MGMT Quiz 2

Strategic Planning Process (pg.151)

*May need to return to prior steps and make changes 1.) Developing the Mission: Must reflect the culture and purpose of the business/strategy (can be reflected on and changed based on environment). Creates a vision and the expectations of a company. 2.) Analyze the Environment: Keep up with changes that require shifts in strategies (aka situation analysis) Situation Analysis=Analysis of features in a company's environment that most directly affect its options and opportunities (Has 3 parts: Industry and Competitive analysis, Company Situation analysis, and Identification of a Competitive Advantage) -Use five force and SWOT analysis *Companies with multiple lines of business must conduct environmental analysis for each line* 3.) Setting Objectives (pg. 156): Objective=Statements of what is to be accomplished that are expressed in singular, specific, and measurable terms with a target date. -Write Effective Objectives: Objectives are the end result and don't state how they will be accomplished. Distinguish difference between goal and objective. Write them down and review to accomplish them -Criteria for Objectives: Difficult but Achievable/Realistic, Participatively Set (groups set their own objectives rather than assigning them), Acceptance and Commitment (get acceptance from important stakeholder) -Management by Objectives (MBO): Managers and employees jointly set objectives for employees and periodically evaluate performance with rewards according to results. 1.) Set individual objectives/plans with each employee meeting "must" & "want" criteria 2.) Give feedback and evaluate performance (good communication and frequent meetings) 3.) Reward according to good performance 4.) Develop Strategies: Corporate, business, and functional levels 5.) Implementing and Controlling Strategies: Where strategies often fail since managers often make decisions but do not implement them. Implementation requires resources that top managers don't provide. Lower-level management implement operational strategies for day-to-day tasks -As strategies are implemented, they must also be controlled (monitoring progress and taking corrective action to ensure objectives are achieved). People need to resist change and stay within budget

Taking Risk (p.189)

-90% of all brands fail -Must take risks to get greater profits (big bets) -Failing to take risks leads to a decline is business (Blockbuster was too slow to offer mail DVD's like Netflix causing them to go out of business)

Innovation and Change (p. 189)

-External Opportunities and Threats require change -Innovation is the implementation of a new idea (makes or breaks companies). Entrepreneurs are more innovative than managers -Need innovation to keep company in business Product Innovation=New goods/services Process Innovation=New way of doing things Organizational Change: Alterations of existing work routines and strategies that affect the whole company

A Model for Identifying and Overcoming Resistance to Change (pg. 201-202)

-Intensity: Managers must anticipate if resistance will be strong, weak, or normal. Intensity is lower if you use the seven methods for overcoming resistance -Sources: 3 majors ones... ->Facts (provable statements that can help overcome fear of the unknown ->Beliefs (subjective opinions that can be shaped by others and make us think change is correct/incorrect based on perception) ->Values (what people believe are worth pursuing and influences our behavior. Pertain to right and wrong and establish priorities) -Focus: 3 major ones... ->Self (want to know how it benefits/effects them) ->Others (how will change affect their peers?) ->Work Environment (people like to be in control of their work environment like the work itself, climate, or setting)

Corporate Level Strategy (stage 4 SPP) pg. 159

-Must be a company that has other companies (coordinate resources among different business units) *Exhibit 5-8 on page 159* Grand Strategy: Corporate strategy for growth, stability, or turnaround and retrenchment (or combo of the 3). ->Growth=Company makes aggressive attempts to increase its size through increased sales. ->Stability=Company attempts to hold and maintain its present size or grow slowly (Larger companies) ->Turnaround and Retrenchment=Turnaround is the attempt to reverse a declining business as fast as possible. Retrenchment is the liquidation of assets (turn them into cash). Most turnarounds include retrenchment! ->Combination=Companies pursue all of the above Growth Strategies (p. 161): Strategies a company can adopt to grow. ->Concentration=Company grows aggressively in its existing line(s) of business. (ex: opening stores globally through franchising) ->Integration= Enters a new line(s) of business related to existing ones (Forward integration is line of business close to final customer and backwards integration is entering line of business further away from final customer) -SCM forward/backward pass ->Diversification= Company goes into related or unrelated line of products; can be risky (Starbucks selling coffee products in grocery stores, credit cards pairing with iPhone to pay) ->Merger and Acquisition Growth Strategy (p. 162): Merger=When two companies form one corporation (Lance and Snyder's pretzels) Acquisition=When one business buys all or parts of another business (Facebook acquired Instagram) Portfolio Analysis (p.163): Business portfolio analysis is the process of determining which lines of business the corporation will be in and how it will allocate resources among them. Can be a division, subsidiary, or single product line -Corporate portfolio management uses the BCG Matrix (Stars, question marks, cash cows, and dogs) -Single line businesses must conduct a product portfolio analysis

Forces for Change (p.190)

-The Environment: Change may be required internally or demanded by the external environment. Must keep up with competitions innovations -Technology Cycles: Beings with the birth of a new disruptive technology and ends when it's replaced by newer, better technology (CD's replaced records, cars replaced horses) -Next Generation: Old technology still works with the new (Microsoft updating software, can still play Rollercoaster Tycoon on new computer). People prefer next generation because there is less change and costs them less -Management Skills and Functions and Change: Change requires conceptual skills from managers to focus on opportunities. Most decisions made require change which affects employees

Disadvantages of Group Decision Making (p.119)

-Wasted time and slower decision making -Satisficing to pick quick alternatives -Domination and goal displacement -Conformity and members feel pressured to go along with group decision without questioning if it's good -Groupthink by withholding different views which avoids diversity -Social Loafing where one person does all the work and other members do not do enough

Stages in the Change Process (p.197-198)

1. Denial: People deny that change will affect them 2. Resistance: Know it will affect them, but resist the change because they think it is not needed 3. Exploration: Change is being implemented and employees explore the change through training and better understand how it will affect them. 4. Commitment: Through exploration, people determine their level of commitment to making the change a success. Some may continue to resist it *Change is an ongoing, NOT a linear process*

3 things that determine if a problem exists and needs solved (Pg. 113)

1.) Manager is aware of gap between actual and desired objectives 2.) Have resources to deal with problem 3.) Time factor is involved

Five-Force Competitive Analysis (pg. 153)

1.) Rivalry among competing sellers in the industry: Could be high or low competition based on how many differences companies have or how many customers each gets (Wendy's, McDonalds, BK) 2.) Threats of substitute products and services: Threat is moderate and resembles companies that sell similar items (McDonald's Big Mac vs BK Whopper) 3.) Potential new entrants: New companies that try competing (BRGR, Taco Bell selling burgers) 4.) Power of Suppliers: Threat is low to moderate and the suppliers give companies meat to make burgers which gives them authority 5.) Power of buyers: Buyers have moderate to high power over companies and can buy them out and change the company *Start in the middle* (part of industry/competitive analysis)

The Decision-Making Model (pg. 116)

6 Step process for arriving at a decision. Use for decisions that are nonrecurring and have risk or uncertainty! Step 1: Classify and Define the Problem/Opportunity -Programmed of Nonprogrammed decision? ->Programmed=Decisions that arise in recurring, routine situations, nonsignificant, short time, individual decision, and the decision maker uses decision rules or organizational procedures (Don't need all steps of model). ->Nonprogrammed=Decisions that arise and are not repeating/nonroutine, significant, takes longer to make decisions, group decisions, and the decision maker uses the decision-making model. Must be expensive or have major consequences (ex: picking new products to sell, opening a new factory). Made by upper-level managers. -Select appropriate level of participation Determine cause of problem (p. 120)-Cause and effect/symptoms approach where the symptom is a statement of the problem and cause if why it's happening. -Rational Maximizers (make rational decisions by taking their time and weighing lots of options) vs. Rational Satisficers (make bounded rational decisions and are more fast than accurate). Beware of cognitive bias-too much info/options, personal bias/attitudes Step 2: Set Objectives and Criteria -Set objectives gets you focused on the final result and they are the end result and the plan is what is used to achieve the objective (must be specific) -Set criteria (what an alternative must meet to be selected as the decision to accomplish the objective). *Multiple criteria maximizes the decision and should establish "must" and "want" criteria. -Satisficing stops at the first acceptable criteria while maximizing stops at the best possible option -"Want" criteria can be weighted based on importance, but "must" is essential Step 3: Generate Creative and Innovative Alternatives (pg. 124) -Creativity (thinking that generates new ideas) causes thinking outside the box. Leads to innovation (ex: Apple improving the Mp3 into an iPod) -Innovation (the implementation of a new idea) implements creativity and has 2 types: Product=New goods/services and Process=New way of doing things. -Success only comes from taking risks and innovating the creative ideas, stay positive. -Use Information/data to generate alternatives (p.126) -Use Technology to generate alternatives (avoid false information, but look for creativity) -Using Groups to generate alternatives (brainstorming, synectics, nominal grouping, consensus mapping, Delphi technique -Decision Trees (diagram/web to reach solution) Step 4: Analyze Alternatives and Select the Most Feasible -Use analytical thinking -Quantitative techniques: Significant, group, nonprogrammed decisions under uncertainty and risk (break-even, capital budgeting, linear programming, queuing theory, probability theory) -Qualitative technique: Nonsignificant, programmed, under certainty and low risk (intuition) -Big data (algorithms) -Cost-Benefit analysis, Pros/cons, and Intuition Step 5: Plan and Implement the Decision -Must commit to meeting objective, communicate to ensure each role is met, give assignments to others (many plans fail here) Step 6: Control the Decision -Measure and monitor outcomes -Establish checkpoints for feedback, avoid loss aversion (keeping something bad because you won't admit mistakes)

Strategy (graph 5-2 on p. 150)

A plan for pursuing a mission and achieving objectives. *3 Planning Levels of Strategic and Operational Types -Corporate Strategy=Managing multiple lines of business; more than one business in the corporation (strategic planning) -Business Strategy=Managing one line of business (strategic planning) -Functional Strategy=Operational plan for managing one area of a business like operations to make the products and the marketing used to sell them (operational planning)

Business Level Strategy (stage 4 SPP) pg. 164

Adaptive Strategies: Overall business strategies including prospecting, qualifying, and analyzing ->Prospecting: Aggressively offering new products and/or entering new markets to gain opportunities. Resembles grand strategy of growth and is most successful. Used by small companies hoping to grow ->Defending: Staying with present product line and markets and maintaining or increasing customers slowly in new markets. Used by large companies to protect their dominance and resembles grand strategy of stability. ->Analyzing and Imitation: Analyzing calls for midrange approach between prospecting and defending (combination grand strategy). Involves moving into new markets areas in a cautious pace or seek new opportunities by offering product group. Often copy rivals prospecting actions through imitation and wait to see if things are successful. Competitive Strategies: 3 effective ones... ->Differentiation Strategy: Company stresses its competitive advantage over its competitors, focus on being distinctive. Resembles the prospecting strategy and leads to being able to charge higher prices than competitors. ->Cost Leadership (p. 166): Company stresses lower prices to attract customers. Needs tight cost control and efficient low-cost systems to maintain budget (high volume items demand low prices) ->Focus Strategy: Company targets a specific regional market, product line, or buyer group. Can use a differentiation or cost leadership strategy (don't combine these two)

Break-Even Analysis (pg. 130) step 4

Allows calculation of the volume of sales/revenue that results in a profit. Break-even point is when there is no profits or losses and want to be above break-even to make a profit.

Capital Budgeting (step 4)

Analyzes alternative investments in assets that will be used to make money (machines, equipment, building) -Used for make-or-buy, fix-or-replace, upgrade-replacement, and rent/lease-or-buy decisions -Use payback approach to find number of years to recover initial cash investment or use rate of return or discounted cash flow which depends on time value of money

One airline offered free in-flight text messaging. Other airlines waited to see if this service was successful, and if it was, they copied that airline's efforts. What type of adaptive strategy does this statement represent for the other airlines?

Analyzing

Should Darden Restaurants Inc., the owner of Olive Garden, buy an olive farm, what type of growth strategy would this describe?

Backward Integration

Benchmarking and Core Competencies (pg. 155)

Benchmarking: Comparing a companies products, services, and processes with those of other companies (use competitive intelligence and copy other companies processes/products ethically) Core Competencies: What a firm does well (develop products in a way that uses to company's strengths)

Group Decision-Making Techniques (p. 126)

Brainstorming: Suggesting many possible alternatives without evaluation. Include diversity, encourage all members, build on suggestions made by others, no criticizing other ideas, don't evaluate alternatives until all are presented. Spark creativity when walking and using e-brainstorming. Synectics: Generating novel alternatives through role playing and fantasizing. Don't focus on large quantity of ideas and avoid stating the exact nature of the problem to avoid preconceptions Nominal Grouping: Generating and evaluating alternatives using structured voting methods. Listing, recording, clarification, ranking, discussion, and vote. Good to use when groups are affected by disadvantages like domination, goal displacement, conformity, groupthink Consensus Mapping: Developing group agreement on a solution to a problem. There can be no competitive struggle ending in a vote that forces a solution. All must be in agreement making it difficult for a consensus to be reached at times and managers make the decision themselves. Delphi Technique: Use confidential questionnaires to refine a solution. Responses on the first are resubmitted onto the second and process repeats until a consensus emerges. Used for technological forecasting and planning (Upper-level managers use synectics and Delphi technique for a specific decision) *Brainstorming, nominal grouping, and consensus mapping are used at the department level

Decision-Making Conditions (pg. 117)

Certainty: Know the outcome in advance and can take quick action (programmed) Risk: Unsure of outcome but can assign probabilities to each alternative outcome (Made by upper-level management and entrepreneurs, nonprogrammed) Uncertainty: Alternatives of outcome are unpredictable and cannot accurately determine probabilities (Made by upper-level management and entrepreneurs, nonprogrammed) *Risk and Uncertainty can be reduced with more information *For programmed decisions with low risk/uncertainty use individual decision making. Nonprogrammed decisions with high risk/uncertainty use group decision making

Due to increasing competition, Company ABC is going to have to improve their ability to keep their existing customers. What type of change does this statement illustrate?

Change in Strategy

Company X plans to close one of its four plants, and therefore eliminating one of its business divisions. When this happens, what type of change will the plant closure illustrate?

Change in structure

Cost-Benefit Analysis (stage 4) (pg.133)

Compares the cost of implementing a decision to the benefits received. Things you cannot put a price on that benefit you (college, human life) -A mixed technique for comparing the cost and benefit of each alternative using subjective judgement with quantitative math (quantitative and qualitative using objective and subjective judgment) -Judgement=Cognitive process of drawing conclusions using rational reasoning in reaching a decision. Managers use judgement even with Big Data

In addition to its existing locations, should PNC Bank open 12 more branches in Pennsylvania, what type of growth strategy would this describe?

Concentration

Probability Theory (pg. 130) stage 4

Enables user to make decisions that take into consideration conditions of risk. Each alternative is assigned a probability of success or failure, then calculate expected value. Probability theory is used to determine expansion of facilities and pick the most profitable investment.

Queuing Theory (step 4)

Focuses on waiting time. If company has too many employees, they lose money by paying unproductive employees. Having too few can lose customers which loses revenue. Queuing theory helps companies balance the two and determine the amount of employees to schedule and where.

SWOT Analysis (pg. 153-154)

For Starbucks: Strengths=Strong brand name recognition, large distribution system, quality products, good supplier relationships, strong financial and human resources Weaknesses=Depend on single source of business/income, prices are higher than competition, strong dependence on suppliers, only make sales in stores Opportunities=Expansion to overseas markets, expand into untapped U.S. markets, expansion of brand name into new products/lines of business, open upscale coffee shops Threats: Economic conditions make consumers not pay high prices, political conditions abroad may limit expansion, may be reaching saturation point in U.S.

Operational Level Planning (stage 4 SPP) pg. 167

Functional Strategies: Developed and implemented by managers in marketing, operations, HR, finance, and other departments. ->Marketing: Marketing has the primary responsibility of knowing what the customer wants or how to add value and define target market (4 P's) ->Operations: Responsible for systems processes that convert inputs into outputs. Focus on quality and efficiency which determines customer value. -> Finance: Finance the business activities by raising money through sale of stock/bonds, pay off debt and dividends. Also, keep records of transactions, develop budgets, and report financial results. ->Human Resources: Work with all other functional departments in areas of recruiting, selecting, training, evaluating, and compensating employees ->Others Functional Strategies: Information technology and R&D Standing vs. Single-Use Plans (pg. 168): ->Standing Plan: Policies, procedures, and rules developed for handling repetitive situations. Guide employee's day-to-day decision making (organizational governance shape firms actions to complete mission) -Single-Use Plan: Programs and budgets used for handling non-repetitive situations. Are developed for a specific purpose and will not be used again (can be used a model for future) Program=Set of activities designed to accomplish an objective over time. Budget=Funds allocated to operate a unit for fixed period. Requires planning skills and new one is needed every period Contingency Plans and Crises (p. 170): Contingency plan=Alternative plans to be implemented if uncontrollable events occur (employee is sick, fire burns down building) Crisis=Develop contingency plans to prevent unexpected crises (ask others to gain new info)

Company Situation Analysis (stage 2 of SPP) pg. 152

Has 5 Key Parts: 1.) Assessment of the present strategy based on performance: Can be a simple statement or complex comparison of performance indicators (market share, sales, net profit, ROA) over the last five years 2.) SWOT Analysis: An organization of a company's internal and external environment's strengths, weaknesses, opportunities, and threats. 3.) Assessment of competitive strength and identification of competitive advantage: For competitive strength, compare critical success factors for a business to those of each major competitor. Competitive advantage specifies how companies offer unique customer value to stand out (core competencies and benchmarking) 4.) Conclusions concerning competitive position: How are businesses doing compared to competition and what needs changed to improve? 5.) Determination of the issues and problems that need to be addressed through the strategic planning process: What needs to be done in the future to improve a business' competitive position?

Pros and Cons (pg. 133) stage 4

Identify advantages (benefits) and disadvantages (costs) of each alternative.

Managing Innovation During Incremental and Discontinuous Change (pg.196)

Incremental Change (The Compression Approach): -Used in more certain environments during incremental change. Goal is to lower costs and incrementally improve performance of the existing design; improve existing technology as rapidly as possible and use next generation tech (generational change). Use planned series of steps to avoid wasting time and delays Discontinuous Change (Experimental Approach): -Used in uncertain environments during discontinuous change. Goal is to make significant improvements in performance and establish a new design and create next technology cycle. Build something new and different making old technology not needed.

Forms of Change (p.192)

Incremental Change: Continual improvement that takes place within existing technology cycles. Companies innovate y lowering costs and improving performance of existing products (Dyson enhancing vacuums, hairdryers, lights) Discontinuous Change: A significant breakthrough in technology leading to design competition and a new technology cycle. Want to create products that disrupt other companies (Tesla making electric cars to disrupt Ford and put then out of business) -Innovators Dilemma: When new technologies cause great firms to fail (Netflix disrupting Blockbuster, Travelocity disrupting small travel agencies) Technology Adoption Curve (pg. 193): Aka-"Diffusion of Innovations" Illustrates how people adopt new technology within a bell-shaped curve. Sales don't take off until a majority of people buy the product

How to Overcome Resistance to Change (p.200)

Individual Resistance (Habits-3 Parts): -Cue: A trigger that tells your brain to go do something (alarm rings to remind you to run) -Routine: Making a scheduled time to do something everyday (Run in the morning then eat) -Reward: What you get out of the routine and what makes you keep doing it (Stress relief from running, satisfaction from eating a healthy breakfast) Other People's Resistance: In addition to changing attitudes and habits, people can do 7 things... 1.) Develop a positive trust climate for change (Develop good human relations and trustworthiness) 2.) Plan (Plan how to overcome resistance to change by setting clear objectives and make them easy) 3.) Clearly state why the change is needed and how it affects employees (employees want to know why change is necessary and how it is good/bad for them and if it is better than the old way) 4.) Create a win-win situation (meet employees needs while reaching company objectives. Tell them how they benefit and give info in advance) 5.) Involve employees (employees that participate in developing change ae more likely to commit to it) 6.) Provide support and evaluation (Employees need managers to go to for help and extensive training and feedback are needed) 7.) Create Urgency (No procrastination, give change high priority to ensure it gets implemented)

Managing Innovation (p.194)

Innovative Structures: Structure is a means to innovative ends and needed to coordinate internal activities. -Companies that stimulate innovation are flat companies (limited bureaucracy, division of labor, flexible, challenge status quo) -Set up Skunkworks Projects (developed by a small, loosely structures group who develop a product for radical innovation). Often undertaken in secret and high degree of autonomy Innovative Cultures: Needed to survive technology-driven change/innovations. Encourage creativity and innovation (Google, Amazon, Apple) -Encourage Risk Taking (no punishment if they fail, reward those who take risks to get new ideas) -Flexibility (Can't have strict structure because it doesn't allow for the speed of change and giving employees freedom brings in better ideas) -Open Systems (Seek innovation from within and outside the firm)

Change Models (p.203)

Lewin's Change Model: Presents a change-stability paradox going from recognizing the need for change, to implementing it, to making change a habit. Works well with incremental changes (Ice cube method) Comprehensive Change Model: Step 1 (clearly state objective and recognize need for change) Step 2 (Identify resistance to the change and how to overcome it) Step 3 (plan the change interventions) Step 4 (Implement the change interventions) Step 5 (Control the Change)

Planning Dimensions (pg. 150)

Management level (upper/middle and middle/lower), Type of plan (strategic or operational), Scope (broad/directional or narrow/specific), Time (long or short range), Repetitiveness (single-use or standing plan)

Industry and Competitive Situation Analysis (stage 2 of SPP) pg. 152

Must answer "How large is market?" "What is the growth rate?" "How many competitors are there?" -Competition is composed of 5 forces that should be analyzed (Five-Force Competitive Analysis

After 15 years of successful business, the manager of a local sporting goods store decides to open a new store outside of the United States. How would you classify this problem according to the structure and condition under which the decision must be made?

Nonprogrammed decision, risk

Sherry manages a dry-cleaning business, just outside of Atlanta, GA. Although the store rarely closes especially due to the weather, she decides to close early because of the icy road conditions. All customers have picked up their clothing scheduled for today, and most of the surrounding stores have also closed. How would you classify this problem according to the structure and condition under which the decision must be made?

Nonprogrammed, certainty

Organizational Development Interventions (pg.203-204)

OD Interventions: Specific actions taken to implement specific changes (9 of them) 1.) Training and Development: Focus on the individual and provide training to help employees develop skills and behaviors 2.) Sensitivity Training: Groups of 10-15 and have no agenda. People learn about their behavior and how it affects others (focus on individual behavior in a group) 3.) Team Building: Help work groups increase structural and tram dynamics and performance. Helps new or existing groups improve effectiveness in setting objectives, planning, decision making, developing honest relationships. Depend on team needs and vary in time and agenda 4.) Process Consultation: Designed to improve team dynamics. Has more narrow focus on intervention and focuses on how people interact as they get a job done (work together) 5.) Forcefield Analysis: Diagrams current level of performance, forces hindering change, and the forces driving toward change. Figure out desired change and group members develop strategies for driving/hindering forces 6.) Survey Feedback (p.205): Uses questionnaire to gather data to use as the basis for change. Identify problems and areas for improvement. 7.) Large-Group Intervention: Brings together participants from all parts of the company and key outside stakeholders to solve problems and take advantage of opportunities. 50-500 people and lasts for many days and focus on functional diversity while including key stakeholders. 8.) Work Design: Organizational structure that can be designed for a group (departmentalization) or individual (job). Job enrichment makes them more interesting or challenging. 9.) Direct Feedback: The change agent makes a direct recommendation for change. Use more outside consultants as change agents

Linear Programming (step 4) pg. 130

Optimum allocation of resources (time, money, materials, employees, equipment) -Used for programmed decisions under conditions of certainty or low risk, but also applied to product-mix decisions.

Organizational Development (p.203)

Organizational Development (OD): The ongoing planned process of change used as a means of improving performance through interventions (Human Resources is responsible for OD) Change Agent: The person responsible for implementing an organizational change effort (also called "OD practitioners" and runs an OD intervention; can be an employee or hired consultant)

Resistance to Change (p.198)

People resist change for 6 reasons: 1.) Uncertainty: Causes us to react defensively by denying the need for change. Easier to keep the known status quo and fear of unknown brings out fear of failure. 2.) Learning Anxiety: New learning makes us temporarily incompetent and lead to rejection 3.) Self-interest: Resist change that threatens our own self-interest and are more concerned about our best interest, not the good of the company 4.) Fear of Loss: Change makes winners and losers. Jobs could possibly be lost through change or a pay cut or impact schedules at work/life 5.) Fear of Loss of Control: Don't like the feeling that our destiny, powers, or status is controlled by someone else 6.) Successful Habits: When we are already successful, we think change is not needed, even with change, we fall back to old habits

Policies, Procedures, Rules (pg. 168)

Policies: General guidelines to be followed when making decisions (serve as guides for employee behavior in relationships with stakeholders; guide daily decisions) Procedure: A sequence of actions to be followed in order to achieve objective (aka standard operating procedures). Can be formal or informal and are more specific than policies and establish routines with consistency Rules: Statements of exactly what should/should not be done.

A customer complains to the restaurant manager that their table is dirty and is in need of attention. How would you classify this problem according to the structure and condition under which the decision must be made?

Programmed decision, certainty

Company X started small, but very quickly opened new stores globally to enter new markets. What type of adaptive strategy does this statement represent?

Prospecting

Decision-Making Styles (pg. 114)

Reflexive: Makes quick decisions without taking time to get info that is needed and consider alternatives ("shooting from the hip"). Pros=Decisive, don't procrastinate Cons=Quick decisions lead to waste and duplication Tips: Be rational, slow down, don't rely on emotions Ex: Rushing caused Samsung phones to catch on fire leading to recalls and loss of profits Reflective: Takes plenty of time to make decisions, gather lots of info, and analyze several alternatives. Pros=No hasty (rushed) decisions Cons=Indecisive, procrastinate, lose opportunities, waste valuable time and resources Tips: Speed up decision making Ex: Saying "I should have done this a long time ago" or "My biggest mistakes were because I moved too slow" or "Indecisive can be your downfall" Consistent: Make decisions without rushing or wasting time Key=Find and analyze data quickly and accurately -Are not always successful, but are more successful of the two and have the best record for making decisions. They follow steps in the Decision-Making Process

Intuition (pg. 134) stage 4

Select alternative based on experience and rational judgement. Can be used with programmed or nonprogrammed decisions

The high school football team has had a successful record. The quarterback, in particular, attributes his success to the team's stringent weight-lifting program. This summer, the trainer is implementing a new weight-lifting program. The quarterback has already expressed his concerns, indicating that this change is not needed. What is the primary reason for his resistance?

Successful habits

Big Data (pg. 131) stage 4

The analysis of large amounts of quantified facts to aid in maximizing decision making. Done through algorithms and software. Data makes companies more efficient and profitable. -Algorithms perform calculations, data processing, and automated reasoning by following a set of rules. Can reveal patterns and opportunities that 99% of business people would miss. Humans are being replaced by computer algorithms -Big Data provides info to marketing, accounting, operations, and other departments.

The Creative Process (pg. 125) step 3

The approach of generating new ideas. 3 Stages: 1.) Preparation: Define the problem, look for new angles, use imagination/invention, think outside the box, and generate as many solutions as possible with no judgement 2.) Incubation and Illumination: Stop working on project and subconscious works on the problem (incubation) and you may gain insight into a solution and have an epiphany (illumination). 3.) Evaluation: Evaluate the alternative solution to make sure it is practical. Become the Devil's Advocate (group members defend a solution while others try to come up with reasons the solution should not work) to lead to more creativity

Strategic Planning

The process of developing a mission and long range objectives and determining in advance how they will be accomplished. -Long-term plans (typically 5 year plans) Ex: Starbucks deciding to open new stores and expand their business to overseas and grocery stores

Decision Making

The process of selecting a course of action that will solve a problem. -One of the three critical management skills -Decisions lead to success or failure -Decide whether to take corrective action -Jeff Bezos made a good decision by starting Amazon Ex: NBA staff makes a decision on what to implement that will solve a problem (Creating electronic tickets to gain fan attendance)

Operational Planning (pg.150)

The process of setting short range objectives and determining in advance how they will be accomplished. -Short-term plans (1 year or less) Ex: Starbucks having annual sales forecasts or marketing plan for an individual store developed by a store/regional manager

Problem Solving

The process of taking corrective action to meet objectives. Ex: NBA partnering with Ticketmaster to sell their tickets to fans

Problem

The situation that exists when objectives are not being met (you have a problem whenever there is a difference between what is actually happening and what you want to happen) Ex: Want to produce 1,500 units, but production only makes 1,400. That's a problem

Time Management (p.170)

Time Management=Techniques that enable us to get more done in less time with better results -Use a time log (daily diary of 15 min increments that tracks your activities and shows how you spend or waste time) Time Management System: Evidence-based with a proven record of success. -Priorities: Don't waste time on unimportant tasks like social media (Do hardest and most important activities first) and do tasks uninterrupted. -Time Management Steps: 1.) Plan each week (be realistic and focus on what you get done, not what is left to do) 2.) Schedule each week (helps avoid distractions and focus on priorities) 3.) Schedule each day (Focus on what you must get done; highest priority first, then do less essential tasks To-Do Lists: Good for nonrecurring tasks and avoid procrastination Time Management Techniques (pg. 173): Respect other people's time.

Leonardo accepted his offer to Penn State. As the time to move away from home comes nearer, he is anxious and nervous to attend Penn State. He knows college is going to be different from high school, but he does not know what to expect. What is the primary reason for his resistance?

Uncertainty

Types of Change (p.191)

What actually changes within the company? 4 Types: -Changes in Strategy: Corporate, business, and functions strategies change over time (IBM started selling PC's to Lenovo in China and offered more services like the cloud and AI) -Structure: How a company is departmentalized into work units and changes with innovation. As small companies grow, they get more structured. -Technology: Essential to the systems process. May need to change how a job is done based on technology (need to be flexible and change quickly) -People: Adopt new behaviors, change in organizational cultures. When tasks change from technology, people must change their skills and performance. *Are the most important resource*