Management class final

This question contains two parts; be sure to answer both. First, explain at least four of the nine common decision-making biases, and give an example of each. The nine common biases are as follows:

1. Availability bias—using only the information easily available. For example, because of the efforts of interest groups or celebrities, more news coverage may be given to AIDS or to breast cancer than to heart disease, leading people to think the former are the bigger killers when in fact the latter is.2. Confirmation bias—seeking information to support one's point of view. For example, a manager looks only for data that supports his recent customer service strategy, rather than information that is counter to it.3. Representativeness bias—faulty generalization from a small sample or single event. For example, if you hired an extraordinary sales representative from a particular university, that doesn't mean that same university will provide an equally qualified candidate next time.4. Sunk-cost bias—money already spent seems to justify continuing. The sunk-cost bias is sometimes called the "Concorde" effect, referring to the fact that the French and British governments continued to invest in the Concorde supersonic jetliner even when it was evident there was no economic justification for the aircraft.5. Anchoring and adjustment bias—being influenced by an initial figure. It is sometimes seen in real estate sales. Before the crash in the real estate markets, many homeowners might have been inclined at first to list their houses at an extremely high (but perhaps randomly chosen) selling price. These sellers were then unwilling later to come down substantially to match offers that reflected what the marketplace thought the house was really worth.6. The overconfidence bias—people's subjective confidence in their decision making is greater than their objective accuracy. For instance, with experienced investment advisors whose financial outcomes simply depended on luck, "the illusion of skill is not only an individual aberration; it is deeply ingrained in the culture of the industry."7. The hindsight bias—the tendency of people to view events as being more predictable than they really are, as when at the end of watching a game we decide the outcome was obvious and predictable, even though in fact it was not.8. The framing bias—shaping how a problem is presented. The framing bias is the tendency of decision makers to be influenced by the way a situation or problem is presented to them. For instance, customers have been found to prefer meat that is framed as "85% lean meat" instead of "15% fat," although, of course, they are the same thing.9. Escalation of commitment bias—increasing commitment to a project despite negative feedback about it. A website called Swoopo.com capitalizes on this bias by offering a penny auction in which, say, a $1,500 laptop is offered for bidding starting at a penny and going up one cent at a time, but it costs bidders 60 cents to make a bid. "Once people are trapped into playing," suggests one account about this form of bias, "they have a hard time stopping."

Summarize the four decision-making styles. For each style, explain the extent to which a person has a high need for structure, control, and ambiguity in his or her life.

1. Directive: People with a directive style have a low tolerance for ambiguity and are oriented toward task and technical concerns in making decisions. 2. Analytical: People with an analytical style have a high tolerance for ambiguity and are oriented toward task and technical concerns in making decisions. 3. Conceptual: People with a conceptual style have a high tolerance for ambiguity and are oriented toward people and social concerns in making decisions. 4. Behavioral: People with a behavioral style have a low tolerance for ambiguity and are oriented toward people and social concerns in making decisions.

Describe the six important cultural areas that international managers have to deal with in cross-border business.

1. language, 2. interpersonal space, 3. Communication, 4. Time orientation, 5. Religion, 6. Law and political stability

Summarize a business model.

A 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. It also describes the industry you're entering, how your product will be different, how you'll market to customers, how you're qualified to run the business, and how you will finance your business.

The question has two parts; be sure to complete both. First, summarize Michael Porter's model for industry analysis, explaining each of the five primary competitive forces. Next, imagine you are the CEO of The Big Ram, a company that sells ramen noodles. Give an example of each of the five primary competitive forces in The Big Ram's environment.

According to Michal Porter, business-level strategies originate in the five primary competitive forces in a firm's environment:1. Threats of new entrants: New competitors can affect an industry almost overnight, taking away customers from existing organizations. For The Big Ram, new companies may enter the market for ramen noodles, offering new flavors or varieties, or undercutting The Big Ram's prices.2. Bargaining power of suppliers: Companies without multiple suppliers are at the mercy of the one. Some companies are readily able to switch suppliers, but others are not. If The Big Ram sources all of its noodles from one supplier, it will be at that supplier's mercy.3. Bargaining power of buyers: Customers who buy a lot of products or services from an organization have more bargaining power than those who don't, and customers who use the Internet to shop around are better able to negotiate a better price. Consumers' tastes may change. If people suddenly decide that ramen noodles are unhealthy, The Big Ram's business could take a nose dive.4. Threats of substitute products or services: Other companies may offer similar or different substitute products. The Big Ram may find itself attacked by Kraft, which has decided to lower the price of its macaroni and cheese in order to take business away from The Big Ram.5. Rivalry among competitors: Other ramen noodle companies, like Nissin and Top Ramen, want to be the most successful and will always be looking for ways to take market share from The Big Ram.

Imagine the following situation: You work for a multinational hotel chain. The hotel, which has its corporate headquarters in the United States, has a policy of delighting and surprising its guests by making them feel extremely welcome. Corporate has a policy that the housekeepers will leave a yellow daffodil on each guest's bed while cleaning the rooms during the day. However, managers at the French and German hotels have objected to this policy. The French managers says that yellow has connotations of jealously, betrayal, weakness, and contradiction in France. In the 10th century, the French painted the doors of traitors and criminals yellow. The German managers say that yellow symbolizes jealousy in Germany. These managers would rather leave a different type of flower for their guests.How would an ethnocentric manager respond to the individual hotel managers' requests? How would a polycentric or geocentric manager respond?

Ethnocentric managers believe that their native country, culture, language, and behavior are superior to all others. An ethnocentric manager at the corporate office of the hotel chain would likely respond to the French and German managers' requests with something like, "We have determined that daffodils are people's favorite flower, and the country doesn't matter. You're making too much of the color. It's the flower itself that matters. Corporate has made this decision, and you will implement it because we've done our market research and we know best."Polycentricmanagers take the view that native managers in the foreign offices best understand native personnel and practices, and so the home office should leave them alone.Geocentricmanagers accept that there are differences and similarities between home and foreign personnel and practices and that they should use whatever techniques are most effective. A polycentric or geocentric manager at the hotel's corporate office would respond to the French and German managers, "You know best what will make our guests in France and Germany feel the most welcome. What type of flower do you propose to leave on the guests' beds instead of a daffodil to make them feel welcome, and to give our hotel a positive association in their minds?"

This question has two parts; be sure to answer both. First, explain the three ways Hugo Munsterberg believed psychologists could contribute to industry. Next, imagine that you manage a hair salon and apply each of Munsterberg's principles to your daily tasks as a manager.

Hugo Munsterberg believed psychologists could contribute to industry in three ways: (1) study jobs and determine which people are best suited to specific jobs, (2) identify the psychological conditions under which employees do their best work, and (3) devise management strategies to influence employees to follow management's interests.In your job as the manager of a hair salon, you would study jobs and determine which people are best suited to specific jobs. For example, you may find that one stylist does her best work on women with long hair, while another stylist achieves spectacular results with color or daring hair styles. Looking at your workers, you would want to understand the psychological conditions under which employees do their best work. Because your employees work in the beauty industry, you might imagine that they care about appearances—and that they would therefore do their best work in a salon that is decorated tastefully and expertly. As you look to devise management strategies that influence employees to follow management's interests, you would look for win-win situations. For example, you might arrange with the local newspaper to profile a different member of the staff each week. The interview would make each employee feel important (and help the stylists develop a following). By developing their own followings, the stylists bring in additional revenue to the salon, which is completely in sync with management's interests.

Define forced ranking. What are its benefits and drawbacks?

In a forced ranking performance review system, all employees within a business unit are ranked against one another, and grades are distributed along some sort of bell curve. Top performers are rewarded with bonuses and promotions; the worst performers are given warnings or dismissed.Proponents of forced ranking say it encourages managers to identify and remove poor performers and structures a predetermined compensation curve, which enables them to reward top performers. Opponents contend that the system eventually gets rid of talented as well as untalented people. There may also be legal ramifications, as when employees file class-action lawsuits that the forced ranking methods had a disparate effect on particular employee groups. In addition, numeric ratings, rankings, and formal evaluations without positive feedback may produce the opposite of intended results ny creating a culture of reduced performance. Finally, forced ranking systems seem inappropriate today, when over 70% of workers are employed in service or knowledge-intensive jobs in which skills, attitudes, and abilities are hard to evaluate along a bell curve.

Summarize Laurence Kohlberg's three levels of personal moral development. Imagine that you manage a local gym, and explain how your management style or techniques would be different at each level.

Kohlberg's three levels of personal moral development are preconventional, conventional, and postconventional.Level1,preconventional—follow rules. People who have achieved this level of moral development tend to follow rules and to obey authority to avoid unpleasant consequences. Managers of the Level 1 sort tend to be autocratic or coercive, expecting employees to be obedient for obedience's sake. As a gym manager who operates at Level 1, you would probably expect all of your personal trainers, class instructors, and front-desk staff to be extremely punctual and to do as you say without questioning you. Level2,conventional—follow expectations of others. People whose moral development has reached this level are conformist but not slavish, generally adhering to the expectations of others in their lives. Level 2 managers lead by encouragement and cooperation and are more group and team oriented. Most managers are at this level. As a gym manager who operates at Level 2, you will consider your employees a team, and you will work with them to achieve the goals set by corporate, such as selling a certain number of new memberships per month, or booking a certain number of hours of personal training per week. To achieve the former goal, you might call meetings of your sales/marketing staff to discuss ways to achieve the new-membership goal, and you might meet with your trainers as a team to discuss ways for them to network and bring new personal-training clients into the gym.Level3,postconventional—guided by internal values. The farthest along in moral development, Level 3 managers are independent souls who follow their own values and standards, focusing on the needs of their employees and trying to lead by empowering those working for them. Only about a fifth of American managers reach this level. As a gym manager who operates at Level 3, you might be more willing to "talk back" to the corporate office, communicating when you believe goals are not achievable rather than slavishly adhering to them and forcing them on your employees. You might also advocate for your employees, trying to find ways for them to advance in their careers and earn more money.The United States has utilized tariffs, import quotas, embargoes, and sanctions over the years. Explain why America has used these, and give an example of each.

This question has two parts; be sure to answer both. First, explain at least one of Mary Parker Follett's ideas on how organizations should become more democratic. Next, suppose you work at an advertising agency as an account manager. You are responsible for keeping your clients (the advertisers) happy, but you do not do the creative work of designing the ads. Explain how you might manage a conflict with one of your most talented ad designers, who does not agree with the client's ideas and does not want to implement them.

Mary Parker Follett believed organizations can become more democratic with managers and employees working cooperatively. Some of her most important ideas on how organizations can become more democratic are (1) organizations should be operated as "communities," with managers and subordinates working together in harmony; (2) conflicts should be resolved by having managers and workers talk over differences and find solutions that would satisfy both parties—a process she called integration; and (3) the work process should be under the control of workers with the relevant knowledge, rather than of managers, who should act as facilitators.As an account manager at an ad agency, you know that you need your artists and designers to create eye-catching advertisements based on the client's ideas and your ideas for translating the client's wishes into words and images. Ideally, you would identify the source of the conflict—why exactly does your designer not like the client's idea? From that point, you can offer additional perspective—"Maybe the client's ideas are bad, but the client pays the bills, and we have to give the client what he wants." From there, you can work with the designer to push his boundaries of creativity to find ways to use the client's ideas but in a manner that is appealing to the designer's artistic sensibilities.

Define and explain the three roles that managers play, according to Henry Mintzberg. Also explain and give an example fo the subroles within each category.

Mintzberg identified three important roles played by managers:Interpersonal roles—Managers interact with people inside and outside their work units. The three interpersonal roles include figurehead (performing symbolic tasks that represent your organization, such as attending employee birthday parties), leader (being responsible for the actions, successes, and failures of your subordinates as in taking responsibility when an employee does something unethical), and liaison activities (working with other people outside your work unit to develop alliances that will help you achieve your organization's goals, as in talking to managers of other departments to help facilitate the flow of work among different employee groups).Informational roles—As monitor, disseminator, and spokesperson, managers receive and communicate information with other people inside and outside the organization. In the monitoring role, you are constantly alert for useful information, perhaps reading The Wall Street Journal daily to keep up with changes in the economy. In the disseminator role, you make sure employees receive key information, such as information about changes in company policy or new markets the company is planning to enter. In the spokesperson role, you show the company's best face to people outside the company, perhaps by granting interviews with the local news station to talk about the company's new environment-friendly manufacturing techniques.Decisional roles—Managers use information to make decisions to solve problems or take advantage of opportunities. The four decision-making roles are entrepreneur, disturbance handler, resource allocator, and negotiator. As an entrepreneur, you initiate and encourage change and innovation, perhaps by leading an initiative to decrease energy consumption by 10 percent within the office. As a disturbance handler, you fix unforeseen problems, perhaps using technical skills to help get the production process back on track. As a resource allocator, you set priorities about the use of resources, making sure that you are investing time and money in activities that will offer a high return on investment. As a negotiator, you work with others inside and outside the organization to accomplish your goals, understanding the give-and-take (negotiating skills) that successful management requires.

This question has two parts; be sure to answer both. First, describe the four common elements of organizations proposed by Edgar Schein. Next, imagine that you work for a nonprofit animal-rescue organization, Animalia, Inc. Describe how each of the four elements relates to that organization's activities and operations. Animalia has several full-time employees, plus many volunteers (including veterinarians) who rescue and care for hurt and abandoned animals.

Organizational psychologist Edgar Schein proposed the four common elements of (1) common purpose, (2) coordinated effort, (3) division of labor, and (4) hierarchy of authority.The common purpose unifies employees or members and gives everyone an understanding of the organization's reason for being. At Animalia, Inc., the common purpose is to rescue animals that have been hurt and/or abandoned.The common purpose is realized through coordinated effort, the coordination of individual efforts into a group or organization-wide effort. Animalia, Inc. has central offices and phone numbers that people can call to report abandoned animals. People in the home office coordinate the volunteers who go out and rescue the animals, as well as those who care for the animals once they are brought in.Division of labor, also known as work specialization, is the arrangement of having discrete parts of a task done by different people. Animalia, Inc., has different people performing different tasks. For example, volunteers in the home office take calls, while specially trained animal-catchers go out to catch the animal so that it can be treated. Trained veterinarians who volunteer for the organization provide treatment for the animals who are hurt.The hierarchy of authority, or chain of command, is a control mechanism for making sure the right people do the right things at the right time. Animalia, Inc., will have a CEO or key manager, who may divide the nonprofit organization into several workgroups: fundraisers, marketers, civilian volunteers, veterinarian volunteers, and so on.

Nike's famous tagline, "Just do it," is an example of a slogan, not a business plan or a strategy. Briefly describe the differences among these key terms: planning, a business plan, and a strategy.

Planning is defined as setting goals and deciding how to achieve them, or coping with uncertainty by formulating future courses of action to achieve specific results. A business plan is a document that outlines a firm's proposed goals, the strategy for achieving them, and the standards for measuring success. A strategy sets the long-term (one to five years) goals and directions for an organization.

Imagine that you are the manager of a housekeeping service. Specifically describe how you would use the four functions of management to run your services for the next week.

Planning is setting goals and deciding how to achieve them. The manager of a housekeeping service must set goals for how many houses the company will clean each month and how the company will go about getting (and keeping) clients.Organizing is arranging tasks, people, and other resources to accomplish the work. The manager of the housekeeping service must hire qualified and trustworthy employees to do the work, and must then schedule them accordingly.Leading is motivating, directing, and otherwise influencing people to work hard to achieve the goals. The manager of the housekeeping service should not sit behind a desk all the time; he or she should get out and meet the customers and visit housekeeping sites to talk with employees about the challenges they face and how they can contribute to the company.Controlling is monitoring performance, comparing it to goals, and taking corrective action as needed. The manager of the housekeeping service will need to monitor the amount of time it takes each team to clean a house and whether each employee is pulling his or her share of the weight. If any employee is not performing up to expectations, the manager needs to take corrective action (perhaps a warning, perhaps an assignment to a different aspect of the job).

Countries often use these barriers as a form of trade protectionism, which is the use of government regulations to limit the import of goods and services. Often the goal of protectionist policies is to protect domestic industries against foreign competition and to protect domestic jobs.

Tariffs are duties or taxes levied on imports. Tariffs may be used to raise money for the government (revenue tariffs) or to protect domestic production (protective tariffs). An example of the first type is the U.S. tax on all imported oil and gasoline. An example of the second type is the U.S. tariff on solar panels made in China.Importquotas are limits on the numbers of a product that can be imported. They are often a response to dumping, which is the practice of a foreign company's exporting products abroad at a lower price than the price in the home market—or even below the costs of production—in order to drive down the price of the domestic product. The United States has used import quotas to protect domestic steel production against Chinese competition.Embargoes are complete bans on import or export of products from a specific country. They are often the result of geopolitics; sometimes an embargo is placed on a country to "punish" it for doing something that the world community disapproves of, such as building atomic weapons. For many years, the United States had an embargo on products from Cuba.A sanction is the trade prohibition on certain types of products, services, or technology to another country for specific reasons, including nuclear nonproliferation and humanitarian purposes. A sanction is a partial embargo. For example, the United States has trade sanctions with North Korea that prohibit the export of any material that would help North Korea with its nuclear program.

List at least eight of ten reasons that employees resist change.

Ten reasons employees resist change are as follows: (1) individuals' predisposition toward change; (2) surprise and fear of the unknown; (3) climate of mistrust; (4) fear of failure; (5) loss of status or job security; (6) peer pressure; (7) disruption of cultural traditions or group relationships; (8) personality conflicts; (9) lack of tact or poor timing; and (10) nonreinforcing reward systems.

This question has two parts; be sure to answer both. First, describe the five benefits for companies of expanding internationally. Second, imagine that you are the CEO of REDO, a highly successful company that remodels and redecorates houses in the United States. The company also manufactures its own line of furniture, draperies, and home furnishings. Give an example of at least one way REDO might take advantage of each of these benefits.

The benefits of expanding internationally are:1. Availability of supplies. For example, for many years U.S. oil companies have expanded their activities outside the United States in seeking cheaper or more plentiful sources of oil. The managers of REDO will be able to source products from many other countries. For example, they might import high-end marble or granite from mines in Africa or Asia because purchasers of upscale homes often demand counters made from these materials.2. New markets for old products. Sometimes a company will find, as cigarette makers have, that the demand for their product has declined domestically but that they can still make money overseas. A home remodeling and redecorating company like REDO may find itself with excess inventory of products that have gone out of fashion, such as particular fabrics, patterns, or furniture styles. The company can sells these products internationally, at lower prices, in markets that are less concerned with fashion.3. Lower labor costs. For example, maquiladoras (manufacturing plants allowed to operate in Mexico with special privileges in return for employing Mexican citizens) provide less expensive labor for assembling everything from appliances to cars. Because labor costs are high in the United States, REDO might outsource the manufacturing of its furniture line (couches, tables, chairs, and so on) to other countries with lower labor costs (such as China or the Philippines). It might outsource its customer service to India, as so many other companies have done.4. Access to financial capital. Many people across the world are eager to invest in U.S. companies. REDO may attract investors from other countries who are impressed by its profitability. Perhaps investors see REDO as the next IKEA, which has made a global success out of Scandinavian home design by offering good quality at an affordable price.5. Avoidance of trade barriers. For example, Japan imposes tariffs on agricultural products, such as rice, imported from the United States. To avoid these penalties, a company might create a subsidiary to produce the product in the foreign country. REDO may find that it cannot export its furniture to Spain, which has placed an import quota on couches and chairs manufactured in other countries. If the Spanish market for REDO's furniture is large and profitable enough, REDO may decide to open a plant in Spain and manufacture furniture there, thereby getting around the quota. An additional benefit is that it will be less expensive for REDO to ship this furniture to other European countries from Spain than it would be to ship it from the United States.

This question has two parts; be sure to answer both. First, define span of control and contrast the two kinds of spans of control. Second, imagine that you are the manager of the customer-service department for a major furniture retailer, which has 40 CSR's (customer service representatives) on the phone lines at any given time during business hours. Can you be effective as a manager with such a wide span of control? Why or why not?

The span of control, or span of management, refers to the number of people reporting directly to a given manager.There are two kinds of spans of control, narrow (or tall) and wide (or flat).Narrow span of control: This means a manager has a limited number of people reporting—three vice presidents reporting to a president, for example, instead of nine vice presidents. An organization is said to be tall when there are many levels with narrow spans of control.Wide span of control: This means a manager has several people reporting—a first-line supervisor may have 40 or more subordinates, if little hands-on supervision is required, as is the case in some assembly-line workplaces. An organization is said to be flat when there are only a few levels with wide spans of control.Research suggests that, when aided by technology to communicate and monitor, a manager can oversee 30 employees or more. Because all of your CSR's are in one location, and because technology makes it easier to monitor their progress, you should be able to manage these workers effectively (though you may be tired quite a bit of the time).

Which three important concepts are covered by EEO laws? Briefly explain each.

Three important concepts covered by EEO are (1) workplace discrimination, which occurs when people are hired or promoted—or denied hiring or promotion—for reasons not relevant to the job, such as skin color, national origin, eye shape, religion, and the like; (2) affirmative action, which focuses on achieving equality of opportunity within an organization by actively finding, hiring, and developing people from groups traditionally discriminated against; and (3) sexual harassment, which consists of unwanted sexual attention that creates an adverse work environment and which may be of two types—the quid pro quo type, which may cause direct economic injury, and the hostile environment type, in which the person being harassed experiences an offensive work environment.Workplace discrimination comes in two forms. Adverse impact occurs when an organization uses an employment practice or procedure that results in unfavorable outcomes to a protected class (such as Latinos) over another group of people (such as non-Latino whites). Disparate treatment results when employees from protected groups (such as people with disabilities) are intentionally treated differently.

This question has two parts; be sure to answer both. First, describe the four parts of a system. Next, imagine that you own a one-person business. You create beautiful, elaborate wedding cakes (for which you charge a large sum of money). What are the components of your wedding cake business system?

—The four parts of a system are (1) inputs—the people, money, information, equipment, and materials required to produce an organization's goods or services; (2) transformationprocesses—the organization's capabilities in management, internal processes, and technology that are applied to converting inputs into outputs; (3) outputs—the products, services, profits, losses, employee satisfaction or discontent, and the like that are produced by the organization; and (4) feedback—the information about the reaction of the environment to the outputs that affects the inputs. Are the customers buying or not buying the product?In your wedding cake business, the inputs are the flour, cream, sugar, and fillings that you use to make your product. The transformational process is what we would call cooking (mixing ingredients, baking the cake), but it also includes creative elements like creating decorations from fondant and assembling the entire cake into an edifice that will stand up and not fall apart. Your output is, of course, the wedding cakes themselves. Your feedback will often come in the form of compliments from the happy bride and groom about how delicious the cake was—or complaints from the unhappy bride and groom about how dry, tasteless, and ugly the cake was (in which case, you won't be in business for much longer).