisions and outcomes. Also needs of individuals involved in a decision are identified as well as the choices they have and the information they need to protect their welfare. This principle involves taking human beings, their needs, and their values seriously. It is not only a method to make a decision

Virtue Ethics: Character-Based Virtues

Virtue ethics is based on character traits such as being truthful, practical wisdom, happiness, flourishing, and well-being. It focuses on the type of person we ought to be, not on specific actions that should be taken. Grounded in good character, motives, and core values, the principle is best exemplified by those whose examples show the virtues to be emulated. Basically, the possessor of good character is moral, acts morally, feels good, is happy, and flourishes.

Cost Leadership

When pursuing a cost-leadership strategy, a firm offers customers its product or service at a lower price than its rivals can. To achieve a competitive advantage over rivals in the industry, the successful cost leader tightly controls costs throughout its value chain activities. Supplier relationships are managed to guarantee the lowest prices for parts, manufacturing is conducted in the least expensive labor markets, and operations may be automated for maximum efficiency. A cost leader must spend as little as possible producing a product or providing a service so that it will still be profitable when selling that product or service at the lowest price. Walmart is the master of cost leadership, offering a wide variety of products at lower prices than competitors because it does not spend money on fancy stores, it extracts low prices from its suppliers, and its pays its employees relatively low wages.

Identifying and Influencing Major Stakeholders

Who are the stakeholders (that is, people who have an interest in supporting or resisting a proposed course of action, resolving an issue, and addressing a change)? What are their stakes in either supporting or resisting the change? What do the supporters stand to gain and lose from the change? What do the resisters stand to gain and lose from the change? What type(s) of power do the supporters have with regard to the change? What type(s) of power do the resisters have with regard to the change? What strategies can we use to keep the support of the supporters? What strategies can we use to neutralize or win over the resisters?

dog

a business unit that has low growth potential and a small market share and should not be continued

star

a business unit that is a fast-growing market leader and is doing fantastic and the CEO should consider investing more.

growth strategy

a strategy that focuses on increasing profits, revenues, market share, or the number of places in which the company does business

stability strategy

a strategy that helps maintain its current income, market share, or geographic reach.

Span of Control

addresses the scope of the work that any one person in the organization will be accountable for

Government and political forces

also affect industries and organizations. Recent events that have jarred the global economy—and are too early to predict the long-term outcomes of—are the United Kingdom's exit from the European Union, President Trump's nationalistic policies echoed by other presidents in Chile and Argentina,8 wars in the Middle East, policies that question and disrupt free trade, health-care reform, and immigration—all of which increase uncertainty for businesses while creating opportunities for some industries and instability in others.

Technological forces

are another ubiquitous environmental influence on organizations. Speed, price, service, and quality of products and services are dimensions of organizations' competitive advantage in this era. Information technologies and social media powered by the Internet and used by sharing-economy companies such as Airbnb and Uber have democratized and increased, if not leveled, competition across several industries, such as taxis, real estate rentals, and hospitality services. Companies across industry sectors cannot survive without using the Internet, social media, and sophisticated software in R&D (research and development), operations, marketing, finance, and sales. To manage and use big data in all these functional areas, organizations rely on technology.

Strategic Groups

clusters of firms that share similar strategies

Intrapreneurs

creative people who work as entrepreneurs within corporations

resource allocator

decide who gets resources; schedule, budget, set priorities

Programmed decisions

decisions that we are pron to, ex: looking both ways when we cross the street

sociocultural forces

demographic trends, lifestyle changes, availability skills, attitude towards work, gender issues, willingness to move and ethics

Bureaucracy

divide the duties of labor, allow people to specialize, and create structure for coordinating their differentiated efforts, usually within a hierarchy of responsibility. He proposed five elements of bureaucracy that serve as a foundation for determining an appropriate structure: specialization, command-and-control, span of control, centralization, and formalization

External Environment elements

economic, technological, socialcultural, goverenment and poltical forces, and natural disasters

there are 4 types of managers

executive management, middle management, first line management, and rank and file employees

Geographic structures

exist where organizations are set up to deliver a range of products within a geographic area or region. Here, the business is set up based on a territory or region. Managers of a particular unit oversee all of the operations of the business for that geographical area.

Product structures

exist where the business organizes its employees according to product lines or lines of business. For example, employees in a car company might be organized according to the model of the vehicle that they help to support or produce. Employees in a consulting firm might be organized around a particular kind of practice that they work in or support. Where a functional structure exists, employees become highly attuned to their own line of business or their own product.

Expert power

expert knowledge

if a companies headquarters follow the organization structure of research and development, production, marketing, accounting and finance it is

functional

Economic Forces

globalization, competitors and supply chain, currency exchange rates, employment and wage rates, lending policies of fincial institutions

The Grand Strategy

grand strategy is based on conditions in the business environment because firms generally want to grow unless something (like a recession) makes that difficult.

referent power

he power a person has because others want to associate with or be accepted by him

Utilitarianism

idea that the goal of society should be to bring about the greatest happiness for the greatest number of people

formal leader

individual who is recognized by those outside the group as the official leader of the group. Often, the formal leader is appointed by the organization to serve in a formal capacity as an agent of the organization

informal leader

individual whom members of the group acknowledge as their leader but is the unofficial one.

Technological Forces

informational technology and the internet, new production forces, and how technology is sold and serviced.

organizational development (OD)

is the label for a field that specializes in change management. OD specialists draw on social science to guide change processes that simultaneously help a business achieve its objectives while generating well-being for employees and sustainable benefits for society. An understanding of OD practices is essential for leaders who want to maximize the potential of their organizations over a long period of time.

Formal subsystem

leadership, strategy, management, goals, marketing, operation, technology, structure.

liaison

maintain and manage information links inside and out of the organization

Informal subsystems

managers, culture, norms, relationships, politics and leadership.

Ethical Relativism

moral standards for judging their actions

leader

motivate, train, counsel, communicate, and direct

throughputs

organizational subsystem and processes transform inputs through education, manufacturing process etc.

a firm consists of

owners, finical communities, activists, customers, customer care group, employees, unions, trade associations, competitors, suppliers, and government.

figurehead

performs formal duties such as greeting, signing contracts and other legal documents

managerial responsibilities

planning, controlling, environmental scanning, supervision, coordinating, customer relations, etc.

Foreign Direct Investment (FDI)

refers to deliberate efforts of a country or company to invest in another country through the form of ownership positions in companies in another country.

organizational change

refers to the constant shifts that occur within an organizational system—for example, as people enter or leave the organization, market conditions shift, supply sources change, or adaptations are introduced in the processes for accomplishing work. Through managed change, leaders in an organization can intentionally shape how these shifts occur over time.

Formalization

refers to the degree of definition in the roles that exist throughout an organization. A highly formalized system (e.g., the military) has a very defined organization, a tightly structured system, in which all of the jobs, responsibilities, and accountability structures are very clearly understood.

Command-and-Control

refers to the way in which people report to one another or connect to coordinate their efforts in accomplishing the work of the organization.

inputs

resources, raw materials, technologies, ideas, people, students etc. taken from the environment

Outputs

results from the throughputs phase produce products, services, trained, certified, degreed professionals etc.

Classic Entrepreneurs

risk-takers who start their own companies based on innovative ideas. Some classic entrepreneurs are micropreneurs who start small and plan to stay small.

monitor

seeks and receives information from a variety of sources

SWOT analysis

strengths, weaknesses, opportunities, threats

Path-Goal Theory

suggests that an effective leader provides organizational members with a path to a valued goal.

disturbance handler

taking corrective action during crises or other conflicts

question mark

the business is not doing well and the CEO will need to make a decision to continue or scrap the business idea

disseminator role

the informational role managers play when they share information with others in their departments or companies

spokesperson role

the informational role managers play when they share information with people outside their departments or companies

legitimate power

the power a person has because others believe that he possesses the "right" to influence them and that they ought to obey.

Reward power

the power a person has because people believe that he can bestow rewards or outcomes, such as money or recognition that others desire

Ethics

the principles of right and wrong that guide an individual in making decisions

Human Resource Management

the process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals

organizational design

the process of setting up organizational structures to address the needs of an organization and account for the complexity involved in accomplishing business objectives.

Nonprogrammed Decision

unstructured decisions based on impulse

natural disasters and human induced problems

weather, extreme storms, pollution, health, food, stress