Principles of Management Exam 2 (Chapter 5-8)

Credibility

"How believable is the information about the situation?"

Urgency

"How quickly must I act on the information about the situation?"

Importance

"how high priority is this situation?"

Porter's Five Competitive Forces

1. Threats of new entrants 2. Bargaining power of suppliers 3. Bargaining power of buyers 4. Threat of substitute products or services 5. Rivalry among competitors

Key attributes among analytics competitors

1. Use of modeling: going beyond simple descriptive statistics 2. Having multiple applications, not just one 3. Support from the top

The strategic-management process

1. establish the mission and vision 2. assess the current reality 3. formulate the grand strategy 4. implement the strategy 5. maintain strategic control

The company's CEO puts pressure on the firm's R&D managers to develop products that can be created cheaply. The firm would be following a ______ strategy:

A. Cost-leadership B. Differentiation C. Cost Focus D. Retrenchment

The United Way, a charitable Organization, is considered a _________ Organization.

A. For-profit B. Nonprofit C. Mutual-benefit D. May be any one of the above Answer:

XYZ Hospital has a Chief of Medical Services, a Director of Administrative Services, and a Director of Outpatient Services. XYZ has a _______ structure.

A. Functional B. Simple C. Divisional D. Matrix Answer:

Bill has been a manager for 14 years. He has seen many different situations with his employees. He often makes decisions without really thinking about them. This is called ________.

A. Intuition B. Satisficing C. Bounded Rationality D. Unbounded Rationality Answer:

John owns a piano sales and tuning store. He wants to be the biggest retailer in the Midlands. Adding salespeople would be part of his strategic ______.

A. Locution B. Execution C. Efficacy D. Efficiency Answer:

When analyzing the "W" in SWOT analysis, Roberta, the manager might be assessing:

A. Possible challenges in the market B. Competitors' actions C. High turnover of employees D. Good financial resources of the firm Answer:

In the Mary Kay Cosmetics Co., the best salespeople receive pink Cadillacs in special award ceremonies. This is an example of a :

A. Symbol B. Value C. Rite or Ritual D. Both A and C Answer:

Norma is trying to decide on a new contract for copier services. One of the salesman has an excellent bid, but Norma feels that there are things he is not telling her. Why does this make it had for her to use evidence-based decision making?

A. There's too much evidence B. There's not enough good evidence C. People are truing to mislead you D. The evidence doesn't quite apply Answer:

Rites and Rituals

Activities and ceremonies, planned and unplanned, that celebrate important occasions, and accomplishments in the organization's goals

Management Efficiencies

Administration spread over several business.

Symbol

An object, act, quality, or event that conveys meaning to others

Matrix Structure

An organization combines functional and divisional chains of command in a grid so that there are two command structures-vertical and horizontal.

Hierarchy Culture

Apt to have a formalized structured work environment aimed at achieving effectiveness through a variety of control mechanisms.

Division of Labor

Arrangement of having discrete parts of a task done by different people

Non rational models of decision making

Assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimal decision.

Strategic positioning

Attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. Performing different activities from rivals or performing similar activities in different ways.

Adhocracy Culture

Attempts to create innovative products by being adaptable, creative, and quick to respond to changes in the marketplace.

Internal strengths

Attention to detail and a frugality the shuns waste of every kind.

Ample structure

Authority is centralized in a single person with few rules and low work specialization

Reduced Risk

Because more than one product

Chapter 6

Chapter 6

Chapter 7

Chapter 7

Chapter 8

Chapter 8

Decision

Choice made from among available alternatives

Organizational weaknesses

Drawbacks that hinder an organization in executing strategies in pursuit of its mission.

Trend Analysis

Hypothetical but equally likely future conditions. Also called scenario planning and scenario analysis.

Centralized authority

Important decisions are made by higher-level managers

Decentralized Authority

Important decisions are made by middle-level and superior-level managers

Big Data

Includes not only data in corporate databases but also web-browsing data trails, social network communications, sensor data, and surveillance data

Clan Culture

Internal focus values flexibility rather than stability encourages collaboration among employees

Growth Strategy

Involves expansion - as in sales revenues, market share, number of employees, or number of customers

Stability

Involves little or no significant change

Defensive

Involves reduction in the organization's efforts retrenchment

Cost-Focus Strategy

Keep costs of a product below those of competitors and to target a narrow market.

Cost-leadership strategy

Keep the costs, and hence the prices, of a product or service below those of competitors and to target a wide market.

Intuition

Making a choice without the use of conscious though or logical inference. Sources are expertise and feelings

Accountability

Managers must report and justify work results to the managers above them.

Satisfying Model

Managers seek alternatives until they find one that is satisfactory, not optimal.

Competitive Intelligence

Means gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately. public prints and advertising, investor information, informal sources

Responsibility

Obligation you have to perform the tasks assigned to you.

Groupthink

Occurs when group members strive to agree for the sake of unanimity and this avoid accurately assessing the decision situation.

Consensus

Occurs when member are bale to express their opinions and reach agreement to support their final decision.

Focused-differentiation

Offer products that are of unique and superior value compared to those of competitors and to target a narrow market.

Differentiation Strategy

Offer products that are unique and superior value compared to those of competitors but to target a wide market.

Diversification

Operating several business in order to spread the risk related, unrelated

Virtual Organization

Organization whose members are geographically apart, usually working with e-mail, collaborative computing, and other computer connections.

Current Reality Assessment

Organizational assessment to look 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.

Internal weakness

Parts were supplied by outside companies rather than trusted traditional suppliers

Directive

People are efficient, logical, practical, and systematic in their approach to solving problems Action oriented, decisive, and like to focus on facts

Divisional Structure

People with diverse occupational specialties are put together in formal groups by similar products, customers or geographic regions.

Functional Structure

People with similar occupational specialties are put together in formal groups.

Hero

Person whose accomplishments embody the values of the organization

Level 1: Observable artifacts

Physical manifestations such as manner of dress, awards, myths and stories about the company visible behavior exhibited by managers and employees

Delegation

Process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy.

Strategy Formulation

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

Decision Making

Process of identifying and choosing alternative courses of action

Strategy implementation

Putting strategies into effect.

Span of Control

Refers to the number of people reporting directly to a given manger narrow, wide

Person-Organization Fit

Reflects the extent to which your personality and values match the climate and culture in an organization.

Enacted values

Represent tha values and norms actually exhibited in the organization.

Level 3: Basic Assumptions

Represent the core values of the organization's culture Those taken for granted and highly resistant to change

Authority

Rights inherent in a managerial position to make decisions and utilize resources.

Organizational strengths

Skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission.

Ethics Officer

Someone trained about matters of ethics in the workplace, particularly about resolving ethical dilemmas

Analytics

Sophisticated forms of business data analysis portfolio analysis, time-series forecast Also called business analytics

Rational Decision Making

Stage 1 - Identify the problem or opportunity Stage 2 - Think up alternative solutions Stage 3 - Evaluate alternatives & select a solution Stage 4 - Implement & evaluate the solution chosen

External opportunities

Stressed commitment to customers Still ranks high in quality

Bounded Rationality

Suggest that the ability of decision makers to be rational is limited by numerous constraints. complexit, time and money, cognitive capacity

Behavioral

Supportive, receptive to suggestions, show warmth prefer verbal to written information

Conceptual

Takes a broad perspective to problem solving likes to consider many options and future possibilities

Horizontal Design

Teams or workgroups, either temporary or permanent, are used to improve collaboration and work on shared tasks by breaking down internal boundaries.

Brainstorming

Technique used to help groups generate multiple ideas and alternatives for solving problems.

Differentiation

Tendency of the parts of an organization to disperse and fragment.

Integration

Tendency of the parts of an organization to draw together to achieve a common purpose.

Coordinated effort

The coordination of individual effort into group wide effort

Synergy

The economic value of separate, related business under one ownership and management is greater together than the business are worth separately.

Hallow Structure

The organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster.

Big Data Analytics

The process of examining large amounts of data of a variety of types to uncover hidden patterns, unknown correlations, and the useful information

Organizational Culture

The set of shared, taken-for granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments. Also called corporate culture

Common purpose

Unifies employees or members and gives everyone an understanding of the Organization's reason for being

Mutual-benefit Organization

Voluntary collectives whose purpose is to advance member's interests

Grand Strategy

Which after the assessment of the current reality, explains how the organization's mission is to be accomplished. Three common grand strategies are growth, stability, and defensive.

Story

narrative based on true events, which is repeated - and sometimes embellished upon - to emphasize a particular value

Decision-making style

reflects the combination of how an individual perceives and responds to information value orientation Tolerance for ambiguity

Building a foundation of Execution

-Know your people and your business -insist on realism -set clear goals and priorities -follow through -Reward the doers -expand the capabilities -know yourself

Disadvantages of Group Decision Making

-a few people dominate or intimidate -groupthink -satisficing -goal displacement

Advantages of Group Decision Making

-greater pool of knowledge -different perspectives -intellectual stimulation -better understanding of decision rationale -deeper commitment to the decision

Knowledge of your decision-making style:

-helps you understand yourself -can increase your ability to influence others -gives you an awareness of how people can take the same information and yet arrive at different decisions

What managers need to know about groups and decision making

-they are less efficient -their size affects decision quality -they may be too confident -knowledge counts

Common Decision-Making Biases

1. Availability 2. Representativeness 3. Confirmation 4. Sunk Cost 5. Anchoring an adjustment 6. Escalation of commitment 7. Hindsight 8. Framing 9. Escalation of Commitment

Three levels of Organizational Culture

1. Observable artifacts 2. Espoused Values 3. Basic Assumptions

The 3 key principles of strategic positioning.

1. Strategy is the creation of a unique & valuable position 2. Strategy requires trade-offs in competing 3. Strategy involves creating a "fit" among activities

Decision support system

A computer-based information system that provides a flexible tool for analysis and helps managers focus on the future business intelligence

Organizational Structure

A formal system of task and reporting relationships that coordinates and motivates an organization's members so that they can work together to achieve the organization's goals.

Decision Tree

A graph of decisions and their possible consequences Used to create a plan to reach a goal

BCG Matrix

A means of evaluating 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.

Organization

A system of consciously coordinated activities or forces of two or more people for profit, nonprofit, mutual-benefit

Bill is supportive of his employees and prefers to have viral conversations rather that written memos. His style is:

A. Analytical B. Behavioral C. Conceptual D. Directive Answer:

Organization chart

Box-and-lines illustration showing the formal lines of authority and the organization's official positions or work specializations

Environmental Scanning

Careful monitoring of an organization's internal and external environments to detect early signs of opportunities and threats that may influence the firm's plans.

Single-product strategy

Company makes and sells only one product within its market Benefit-focus Risk-vulnerability

Virtual Structure

Company outside a company that is created "specifically to respond to an exceptional market opportunity that is often temporary"

Strategy

Consider how success will be accomplished

Operations

Consider what path will be followed

people

Consider who will benefit you in the future

Analytical

Considers more information and alternatives

Strategic control

Consists of monitoring the execution of strategy and making adjustments if necessary.

Execution

Consists of using questioning, analysis, and follow-through in order to mesh strategy with reality, align people with goals, and achieve results promised. Central part of any company's strategy.

Hierarchy of Authority

Control mechanism for making sure the right people do the right things at the right time unity of command

Organizational Threats

Environmental factors that hinder an organization's achieving a competitive.

Organizational Opportunities

Environmental factors that the organization may exploit for competitive advantage.

Level 2: Espoused Values

Espoused values and enacted values

Rational Model of Decision Making

Explains how managers should make decisions Assumes managers will make logical decision that will be optimum in furthering the organization's best interests. Also called the classical model

Espoused Values

Explicitly states values and norms preferred by an organization

Modular Structure

Firm assembles product chunks, or modules, provided by outside contractors.

Market Culture

Focused on the external environment driven by competition and a strong desire to deliver results

For-profit Organization

Formed to make money, or profits, by offering products or services

Nonprofit Organization

Formed to offer services to some clients, not to make a profit