Fundamentals of Management Exam 2 (Ch. 5-8)

means-end chain

A hierarchy of goals; in the chain of management (operational, tactical, strategic), the accomplishment of low-level goals are the means leading to the accomplishment of high-level goals or ends

A business plan is a tool used by the federal government to determine how to strengthen the business sector through macroeconomics and microeconomics.

False

strategic goals

Goals that are set by and for top management and focus on objectives for the organization as a whole

Why should you encourage Derin to use groups to make decisions?

Groups have a greater pool of knowledge.

Strategic control

Monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed

SMART goal

Specific, Measurable, Attainable, Realistic, Timely

Farrah, a regional manager for an HVAC equipment retailer, received an e-mail from the CEO outlining the new goal of decreasing company costs over the next three years. This is an example of a strategic goal.

True

Flora's Fruit + Fresh is one of several local stores where customers can purchase locally grown fruits and vegetables. Each week, Flora also offers workshops in her store on topics such as canning, healthy eating, and growing a garden, which no other local store does. By offering these unique workshops, Flora is engaging in strategic positioning.

True

Optimistic people view challenges as opportunities to influence decisions.

True

business plan

a document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring success

________ refer(s) to the arrangement that ensures strategic goals align downward with more specific short-term goals.

cascading goals

When Henry Ford implemented the assembly-line process to dramatically decrease the time and resources needed to make automobiles, he was pursuing a ________ strategy.

cost-leadership

Action plans

course of action needed to achieve a stated goal

To decide how much an insurance policy should cost a customer, underwriters use ________, such as historical industry trends and loan characteristics, to predict risk levels.

data analytics

organizational opportunities

environmental factors that the organization may exploit for competitive advantage

business level strategy

focuses on individual business units or product/service lines

A(n) ________ is a system of consciously coordinated activities or forces of two or more people.

organization

According to the BCG matrix, stars are

organizations with high growth and high market share which are definite keepers

Business model

outlines the need the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expenses

A financial services company with insurance, investments, mortgages, and banking divisions is best characterized as having a

product structure.

Victoria, a shift manager in a shoe factory, directly supervises 40 employees on her shift. The 40 workers who report directly to Victoria represent her

span of control.

SWOT analysis

strengths, weaknesses, opportunities, threats

short-term goals

tend to span 12 months and are connected to strategic goals in a hierarchy known as a means-end chain

In the third step of the strategic management process, managers should

translate the broad mission and vision into a corporate strategy.

A ________ expresses what the organization should become and where it wants to go strategically.

vision statement

When you encounter negative thoughts or sense that others are trying to elicit an emotional response from you, which key skill of being open-minded should you enact?

watch for communication blocks

planning/control cycle

A cycle that has two planning steps (1 and 2) and two control steps (3 and 4), as follows: (1) Make the plan. (2) Carry out the plan. (3) Control the direction by comparing results with the plan. (4) Control the direction by taking corrective action in two ways—namely (a) by correcting deviations in the plan being carried out, or (b) by improving future plans

________ is the arrangement of having discrete parts of a task done by different people.

A division of labor

Porter's four competitive strategies

Also called four generic strategies; (1) cost leadership, (2) differentiation, (3) cost-focus, and (4) focused-differentiation. The first two strategies focus on wide markets, the last two on narrow markets

operational planning

Determining how to accomplish specific tasks with available resources within the next 1-week to 1-year period; done by first-line managers

tactical planning

Determining what contributions departments or similar work units can make with their given resources during the next 6 months to 2 years; done by middle management

Two advantages of decentralization are that (1) managers are encouraged to ask for assistance to solve their problems, and (2) decisions are made more slowly because they are discussed at a higher level of management.

False

Strategy formulation

The process of choosing among different strategies and altering them to best fit the organization's needs

Strategic positioning

Strategy that attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company

Porter's model for industry analysis

Model proposes that business-level strategies originate in five primary competitive forces in the firm's environment: (1) threats of new entrants, (2) bargaining power of suppliers, (3) bargaining power of buyers, (4) threats of substitute products or services, and (5) rivalry among competitors

execution

Using questioning, analysis, and follow-through in order to mesh strategy with reality, align people with goals, and achieve the results promised

contingency planning

Also known as scenario planning and scenario analysis; the creation of alternative hypothetical but equally likely future conditions

For a company making advanced technology, with highly specialized components, a customer divisional structure would be more effective than a modular structure.

False

strategic planning

Determines what the organization's long-term goals should be for the next one to five years with the resources they expect to have available

Evidence-based management includes bragging about new products you have in development.

False

operational goals

Goals that are set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals

tactical goals

Goals that are set by and for middle managers and focus on the actions needed to achieve strategic goals

innovation strategy

Grows market share or profits by innovating improvements in products or services

VRIO

Is a framework for analyzing a resource of capability to determine its competitive strategic potential by answering four questions about its Value, Rarity, Imitability, and Organization

Planning

Setting goals and deciding how to achieve them; also, coping with uncertainty by formulating future courses of action to achieve specified results See also Decision making; Strategic management; Strategic planning

current reality assessment

The second step of a process that I can't think about atm Assessment to look at where the organization stands and see what is working and what could be different so as to maximize efficiency and effectiveness in achieving the organization's mission

Management by Objectives (MBO)

a four-step process in which (1) managers and employees jointly set objectives for the employee, (2) managers develop action plans, (3) managers and employees periodically review the employee's performance, and (4) the manager makes a performance appraisal and rewards the employee according to results

Strategy

a large-scale action plan that sets the direction for an organization

BCG Matrix

a management strategy by which companies evaluate their strategic business units on the basis of (1) their business growth rates and (2) their share of the market

Benchmarking

a process by which a company compares its performance with that of high-performing organizations

Strategic Management

a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals

Once her team's goals were set, Alyssa asked each team member to come up with a(n) ________ to reach the goals.

action plan

As the CEO of a mid-size airline, Karyn knows that most commercial airplanes are manufactured by either Airbus or Boeing. To mitigate the ________ of the airline industry, Karyn explores options for her company to manufacture its own airplanes.

bargaining power of suppliers

corporate level strategy

focuses on the organization as a whole

Colin, who is a paralegal for a powerful Manhattan law firm, likes the fast pace of his work and the fact that things are always changing there. Colin can be said to

have a high tolerance for ambiguity.

A boundaryless organization is one that

is fluid and highly adaptive and whose members come together to collaborate on common tasks.

For a manufacturing company that set a strategic goal to reduce waste by 15%, each division in the organization can use the ________ to identify tactical goals that support waste reduction.

means-end chain

Cascading goals

objectives are structured in a unified hierarchy, becoming more specific at lower levels of the organization

The key reasons that an organization should adopt planning and strategic management are to

provide direction and momentum, encourage new ideas, and develop a sustainable competitive advantage.

Snowcap Ice Cream produces over a dozen delicious ice cream flavors and a number of individually packaged frozen treats. Which of these strategies would represent vertical integration for Snowcap?

purchasing Mountain Dairy milk farm

defensive strategy

Also called retrenchment strategy, one of three grand strategies, this strategy involves reduction in the organization's efforts

Scenario analysis

Also known as scenario planning and contingency planning; the creation of alternative hypothetical but equally likely future conditions

Some large publishers have stopped publishing children's books because they are expensive to produce and distribute. This is an example of an offensive strategy.

False

The manager of a retail pharmacy stated that "the pharmacy will increase its profit margins." This is an example of a SMART goal.

False

After three patients sued Guardian Manor, an assisted living facility, for neglect, missing medications, and improper nutritional offerings, Ivana, the CEO, wants to encourage employees to speak up more and to be comfortable voicing concerns. Which of the following would be encouraged by Ivana?

George tells a story about a time when Guardian Manor was first starting out and how the employees banded together.

cost-focus strategy

One of Porter's four competitive strategies; keeping the costs, and hence prices, of a product or service below those of competitors and to target a narrow market

cost leadership strategy

One of Porter's four competitive strategies; keeping the costs, and hence prices, of a product or service below those of competitors and to target a wide market

focused differentiation strategy

One of Porter's four competitive strategies; offering products or services that are of unique and superior value compared to those of competitors and to target a narrow market

differentiation strategy

One of Porter's four competitive strategies; offering products or services that are of unique and superior value compared with those of competitors but to target a wide market

growth strategy

One of three grand strategies, this strategy involves expansion—as in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served

The logistics manager for a trucking company told her employees that "85% of deliveries should arrive within 45 minutes of their scheduled arrival times." This is an example of a

SMART goal

diversification

Strategy by which a company operates several businesses in order to spread the risk

Research shows that most managers vary between two or three decision-making styles, and that decision-making styles vary across occupations, job level, and countries.

True

Willow, the youngest owner of a family-owned restaurant, wants to make sure her company's culture is embedded. In a recent tradeshow workshop, she learned that she can do this by having company rites and rituals, continuing to tell stories about company legends, and being a role model to her employees.

True

Samir owns a dental practice, but business has slowed down significantly over the last six months. Which analysis would you recommend to Samir to help him determine whether his dental practice has competitive potential?

VRIO framework

A ________ is a graph of decisions and their possible consequences.

decision tree

When Bedisa is analyzing underlying causes, she is engaged in

diagnosis.

Zahra, the human resources manager, has significant experience handling ethical issues in the workplace. Over the years she has received extensive training in matters of workplace ethics. Due to Zahra's legal background (she is a member of the state bar association), the management of her company rely on Zahra to assist them with legal issues, especially with ethical dilemmas. Her organization should appoint Zahra as the

ethics officer.

A local university is facing some tough decisions, so they are using the decision tree, which contains individuals, websites, and organizations that specialize in handling sensitive and difficult decisions.

false

During a situational analysis of the ________ of her dog training service, Jaela determined that one of her strengths was that trained dogs retained their skills for at least three months after training, and that one of her weaknesses was that very few clients brought another dog to her for training.

internal environment

Cornelius owns Grand Games, a high-end store that retails games and toys that are handcrafted and carefully selected. Cornelius targets customers who value artisanal work, such as backgammon sets made from reclaimed lumber by local crafters. There are several stores in the area that sell mass-made toys and games that are much cheaper. To compete, Cornelius offers "game nights" where he sets up game boards and invites local teens and adults to take part in light-hearted competitions, where the winners receive a 10% discount on their next purchase. Cornelius also takes custom orders for game pieces that his customers want, such as 12-sided dice or newly invented games. All of Cornelius's activities are aimed at giving Grand Games a sustainable competitive advantage through

strategic positioning

operating plan

typically designed for a one-year period, defines how you will conduct your business based on the action plan; it identifies clear targets such as revenues, cash flow, and market share