MNGT 3100 exam 2
What is strategic management?
A planning process which will position the organization to its best competitive advantage in the environment -To set overall direction and objectives of the organization -To formulate specific strategy to achieve objectives -For the long-term
Describe the role of a supplier/ distributor in an organization as well as how they are affected by an organizations decisions
Accepting favors or kickbacks, violating contract terms, paying w/out accurate records
Define explicit strategy/plan of action
Achieve competitive advantage
What is the concept of means-end chain?
Achievement of goals at lower levels permits the attainment of high-level goals
A well defined mission =
Basis for all of the following (subsequent) goals and plans
Define the term plan
Blueprint for goal achievement and specifies the necessary resource allocations, schedules, tasks and other actions
Explain what strategic goals (senior management) are
Broad statements describing where the organization wants to be in the future; pertain to the organization as a whole ex. Trader Joe's has achieved its strategic goal of a nationwide chain of grocery stores, but trying to expand has made it difficult for the company to retain its "cozy feel"
Explain what a mission statement is
Broadly stated definition of purpose that distinguishes the organization from others of a similar type
Describe the role of an employee in an organization as well as how they are affected by an organizations decisions
Can be affected by discrimination, hostile work environment and violating health and safety rules
Centralization vs De-centralization
Centralization: decision authority is located near the top of the organization De-centralization: authority is pushed downward to lower organizational levels
Explain the individualism approach for evaluating ethical behavior
Choosing the alternative which produces the best long-term advantage for the individual; believed to lead to honesty and integrity; closest to domain of free choice
What does it mean to deliver value?
Combo of benefits and costs
Explain the practical approach for evaluating ethical behavior
Decisions based on whatever the typical person in society would think is acceptable
Define the term goal
Desired future state that the organization attempts to realize
How can we evaluate cooperate social responsibility along a discretionary criteria?
Guided by a company's desire to make social contributions not mandated by economics, law or ethics; generous philanthropic contributions that offer no payback to the company and are not expected
Explain the philosophy of sustainability
Helps managers weave environmental and social concerns into every strategic decision so financial goals are achieved in a way that is socially and environmentally responsible *Go Back and look at this on the study guide*
According to porter what is differentiation and how does it help ones company? (1 of porters 3 competitive strategies)
Make your product sufficiently different to create value -Create loyalty among customers who will pay higher prices -Company needs strong marketing ability -Reduces threat of substitute products, creates entry barriers (the bullets aren't key, just reference)
How does a business reflect their values, attitudes, beliefs and behavior patterns?
Through their practices and how they conduct their business
How does the post-conventional level of moral development effect an individuals ethical decision making?
individuals are guided by an internal set of values based on universal principles of justice and right and will disobey rules or laws that violate these principles (managers use transforming or servant leadership; empowered employees, full participation) only about 20 percent of adult Americans reach this level
How are ethical organizations created through organizational structures and systems?
-Code of ethics - a formal statement of the company's values concerning ethics and social issues (ex. Motorola's code of business conduct) -Corporate culture -Whistle blowing mechanisms (a person who exposes any kind of information or activity that is deemed illegal, unethical, or not correct within an organization)
What three things do clear roles and accountability do? (1 of the 4 organizational tools)
-Delegate authority and responsibility -Create teams -Define roles
What are the 4 support activities of an organizations value chain?
-Firm infrastructure -Human resource management -Technology development -Procurement
What are functional structures?
-Group people with similar skills -Work units have similar skills and tasks such as finances, marketing, production, and human resources.
What are the 5 primary activities of an organizations value chain?
-Inbound logistics -Operations -Outbound logistics -Marketing and sales -After-scale service
Explain the matrix approach to structure and its application to domestic and international organizations
-Matrix has product managers for each division of functional (HR, manufacturing, accounting) -Violates unity of command because people reporting to two managers for different groups -Can shift around as needed for various divisions - coordination and efficiency of systems while being able to focus on flexibility for product and customer base
What three things does visible leadership do? (1 of the 4 organizational tools)
-Motivate people -Shape culture and values -Model desired behaviors
What three things do candid communication do? (1 of the 4 organizational tools)
-Open lines of communication -Encourage debate -Be honest
What are Porters 5 competitive forces?
-Potential new entrants: internet reduces barriers to entry; capital cost of entry, specialized knowledge -Threat of substitute products: internet creates new substitution threats -Rivalry among competitors: internet blurs differences among competitors -Bargaining power of buyers: influence customer has on a company's prices; internet shifts greater power to end consumers -Bargaining power of suppliers: influence suppliers have in setting prices for their parts, materials or services; internet tends to increase bargaining power of suppliers
What three things do Human Resources do? (1 of the 4 organizational tools)
-Recruit employees -Manage transfers and promotions -Provide training
Competitive advantage is achieved through the achievement of what four qualities?
-Superior value - Rarity - Difficult to imitate - Non-substitutability
Describe the contemporary team and virtual network structures and why they are being adopted by organizations
-Team based is decentralized (ex. Google) -Network: evaluation of the value chain; your core company is focused on core competence (central hub) then outsource (Zara; bringing in outside accountants, marketing, etc... things that aren't your core competence) ---> don't have as much control when you outsource; important to have good contracts because main company is going to be blamed, not the outsourced companies
How are ethical organizations created through ethical leadership?
-role modeling -uphold ethical values in organization -communicate about ethics and values -reward ethical behavior -swift discipline of unethical behavior
What three socialization processes allow individuals to engage in unethical acts?
1- Co-optation 2- Incrementalism 3- Compromise
What are the two types of teams and describe them?
1- Cross-functional teams: furthers horizontal coordination because participants from several departments meet regularly to solve ongoing problems of common interest 2- Permanent teams: solving ongoing problems; employees come from all functional areas
What are the 6 steps of the planning process?
1- Determine strategic vision 2- Define organizational mission 3- Analyze external environment & analyze internal resources 4- Establish objectives 5- Formulate strategy 6- Implement strategy (action plans, implement plans, monitor outcomes)
What three answers must a manager be able to answer 'yes' to ignorer to confirm they are making an ethical decision?
1- Is my decision within accepted values and standards of business today? 2- Are you willing to communicate the decision to all groups? 3- Would people I am closest to approve this decision?
What 4 rationalization mechanisms allow individuals to act in an unethical way?
1- Offer more justification 2- De-humanize the victim 3- Displace the responsibility 4- Minimize the consequences
What are the three levels of moral development in individuals?
1- Pre-conventional 2- Conventional 3- Post-conventional
Identify the 6 shareholders of business
1- Stockholders/ Owners 2- Managers 3- Customers 4- Employees 5- Community 6- Suppliers Distributors
What two factors shape an organizations ethical decision making?
1- The manager's values 2- The company's values
What four organizational tools are used for implementing strategy?
1- Visible leadership 2- Candid communication 3- Human resources 4- Clear roles and accountability
What is vertical integration?
An organization looks at opportunities to create value by producing its own inputs or distributing its own products
Explain the justice approach for evaluating ethical behavior
Basing decisions on standards of equity, fairness and impartiality; choose alternatives which result in fair and impartial treatment to involved parties; closest to domain of law
How can we evaluate cooperate social responsibility along an ethical criteria?
Behaviors that are not necessarily codified into law and may not serve the corporation's direct economic interests (Merck is example of unethical behavior when continued to push arthritis drug knowing its posed side-effects)
Describe crisis planning
Develop plans for sudden, devastating events; have potential to destroy organization if managers aren't prepared with a quick and appropriate response. (ex. BP oil spill did it wrong; JetBlue has a crisis planning team in place)
What are the 3 forms of justice and briefly explain them?
Distributive justice: different treatment of people not based on random characteristics Procedural justice: requires that rules be administered fairly Compensatory justice: argues that individuals should be compensated for the cost of their injuries by the party responsible
What is sustainability?
Economic development that generates wealth and meets the needs of the current generation while preserving the environment and society so future generations can meet their needs as well
Describe business level strategies
The result of understanding competitive forces in the company's environment (Porter)
How can we evaluate cooperate social responsibility along a legal criteria?
Expected to fulfill their economic goals within the framework of legal requirements imposed by local town councils, state legislators & federal regulatory agencies
What does it mean to exploit core competencies?
Figure out what does the organization do well in comparison to competitors?
How does the pre-conventional level of moral development effect an individuals ethical decision making?
Follows rules to avoid punishment, acts in own interest, obedience for its own sake. (managers who use absolute form of leadership with employees oriented toward dependable accomplishment of specific tasks; task accomplishment)
What does it mean for an effective goal to cover key results area? (1 of the 5 characteristics of an effective goal)
Goals cannot be set for every aspect of employee behavior or organizational performance; numbers would be meaningless if they were
What does it mean for an effective goal to be specific and measurable? (1 of the 5 characteristics of an effective goal)
Goals should be expressed in quantitative terms when possible
What are divisional structures?
Group together people who work on a similar product, work in the same geographical region, or serve the same customers
Define the term planning
Incorporates both goals and plans; determines the organization's goals and defining the means of achieving them
Define Ethics
Is the code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong.
What does it mean to build synergy?
Joint effort to gain special advantage
Explain the moral rights approach for evaluating ethical behavior
Making decisions which maintain and protect the fundamental rights and privileges of people affected by the decision; positive b/c it protects an individual; makes decision based on "ethics" independent of consequences
Describe the role of a stockholder/ owner in an organization as well as how they are affected by an organizations decisions
Making money, shareholder return for investment, ROI; can be affected by false financial reports, breach of database control and organizations using confidential info.
What is ethical leadership?
Means that managers are honest and trustworthy, fair in their dealings with employees and customers, and behave ethically in both their professional and personal lives
Explain the utilitarian approach for evaluating ethical behavior
Moral behavior produces the greatest good for the greatest number; consider the effect of each alternative decision on all parties à select alternative which satisfies the greatest number of people à decision is based on outcome or consequences
How does the socialization process of compromise allow individuals to act unethically?
Newcomers "back into" unethical acts in an effort to resolve organizational dilemmas or role conflicts
How does the socialization process of incrementalism allow individuals to act unethically ?
Newcomers are gradually introduced to unethical acts
How does minimizing the consequences allow individuals to engage in unethical acts?
No one is harmed by the individual's acts so they are not really unethical o Individuals diminish the importance of the unethical acts by making selective social comparisons
What is the span on management?
Number of employees reporting to a supervisor - Traditional view = seven or so per manager - Today = 30 or more per manager - Generally, if supervisors must be closely involved with employees, span should be small (the bullets aren't that important)
When does forward vertical integration occur?
Occurs when a firm distributes its own outputs or products to lower distribution costs or ensure quality for customers
What is a standing plan?
On-going policies, rules and procedures for activities performed repeatedly - makes sense to have standing procedures Examples: UPS package deliver procedures; registration for classes
Explain what tactical goals (middle management) are
The results that major divisions and departments within the organization intend to achieve
How does the conventional level of moral development effect an individuals ethical decision making?
People learn to conform to the expectations of good behavior as defined by colleagues, family, friends and society; fulfills duties and obligations of social system. (work-group collaboration is the preferred manner of accomplishing organization goals; managers encourage interpersonal relationships and cooperation)
What is a project manager?
Person who is responsible for coordinating the activities of several departments for the completion of a specific project; not a member of one of the projects being coordinated
Describe and explain contingency planning
Planning for unexpected conditions -Identify important facts which may occur in environment - housing construction prepares for rise in interest rates -Develop plans for organization's response -Building scenarios - forecasting technique to look at current trends and visualize future possibilities
What is a single use plan?
Plans for developed goals which are unlikely to be repeated - to meet a unique situation Example: mergers of companies
How can we evaluate cooperate social responsibility along an economical criteria?
Produce goods and services that society wants and to maximize profits for its owners and shareholders (profit-maximizing view = profit oriented based organization)
What is a SWOT analysis?
Refers to INTERNAL strengths and weaknesses within an organisation and EXTERNAL opportunities and threats that may impact on an organisation. A SWOT analysis is used as part of STRATEGIC PLANNING so as to assist the organisation in achieving its objectives
Why do organizations need coordination across departments?
Refers to the managerial task of adjusting and synchronizing the diverse activities among different individuals and departments; is required regardless of whether the organization has a functional, divisional, or team structure
Define cooperate social responsibility
Refers to the obligation of organizational managers to make choices and take action that will enhance the welfare and interests of society, as well as the organization
Describe the role of managers in an organization as well as how they are affected by an organizations decisions
Responsible for seeing that the resources are used to serve the interests of stakeholders; today, a lot of focus from organizations is pleasing the shareholders which in turn neglects the customers & employees
How does the socialization process of co-optation allow individuals to act unethically?
Rewards are used to soften attitudes toward unethical behavior
What does it mean for an effective goal to be linked to rewards? (1 of the 5 characteristics of an effective goal)
The ultimate impact of goals depends on the extent to which salary increases, promotions and awards are based on goal achievement; employees pay attention to what gets noticed and rewarded
What does it mean for an effective goal to have a defined time period? (1 of the 5 characteristics of an effective goal)
Specifies the date on which goal attainment will be measured (setting deadlines to keep people on track)
Explain what operational goals (lower management) are
Specify the action steps toward achieving operational goals and support tactical activities; they are precise and measurable Ex. Operational goal for Trader Joe's product development is to identify ten new and intriguing items a week to phase into stores
Clear/defined mission =
Successful company
What is a task force?
Temporary team or committee designed to solve a problem involving several departments
Describe competitive advantage
The ability of a firm to win consistently over the long term in a competitive situation
Describe the relationship between law and ethics
The amount of explicit control is high in relation to ethics and codified law, in which values and standards are written into the legal system and enforceable in the courts. Law makers set rules that people and corporations must follow in a certain way like obtaining a driver's license (Walmart example of its vice chairman pleading guilty to fraud and tax evasion = behaviors that are obviously against the law)
What is work specialization?
The degree to which organizational tasks are subdivided into separate jobs; employees within each department perform only the tasks relevant to their specialized function
Describe the relationship between law and free choice
The domain of free choice is at the opposite end from codified law giving it a low amount of explicit control & pertains to behavior about which the law has no say and for which an individual or organization enjoys complete freedom (ex. a manager's choice of where to buy a suit, or an organization's choice of which of two well qualified candidates to hire for an open position)
Explain the concept of an organizational mission
Top of the goal hierarchy and organization's reason for existence; describes the organization's values, aspirations and reason for being
What is the chain of command?
Unbroken line of authority that links all persons in an organization and shows who reports to whom
According to porter what is focus? (1 of porters 3 competitive strategies)
Use either differentiation or cost leadership strategy with specifically targeted group
Describe the role of a community in an organization as well as how they are affected by an organizations decisions
Violating environmental standards, exposing public to safety risks, violating international human rights
Describe the role of a customer in an organization as well as how they are affected by an organizations decisions
Want fair value/price, number one stakeholder; can be affected by organization w/ false or deceptive sales practices and fabricating product quality data
When does backwards vertical integration occur?
When a firm creates value by producing its own inputs (supplies)
What does it mean for an effective goal to be challenging but realistic? (1 of the 5 characteristics of an effective goal)
When goals are unrealistic, they set employees up for failure and lead to decrease in employee morale; BUT, if goals are too easy, employees may not be motivated
How does displacing the responsibility allow individuals to engage in unethical acts?
individual perceives that they have no other choice than to participate in unethical acts
How does offering more justification allow individuals to engage in unethical acts?
individuals argue that ethics must be ignored to fulfill more important goals
How does de-humanizing the victim allow individuals to engage in unethical acts?
individuals argue that the injured party deserved whatever happened
What is the triple bottom line?
measures an organization's social, environmental and financial performance (3 Ps = people, profit, planet)
According to porter what is cost leadership and how does it help ones company? (1 of porters 3 competitive strategies)
produce product or service at lower cost -Reduce threat of substitute products, creates entry barriers -Customers and suppliers have less bargaining power (the bullets aren't key, just reference)
What are ethical structures and what are the three committee examples?
various systems, positions and programs undertaken to implement ethical behavior Ethics committee - a group of executives appointed to oversee company ethics; judiciary branch (academic honesty committee) Ethics training programs - help employees deal with ethical questions and translate the values stated in a code of ethics into everyday behavior Chief ethics officer - a company executive who oversees all aspects of ethics and legal compliance