MGT 3200 Exam 1

What is the difference between an administrator and a manager?

Administrators are managers who work in public or non-profit organizations as opposed to managers who work in private organizations with business concerns

What gives rise to the three managerial roles, according to Mintzberg?

All managers have authority over their organizational subunits and they derive status from that authority. This status causes managers to be involved in interpersonal relationships with subordinates, peers, and supervisors who, in turn, provide managers with information they need to make decisions.

What are the three managerial roles Mintzberg identified? Be able to identify each role.

All managers perform these roles: Interpersonal (sub-roles: figurehead, leader, and liaison) - this role involves interacting through oral and written communications with others inside and outside your organization. The purpose is to develop and maintain positive relationships with others. If your relationships are negative, then you may get poor information or no information and as a result, you may make bad decisions. Informational (sub-roles: monitor, disseminator, and spokesperson) - this role involves information processing. You receive information, you give information, and you analyze information. This role makes the manager a nerve center for the entire organization. Decisional (sub-roles: entrepreneur, disturbance handler, resource allocator, and negotiator) - this role involves using information to solve problems or take advantage of opportunities.

What is a SWOT analysis?

Analysis of internal Strengths and Weaknesses and external Opportunities and Threats

What are the four elements of strategy formulation and what does each element consist of?

Analysis of the organization's mission and objectives, analysis of the environment, analysis of the organization, analysis of managerial values

What levels of strategy does the Business Portfolio Matrix Approach deal with?

Both corporate and business level strategy

What does the article, "Avoid pricing yourself short", say about competing on price as a strategy for attracting customers?

By competing on price, you give up money and respect, and ultimately lose customers.

How does each strategy type in the Adaptation Model answer the entrepreneurial, engineering, and administrative questions?

Defender - ENTR: seal off market share through overall cost leadership. Stable growth strategy ENG: efficient production ADMIN: tight control, centralized decision making Analyzer - ENTR: to defend market share with some products and innovate with other products. Scan for new opportunities while protecting current position ENG: efficient production for some products and flexibility for new lines ADMIN: tight control over old lines and lose control for new lines. Centralized decision making for old lines and decentralized for new lines Prospector - ENTR: find and exploit new markets, scan the environment constantly for new opportunities ENG: flexible production, don't get tied to one technology or invest heavily into a certain production system ADMIN: loose control to encourage innovation, coordination, and creativity. Decentralized decision making Reactor - Answers always changing, inefficient

What is a defender? Prospector? Analyzer? Reactor? When is a defender strategy the best?

Defender - management sees demand for their product as not growing Analyzer - management sees environment as moderately changing Prospector - management sees environment as dynamic, growing Reactor - worst strategy, reacts to environment. No set strategy, no set production process or organizational design. Answer to the three questions is always changing, INEFFICIENT. Each strategy (except for reactor) is best when it's congruent with the environment. Defender is best when the environment is stable, analyzer when it's intermediate in terms of change, and prospector is best when it's dynamic

How are the strategies in the Business Portfolio Matrix Approach and the Adaptation Model of Strategy related to one another?

Defender = Cash cow Prospector = New venture, star Analyzer = Cash cow, new venture, and star

What is contingency planning? What are the benefits and drawbacks?

Developing multiple future scenarios and the plans to accompany each scenario - "what if" planning. Benefits = greater flexibility, drawbacks = requires greater time and resources

What are the three Generic Strategies identified by Porter? Be able to identify.

Differentiation - developing an image of the organization's product or service in such a way that customers view it as being different from all others Cost competitive advantage - attempts to maximize sales by minimizing cost per unit and hence prices. It tries to increase sales volume by charging lower prices Focus - an organization concentrating its attention on a specific segment of an overall market such as a customer group, geographical location, or specialized product line. An organization that employs a focus strategy tries to serve the needs of its selected market segment more effectively or efficiently

What are benefits of a mission statement?

Strategy formulation, legitimacy, goals that members of the organization identify w/ and become committed to

According to Luthans study, ___________

successful managers were the ones who had high performance teams

What are the keys to effective implementation of a plan?

Clear communication, resources to implement the plan, people must be motivated to implement the plan

Buckingham and Coffman's 4 Levels of Customer Service

1. Accuracy - customers expect their order to be correct and the price charged was the one agreed to 2. Availability - customers expect the business to be open when they can use it and/or have problems 3. Partnership - customers want the business to listen to them, be responsive to them, and understand their perspective 4. Advice - customers feel the closest bond to organizations that help them learn. This is the highest level of customer service. First 2 merely prevent customer dissatisfaction, last 2 create customer satisfaction

3 ways to provide superior customer service

1. Make it easy to complain 2. Make a timely, personal response to the complaint 3. Make sure your response to the complaint is effective

What percent of effective managers are successful?

Less than 10% of managers in a sample were both effective and successful. The managers that were promoted rapidly through the organizational ranks were the best networkers

What determines if a supplier is powerful? Customer?

A supplier is powerful if the buyer has few other sources of supply or if the supplier has many other buyers The customer is powerful if they make large purchases or if they have many other choices as to where to buy the product

How does the international component of the environment influence organizations?

A threat and an opportunity, more opponents = threat, more people to buy = opportunity

What business strategy is used for a cash cow? Star? Dog? New venture?

Cash cow - select stable growth strategy or possibly in some instances, a retrenchment strategy Star - select growth strategy Dog - if it had positive cash flow, then you may select a retrenchment strategy, if it has losing money, then get rid of it New venture - if you believe that the new venture has a good chance of succeeding, select a growth strategy. If you believe that a new venture does not stand a good chance of succeeding, then select a divestiture strategy or a retrenchment strategy

What is the basic dilemma in planning?

Commitment increases, but willingness to plan/flexibility decreases

Effective managers in the study spent the majority of their time on what activity?

Communication

What is the law of the marketplace?

Companies that cannot compete will be faced with either changing their product line or being eliminated

What skill is most difficult to develop? Why?

Conceptual skills are most difficult to develop because they require a minimum level of mental ability and time/experience to develop

What is corporate downsizing? What happens in corporate downsizing? What levels of management is most adversely affected?

Corporate downsizing - when a company adopts a "lean and mean" philosophy, an efficiency orientation. Trying to cut the fat by eliminating layers of management, asking retained managers/employees to do more, such as legal counsel and training and development of employees to outside consulting firms. The result of this efficiency orientation has been that many middle level management jobs have been eliminated altogether or have been replaced by new information technologies or have been farmed out to outside consulting firms; middle level management jobs seem to be in jeopardy

What is corporate strategy and business level strategy?

Corporate strategy focuses on "what businesses do we want to be in?" Therefore, it is focused primarily on scope and resource deployment. Business-level strategy, on the other hand, focuses on how do we want to compete in a business, market, or industry. It is primarily concerned with competitive advantage and synergy.

What is the crystal ball syndrome? Cure-all syndrome? Persian messenger syndrome?

Crystal ball syndrome is the idea that all you have to do to be a successful manager is forecast the future and develop a plan. The cure-all syndrome is the assumption that a plan will cure all the problems of your organization. The Persian messenger syndrome is the practice of punishing the person who brings you bad news about your plan.

What are the two major dependencies in the external environment? What is the threat to these two major dependencies?

Customers and suppliers are the two major dependencies and the greatest threat is competition

How do customers influence organizations and how do organizations influence customers?

Customers try to force down prices, obtain more or higher quality products and increase competition among sellers by playing one against another. The organizations deal with customers by advertising and market research.

What is the cyclical nature of the transformation process? Negative entropy? Buffering the technical core? Role differentiation and specialization? Synergy? Equifinality?

Cyclical nature of the transformation process - transformation activities produce outputs that alternatively will become new sources for inputs. This also provides a feedback loop. Negative entropy - entropy refers to the tendency for systems to decay over time. Ability of open systems to bring in new energy to arrest or delay this decaying process. As a result, organizations import more energy that they export. Buffering the technical core - open systems try to maintain, or at least attempt to maintain, their basic character by controlling or neutralizing threatening external forces for change. They want to maintain stability in production so as to increase efficiency. Ideally, we want long runs of products using the same machinery so we can work out the kinks and become more proficient. Role differentiation and specialization - as open systems grow and develop, there is an increasing tendency toward the elaboration of roles and specialization of function. Organizations develop specialized units to deal with particularly troublesome or challenging parts of the environment. Synergy (2+2=5) - the ability of the whole to equal more than the sum of its parts. This means that an organization ought to be able to achieve its goals more effectively and efficiently than would be possible if the parts operated separately. Equifinality - systems can often reach the same end by different means. Organizations facing the same environment can structure themselves differently and still be successful. This concept emphasizes the flexibility and adaptability of organizations.

What happened to productivity (supply), prices, and demand as a result of the industrial revolution?

Division of labor > increase productivity > decrease prices > increase consumer demand

On what activity do effective managers spend the majority of their time? Successful managers?

Effective - communication, building trust, manages down Successful - networking, manages up

What function of management is Phase 5: Evaluating Results?

Effectiveness

What are the 2 key concerns of management?

Effectiveness - Concerned with doing the right thing at the right time in the right way, concerned with goal attainment Efficiency - Concerned with reducing waste or minimizing resource costs since many resources are scarce, concerned with increasing outputs while maintaining the same level of inputs or keeping the same level of outputs while decreasing the level of inputs Effectiveness is concerned with the ENDS and efficiency is concerned with the MEANS to those ends

What are the five phases of the planning process and what happens at each phase?

Establishing objectives - objectives provide the direction for all other management functions. They are based on perceived opportunities and threats. You should follow the SMART model for establishing objectives: (S)pecify in terms of the desired result, (M)easurable, (A)chievable, (R)elevant, (T)rackable Developing premises - developing premises about future environment in which the objectives are to be accomplished. Forecasting, contingency planning, "what if" planning, and flexibility Decision making - selecting the best course of action for accomplishing the objectives created in phase 1. 3 steps: identifying alternatives, evaluating each alternative in light of premises about the future, and selecting the alternative with the highest probability of success Implementing a course of action - assigning direct personnel to carry out the plan Evaluating results - comparing actual results to hoped-for results and taking action accordingly

What is (are) the most important function(s) for a first-line manager? Middle manager? Top manager?

First-line management - staffing and leading are the most important functions since you are dealing with operative level employees and the production process Middle-level management - organizing is the most important function since a middle-level manager's job entails integrating work groups Top-level management - planning is the most important function since top-level managers are supposed to determine the overall goals and strategies of the organization

What is the shadow bureaucracy?

For every department of an organization, there is an equal counterpart government agency that oversees that department's work

What is the difference between a functional manager and a general manager?

Functional managers - have responsibility for a single area of activity such as finance, production, human resources, accounting, etc. Most managers are functional managers General managers - responsible for more complex organization subunits that include many functional areas

What is the difference between a line manager and a staff manager?

Line managers - directly responsible for the work activities that contribute to the process of creating the organization's basic product or service, they have authority over the transformation process where inputs are transformed into outputs. Every manager who links the tire-molding supervisor with the CEO is also a line manager, examples: departments of marketing, finance, etc. Staff managers - their special expertise is to support the efforts of line managers. Unlike line managers, they have no authority over the transformational process. An example of a staff manager would be a lawyer from the legal department in the organization. Staff manages are for the most part, middle level managers. Examples: departments of accounting, HR, R and D, etc.

What are the three ways organizations influence government?

Lobbying, direct political action, and illegal activity

What are the barriers to entry into an industry?

Government regulation, capital requirements, brand identification, cost advantages, distribution channels

What was the pivotal event of our time, according to Drucker?

Growth in size of production became a problem for owners who could no longer manage all operations of a factory. Owners had to hire people to help manage, these people were managers by profession and did not own the means of production. According to Drucker, this switch from owner/manager to professional managers is the pivotal event of our time, brought about by the industrial revolution's creation of a need for professional management

What is your important resource as a manager?

Human resources

What are the general effects of technology on an industry?

Increase competition and product obsolescence

How does the economy influence an organization?

Indirectly

What are the three basic characteristics of an open system?

Input, transformation, and output

How much more does it cost to find a new customer than to keep an old one, according to Total Quality Management estimates?

It is 5 times more to get a new customer than to retain an existing customer

What is the primary difference between derailed executives and executives who made it to top management, according to the Center for Creative Leadership?

Major difference was that the derailed executives were insensitive to others. The only way you get ahead is through other people.

How are SBUs classified in the Business Portfolio Matrix Approach?

Market growth and market share

What are the three aspects of controlling?

Monitoring organizational performance Comparing actual performance with "hoped for" performance Taking corrective action in one or more of the functions if actual results fall short of "hoped for" results. This process is also called feedback; feedback is both informational (tells you right and wrong) and reinforcing (motivational)

Successful managers in Luthans study spend the majority of their time on what activity?

Networking

According to Luthans (1988), are effective managers successful managers in general?

No they are not - effective managers are usually not the ones promoted rapidly through the organizational ranks

Why do managers resist planning?

One of many functions, hard work, used to measure results, takes time and is expensive, lack of immediate feedback, involves change, fear of failure/lack of self-confidence, not rewarded by organization, goes against "doer" mentality

Why is planning important?

Organizational success, sense of unity and direction, coping with change, performance standards, and managerial development

What is PAC? What are the limits regarding PAC contributions to campaigns?

PAC is a political action committee in which employees and stockholders band together and donate money to a PAC which then donates money to a candidate. This is called soft money. $5,000 limit on direct contributions, no limit on soft money.

What provides the basis for Phase 1: Establishing Objectives?

Perceived opportunities and threats

What are the five functions of management? Be able to identify and describe the five functions of management.

Planning - the process of establishing goals and defining the methods by which they are to be attained, involves goal setting and action planning to achieve those goals Organizing - the process of designing an organization's structure to achieve its goals, includes the determination of what tasks are to be done, who is to do them, how the tasks are to be grouped into jobs, how these jobs are to be grouped into departments, how these departments are to be integrated or coordinated, who reports to whom, and where decisions are to be made Staffing and Human Resource Management - the process of assuring competent employees are selected, developed, and rewarded to help accomplish organizational goals. Activities such as recruiting new employees, selecting the best employee for a position, developing employees to take on new jobs, giving incentives for high performance are considered part of this function. Leading and Interpersonal Influence - the process of getting people to go along with you willingly and harmoniously in achieving your organization's objectives. Activities such as motivating employees, directing others, selecting the most effective communication channel, and resolving conflicts Controlling - the process of assuring the efficient accomplishment of organizational goals

What are the siamese twins of management?

Planning and controlling are called the siamese twins of management. You can't improve performance by having just one of these two present; both must be present.

What does "planning has primacy" mean?

Planning is said to have primacy because it is the first thing you must do as a manager. Planning provides the direction for all the other management functions. "If you fail to plan, you plan to fail"

Why do most businesses fail?

Poor management is cited as the reason for business failure

How do powerful suppliers and customers influence organizations?

Powerful suppliers and customers can cut into profit

What are process and product innovations? What is the focus of each?

Process innovations are innovations made in the technology used in transforming inputs into goods and services. Product innovations are innovations made in the basic good or service an organization provides.

What are the five subsystems of an organization? What functions do each subsystem perform?

Production subsystem - produces the product and service outputs of the organization; where the primary transformation process takes place. Remaining subsystems are organized around the production subsystem. Internally oriented. Boundary-spanning subsystem - handle transactions at organizational boundaries; control the boundary and are responsible for exchanges with the environment. They serve two major purposes for the organization: they detect and process information about changes in the environment and they represent the organization's interests to the environment. On the input side, boundary-spanning subsystems acquired needed supplies and materials. On the output side, they create and deliver outputs. The boundary-spanning subsystem is the purchasing department on the input side and the marketing department on the output side. Externally oriented. Adaptive subsystem - responsible for organizational change; scans the environment for problems, opportunities, and technological developments. Responsible for creating innovations and for helping the organization change and adapt. This department is concerned more with organizational effectiveness than with efficiency. Mostly externally oriented. Maintenance subsystem - responsible for the smooth operation and upkeep of the organization. Its duty is to see that employees are satisfied with their jobs, are compensated fairly, and are working under humane conditions. Maintenance functions include departments such as human resources. Internally oriented. Management subsystem - responsible for directing the other subsystems of the organization; coordinates other subsystems and resolves conflict between departments. Responsible for developing an organizational structure and directing tasks within each subsystem. It also must legitimize the organization to society. For example, when society views a business as having a legitimate right to exist or sees the business as a benefit or being of value to society, the business can be proactive rather than reactive in its approach to managing its environment.

What does a middle level manager do? What are the names associated with middle level managers?

Referred to as plant manager, division head, etc. They manage other managers. This is a testing ground from which many organizations fill top management positions. Two functions: Integrator - Coordinating the activities of different work groups so they operate in harmony with one another and are better able to cope with demands made upon them Interpreters - Interpret and transform top management directives into first-line management; are a communication channel between different levels of management

What does a top manager do? What are the names associated with top management?

Referred to as the CEO, chairman of the board, executive vice-president, etc. They determine the form of the organization and define its overall character, mission, and directions; they determine the business the organization wants to be in and how the organization is going to compete in that business. They set the strategy for the organization; determine the organization's general goals and the action plans to achieve those goals. They ensure that goals are set and accomplished according to the organization's purpose and they monitor the environment to identify potential problems and opportunities associated with the organization's goals or purpose. Note: They have to have more of an effectiveness orientation since they determine the right business to be in and the right way to compete; all levels of management are concerned with efficiency and effectiveness, the levels just differ

What are the four ways that government influences organizations?

Regulation - purpose is to improve the quality of life Subsidization and taxation - subsidies help business survive (AKA corporate welfare). Taxation is used to encourage or discourage business Government competition - Law which says that supply creates its own demand which advocates a free marketplace without artificial obstacles to trade (post office vs UPS) Government economic policy - lobbying, direct political action like voting, illegal action like bribes and kickbacks, and cultural and social-like customs in foreign countries and traditions

How do substitutes affect an industry?

Result of technological innovation, limits an industry's potential growth. The industry can suffer in earnings and growth unless it improves its product or the product may become completely obsolete.

What are the five forces of competition and how does each influence the level of competition within an industry?

Rivalry among organizations - jockeying for a position. Competition is greatest in mature low-growth markets Threat of new entrants - seek to gain market share. They cause prices to decrease and resource costs to be inflated which decreases profitability and increases competition Threat of substitutes - substitutes limit an industry's growth potential or could make the existing product obsolete Power of the suppliers - can reduce an organization's profits. A supplier has power if the buyer has few other resources of supply or if the supplier has many other buyers Power of the customers - customers can demand higher quality, lower prices, or more services and they can also play competitors off one another

Is management art or science? When is it considered a science? An art?

Science - it is considered a science since we develop theories of managing, test these theories empirically using the scientific method, and refine, reformulate or discard these theories based upon the results of these studies Art - for some, managing is really just a natural extension of their personalities. It comes easy or natural to them If the practice of management were a pure science, anyone could become successful following a step-by-step formula, but in reality, this is not the case

What are the four components of a well-thought out strategy? Be able to identify.

Scope - specifies the range of markets in which the organization will compete Resources deployment - how it will distribute its resources among various areas of the business Distinctive competency - something an organization does well that sets them apart from other organizations Synergy - how the different areas of the business enhance or complement one another

What are SMART goals?

Specify desired results, measurable, achievable, relevant, and trackable

Which characteristic of an open system is synonymous with teamwork?

Synergy

At what level of management are conceptual skills most important? Technical skills? Human skills?

Technical - as you ascend the pyramid, the amount of technical skills you need decreases. First-line managers need the most technical skills because they are dealing with the production process and technical employees. Top-level managers must have some technical knowledge especially when technology is an important part of the product of service their organization provides Human skills - are equally important at all levels of the management pyramid. All managers must have strong human skills Conceptual - as you ascend the management pyramid, conceptual skills become more important. As the emphasis on planning increases, so does the emphasis on conceptual skills

What are three managerial skills identified by Katz? Be able to identify each skill.

Technical skill - an ability to use a special expertise relating to a method, process, or procedure in performing a task. Examples: engineering, accounting, QBA, and finance. Human skill - ability to work well in cooperation with others. Examples: ability to motivate people, leadership, communication, self-awareness, and empathy. This is a critical skill for managers due to the highly interpersonal nature of managing. Conceptual skill - ability to problem solve; think in the abstract and in terms of the future; forecast events, to see opportunities that no one else sees, and to take advantage of these opportunities. It's the ability to see the big picture; people also call it intuition or "that gut feeling". Most difficult to acquire because they require a minimum level of mental ability (i.e. reasonably intelligent) and time/experience to develop.

Which of the following is not true concerning managerial skills?

Technical skills are not important at top management

What is Gresham's law of planning?

Tendency for routine/repetitive problems to overshadow planning problems; wrong priorities

How does society influence business? Business influence society?

The changes in social opinions influence business. Business influences society through charity and philanthrophy as well as trying to legitimize their business to society

How did management become important and why is it still significant today?

The industrial revolution brought on a lot of change to management in the workplace. Professional management is still important because it's the key to efficiently obtaining an organization's goals.

What is the focus of strategic planning?

The long-term relationship of an organization with its environment

What is the goal of the Business Portfolio Matrix Approach?

The portfolio matrix categorizes strategic business units (SBUs) in terms of their rate of market growth and their relative market share. The objective is to assist managers in allocating resources to SBUs in order to maximize profit and market share goals. It also helps the manager decide which strategy to use for each SBU.

What is environmental scanning? How is it related to planning and organizational performance?

The process of monitoring and evaluating changes and trends in the environment. The evaluation of changes and trends in the environment can be quite helpful in determining goods or services to emphasize, markets to explore, opportunities to develop, and technology to exploit

What was the basic change in the industrial revolution?

The transfer of skills from craftsmen to machines. Factories became more common - unskilled laborers simply fed the machine raw materials, removed the finished product, and so on. In other words, labor was divided in these factories, and as a result, employee skill level decreased, requiring supervision and coordination to get goods produced.

What is management?

There is no single, universally accepted definition Management is the process of achieving desired results through the efficient utilization of human and material resources

What is the basic idea behind Generic Strategies?

These strategies can be applied to a wide variety of industries

How are effectiveness and efficiency related?

These two goals are related in that it's much easier to be effective if one disregards efficiency Conversely, it becomes increasingly more difficult to be effective when one becomes more and more concerned with efficiency Efficiency doesn't guarantee effectiveness, if there is more concern for efficiency, effectiveness is harder to achieve

What does the non-planner typically blame for his/her poor performance?

They blame poor performance on an external locus of control many times, i.e. bad luck

What happens when a new entrant comes into the market/industry?

They seek market share so they drive supply up, demand stays constant, prices decrease, and costs increase

What is the basic idea behind the Adaptation model of strategy?

This model states that, in order to be effective, an organization's strategy must be aligned with the environment or be congruent with the environment. Entrepreneurial questions: How do we want to compete in the market? What type of product mix do we want to have? etc. Engineering questions: How do we produce and distribute this product or service? Administrative questions: How do we design our organization to achieve the solutions to the above two questions?

What does the article, "When competitive advantage is neither," say about competitive benchmarking as a strategy?

To achieve high growth in the future, companies need to break the vicious circle of competitive benchmarking and imitation

What are the three purposes of planning?

To establish and help achieve organizational objectives, to offset future uncertainties by reducing the risk surrounding the organization's operations, and seeking out and taking advantage of opportunities to increase organizational success

What are the different failures to avoid in planning? Be able to identify.

Top down delegation, key line managers left out, lack of supportive climate for planning, plans that are too rigid and/or complex, failure to manage your plan, getting bogged down in the details of the plan, unrealistic expectations

What does a first-line manager do? What are the names associated with first-line management?

Usually referred to as supervisor or foreman, and are usually the largest number of managers in an organization. Most people enter management at this level; efficiency driven; population consists mostly of college grads and labor pools. They are the first contact with labor or operative level employees; are the middle men caught between labor and management. They only manage operating employees and resources, they do not manage other managers. Primary objective is to ensure that plans developed by top management are fulfilled by their operating employees. Note: Usually have to be more efficiency-oriented since they carry out plans from upper management

How do suppliers influence organizations and how do organizations influence suppliers (i.e. 3 ways to establish and maintain a positive relationship with suppliers)?

Vertical integration - buy your supplier Long term contracts - lock in the supply costs at a low price. You are forecasting that future prices will be much higher than the price that you have locked into. Reducing the number of suppliers - this allows you to give larger contracts to suppliers which allows them to achieve economies of scale and become more efficient.

Role differentiation and specialization in an organization ________________

help an organization deal with troublesome aspects of the external environment