Man Exam 2
advantages of strategic planning
- Provide direction and momentum - Inspire new ideas - Cultivate a sustainable competitive advantage
Advantages of horizontal structure
- facilitate organizational learning, improve responsiveness to customers because they promote rapid communication and reduction of risk cycle times, enjoy the advantages of teamwork, including flexibility, empowerment, and broader perspectives
limitations of planning
-can create a false sense of certainty -may cause rigidity in a turbulent environment -can get in the way of intuition and creativity
benefits of planning
-provide a source of motivation and commitment -guide resource allocation -guide to action -set a standard of performance
Ways to ENCOURAGE innovation
1)Create a culture that celebrates failure, 2)devote the right amount of time, money, energy and focus to innovation 3) reward top performers
SHRM 7 steps
1. determine the mission/vision 2. determing grand strategy 3. develop strategic plans 4. determine what HR are needed 5. recruit/select indiv 6. engage in orientation, training, develop 7. appraise performance
performance management 4 steps
1. express performance expectations 2. monitor progress and evaluate outcomes 3. provide feedback and coaching 4. provide rewards or consequences
Planning Steps of the Planning/Control Cycle
1. make the plan 2. carry out the plan
7 behaviors of effective managers
1. personally/intensly engaged 2. realistic 3.few clear priorities/goals 4. emphasize accountability and follow-up 5. reward top performers more 6. develop talents 7. authentic, self-aware, humble, display self-mastery
disadvantages fo matrix structure
2 bosses- power struggle, conflict of interest 2 goals increase overhead and reduce efficiency use of teams- diffusion of accountability
perf management cycle can improve employee productivity by......, profitability by....., and raise engagement scores by ....., and reduce turnover
20% 48% 30%
Control Steps of the Planning/Control Cycle
3. control the direction by comparing results with the plan 4. control the direction by taking corrective action
2 popular appraisal types
360 degree assessments forced ranking performance review systems
performance appraisal method in which employees are appraised not only by their managerial supervisors but also by peers, subordinates, and even themselves
360-degree assessment
every .......... mnagers and subordinates should come together and compare objectives to actual performance (MBO)
6months to a year
Obligation to report and justify work results to higher ups
Accountability
Reintroduction of a familiar practice- least costly, least threatening least complex type of change
Adaptive change- example- longer holiday hours
External focus and values flexibility. Adaptivity, creativity, and flexibility in the face of change. Eg innovative companies, startups . Poor customer satisfaction, good operational efficiency, weak money success
Adhocracy culture
Kotter step that corresponds with Lewins refreezing change
Anchor new approaches in the culture
Founders values, the industry and business environment, the national culture and the senior management's vision and behavior
Antecedents of culture
The rights inherent in a managerial position to make decisions, give orders, and utilize resources are known as ____.
Authority
Managers use info that is readily available from memory to make judgements. Judge more recent info to be more accurate
Availability
9 biases
Availability, confirmation, representative, sunk cost, anchoring and adjustment, overconfidence, hindsight, framing, escalation of commitment
means of evaluating business units based on growth rate and market share
BCG Matrix
Invisible or preconscious core values that are meant to guide perception and behavior. taken for granted and hard to change.
Basic assumptions
Person with a .... style is people oriented and works well with others
Behavioral
This decision maker tried to avoid conflict, shows concern for others is receptive to suggestions and prefers info to be communicated in person rather than in writing
Behavioral
Managers realize they have lost, so they file bankruptcy or sell the company
Capitulation to irrelevance or death
Higher level managers make decisions in this type of authority
Centralized
The way in which an individual or organization moves from a current unsatisfactory to satisfactory desired state
Change
During this Lewin second stage of change, managers give employees the tools they need to change, including structure, culture and process
Changing
Culture with internal focus and values flexibility rather than stability. Values cohesion, job satisfaction, collaboration, employee development and commitment. Ex. Family business like duck dynasty . Less positive employee behavior, because they don't emphasize focusing on tasks. Work attitudes are high. Operational efficiency higher, less successful money wise. Higher customer satisfaction
Clan culture
7 Common elements of all organizations
Common purpose, coordinated effort, division of labor, hierarchy of authority, span of control, authority, centralization of authority
Framework of organizational cultures that compares culture based on two dimensions: whether they have an internal focus and promote integration or an external focus and promote differentiation; and whether they promote flexibility and discretion or stability and control
Competing values framework
Narrow spans of control- manger in charge of few employees
Complex or specialized tasks
A person with ... style takes a socially oriented humanistic and artistic approach to problem solving
Conceptual
This decision maker takes risks, develops creative solutions, enjoys new ideas, and relies on intuition and discussions with others
Conceptual
This decision makes tends to have a broad perspective, considering many options and focusing on the long term
Conceptual
Creation of a product or service that modifies an existing one. Ex. New technology in smartphone
Core innovation (incremental innovation)
John Kotters eight steps to organizational change to avoid errors
Create a sense of urgency, create a guiding coalition, develop a vision and strategy, communicate the change vision, empower broad-based action, generate short-term wins, consolidate gains and produce more change, anchor new approaches in the culture
The Kotter steps that correlate with Lewins unfreezing stage
Create a sense of urgency, create a guiding coalition, develop a vision and a strategy, and communicate the change vision
Collective beliefs, assumptions and general feelings about what is good, valuable, rational and normal in an organization.. Important for the ASA(attraction, selection, attrition) model of hiring new employees.
Cultural values
Decisions are made by middle level and supervisory- level managers to whom higher managers have delegated power
Decentralized authority
Mental shortcuts that can lead to faulty or ineffective decision making
Decision making biases
Manager can't find good solution and procrastinates, passes the bucket, or denies risk of any negative consequences. Negative because they involve a denial of responsibility
Defensive avoidance
Process of assigning responsibilities to lower rank employees
Delegation
Population is aging, increased diversity in the workforce
Demographic changes
Outside factors that force an organization to change
Demographic changes, changes in the market, technological advances, shareholder and customer demands , supplier practices and social and political pressures
Managers miss the warning signs and are unrealistic and slow to adapt
Denial of risk and peril
Wide spans of control
Easier for standardized tasks
Globalization impacts how work is being done, and other countries will work for lower wages, leading to fragmented supply chains and modular organizations
Effect of China and India
Causes of employee resistance to change
Employee characteristics (perceptions, individual differences, likely actions), change- agent characteristics (managers perceptions), change agent- employee relationship (trust essential)
The Kotter steps that correlate with Lewins changing stage
Empower broad based action, generate short term win, consolidate gains
Values and norms actually exhibited by the organization eg. Chick FilA still gives employees Sunday off even after founder died
Enacted Values
Explicitly stated values of an organization. Eg CHIKfilA values Sunday off for employees
Espoused values
Final stage of change- managers gather information about whether the change was successful
Feedback stage
Four qualities of a long term successful organization
Flexible, creative, adaptable and innovative
Ways to FOSTER innovation
Formulate an innovation strategy, gain commitment from top managers, foster an innovation- inspired company climate, construct the necessary organizational structure and process, acquire essential human capital, establish appropriate policies, procedures, and human resource practices, procure the resources needed
How to strengthen corporate culture
Founders and leaders rewards, stable workforce, stay in touch with mentors and influencers in the cultural network, use proper selection techniques to hire people and use socialization to familiarize new hires with values and expected behaviors.
Company's performance suffers and managers are looking for bold rescue strategies to pull them out
Grasping for salvation
Socialization, mentoring, decision making, group dynamics, communication, empowerment and leadership are types of organizational structure that affect
Group and social processes
report listing an org's employees, tracking each indiv's education, training, certifications, experiences
HR inventory
Behavioral example
Herb kelleher (Southwest)
Methods by which employees learn culture and it is reinforced
Heroes (Sam Walton, founder of WalMart); Stories (Southwest Air founder arm wrestled to win the ownership of a slogan); Rituals (ceremonies); Material symbols ( WalMarts no frills corporate headquarters waiting room is a symbol of the no frills ideals of the company)
Internal focus, values stability and control. Control mechanisms in place to ensure efficiency, effectiveness. Successful in a stable market. Bureaucracies, government agencies, McDonald's. Weak relationship to positive employee behavior, high levels of control over employees, boredom. Poor customer satisfaction, poor operational efficiency, make more money.
Hierarchical culture
Matrix vs Horizontal
Horizontal more efficient and flatly organized with cross- functional teams. Matrix structure merges employees from different divisions but retains a strict chain of command.
The company's success makes employees and managers overconfident and arrogant
Hubris born of success
Jim Collins five stages of institutional decline
Hubris born of success, undisciplined pursuit of more, denial of risk and peril, grasping for salvation, capitulation to irrelevance or death
Manager can decide to decide based on his determination of 3 things
Importance Credibility Urgency
What is the motivation for change
Improve an existing state- organizations anticipate and adjust to change to be successful
The basis for Product, process and market changes
Innovation
The process of coming up with new ideas and converting them into useful applications. Dr Archambeau emphasized that this is NOT INVENTION, which is creating something new. It must be useful. It is NOT CREATIVITY- which involves advancing new ideas into reality
Innovation
Introduction of a practice that is new to the organization but may be employed elsewhere in the industry medium threat, medium cost.
Innovative change- Ex. Electronic medical records
First step of systems approach to change- change impacts the planning process, including mission statement, vision statement, strategic plan and analysis of its change readiness why should we change?
Inputs stage -
the problem solving process
Intelligence design choice implementation monitoring
As computers and IT replace skilled workers, knowledge workers are becoming important
Knowledge as a competitive advantage
This type of manager has the authority to make decisions, have profit- loss responsibility, and have people report to him. Solid vertical line in the chart. Ex CEO, president
Line manager
idea is that lower-level employees qill be more committed to a goal if they are involved in setting it
MBO
proactive results-oriented appraoch that allows indiv at all levels of the org to collaborate and participate in goal-setting process
MBO
Strong external focus, driven by competition, values stability and control. Profits and productivity more important than job satisfaction and employee development. Ex. Amazon- data driven , focused on goal attainment. Higher customer satisfaction, good operational efficiency, more successful money wise.
Market culture
Voluntary collectives with the purpose of advancing their members' interests are known as ___.
Mutual benefit organizations
formed to offer services to some clients, not to make a profit
Nonprofit organizations
How to avoid IMPEDE innovation
Not implementing ideas, distinguish preventable from uncontrollable failures, avoid blaming employees for external sources of failure, not be reluctant to experiment, avoid self-serving bias
Physical manifestations of culture- ie, dress code, behavior of managers, office decor- visible, but often indecipherable
Observable artifacts
Three layers of organizational culture
Observable artifacts, values, and basic assumptions
A system of consciously coordinated activities or forces of two or more people is known as a(n)
Organization
Determined by the organizations structure, culture and Human Resource management system
Organizational Architecture
Establishment of optimal organizational structures tat will establish accountability and responsibility and ultimately help the firm achieve its strategy. Three types include traditional, horizontal, and open boundaries
Organizational Design
Combination of observable artifacts, espoused and enacted values, and basic assumptions of an organization
Organizational culture
A system of shared beliefs, conventions, norms, behaviors, expectations, and symbolic representations, the social glue that guides employee behavior- informal control mechanism
Organizational culture (Corporate culture) ex Uber run like a frat- sexual harassment, verbal abuse
All aspects of organizational culture result in THIS regarding levels of effectiveness, innovation and stress
Organizational outcomes
system of tasks, reporting relationships, and communication linkages that motivate members to work together. Managers decide division of labor, chain of command, and how workers coordinate with each other
Organizational structure
Organizational design and the reward systems in place
Organizational structure an practices
Two challenges facing managers in their organizing role
Organizational structure and culture
Third stage of the systems approach to change- once target elements identified, change can occur at the organizational level, the group level or the individual level, or all three. what do we want from the change?
Outputs stage-
Reaction in which manager is so frantic to get rid of problem that he can't deal with the situation realistically.
Panic
Common areas that need change
People, technology, structure, strategy
Key reasons employees resist change
Predisposed to avoid change, fearful of unknown, climate of mistrust, fear failure, afraid they will lose job security, influenced by peers resisting change, afraid the change will disrupt cultural traditions, personality conflicts, wrong timing, rewards not enough
Inside factors that drive organizational change
Problems with employees and behavior of managers
A change in the way a product or service is conceived, manufactured or disseminated. Ex. Internet has reshaped the way people consume media
Process innovation
A change in the appearance or performance of a product. Ex. New models of cameras that improve on the original model
Product innovation
Types of innovation
Product, process, core, transformational
Functions of an organizational culture
Provides organizational identity, facilitates collective commitment, promotes social system stability, provides direction
Employees are ranked by other employees and must defend themselves in order to keep their position . Ex Amazon
Purposeful Darwinism
Factor that is Not affected by type of organizational culture
Quality
Large organizations can't move fast enough to compete with more nimble companies, eg brick and mortar suffering from online shopping
Radical innovation is hurting traditional companies
Introduction of a practice new to the industry most costly, complex and uncertain type of change
Radically innovative change-
During this last stage of Lewin, the changed attitudes and behavior are integrated into employees normal way of doing things. Integrate change into standing plans and reward desired behaviors
Refreezing
manager realizes that complete inaction will have negative consequences but opts for the first available alternative that involves low risk. Satisficing
Relaxed change
A manager decides to take no action in the belief that there will be no great negative consequences. Complacency
Relaxes avoidance
Subordinates should recognize the managers authority to assign.....which is the obligation to perform assigned tasks.
Responsibility
Use innovation to jumpstart growth organically, restarting r&d, developing products in emerging countries and distributing globally
Reverse innovation
Current marketplace trends in organizational change
Segmentation and nice products, targeted products with shorter time to market, radical innovation that hurts traditional companies, effect of China and India, and knowledge as a competitive advantage
One trend is that organizations no longer cater to mass markets, offering a wide variety of products to more specific groups of customers
Segmentation and niche products
THIS involves two processes: learning process to establish an understanding of workplace dynamics, and adjustment process to fit in to the work roles, team norms and cultural values
Socialization
Provide advice, recommendations, and research to line managers. Dotted horizontal lines. Support personnel Ex. Legal counsel, HR
Staff personnel
Conceptual style example
Steve Jobs
How do managers develop proactive change?
Survey the external environment, gather competitive intelligence to anticipate trends
Second stage of systems approach to change- managers diagnose problems and generate solutions by considering the FOUR target elements or LEVERS for change: people, organizational arrangements, methods and social factors what levers can we pull to produce the change?
Target elements of change-
Companies are trying to beat competitors by being the first to market
Targeted products with shorter time to market
planning process loop 8 tasks
Task 1: vision, mission and Goals Task 2: opportunities and threats Task 3: strengths and weakness Task 4: strategies Task 5: strategic plan Task 6: tactical/operational plans Task 7: Control and diagnose results Task 8: Continue planning
This type of organizational design involves vertical management hierarchies and clear reporting relationships. Includes simple structure, functional structure, divisional structure and matrix structure
Traditional design
Creation of a product, service or technology that creates new markets of customers. Ex. MP3 music over LP records
Transformational innovation (radical innovation)
Companies overextend themselves and start to take major risks in areas they shouldn't
Undisciplined pursuit of more
Managers stir up motivation to change by encouraging workers to give up old ways of doing things in this first Lewin stage of change more radical change takes longer
Unfreezing -
framework for analyzing the competitive strategic potential of a resource or capability
VRIO
Collective attitudes and behaviors affected by social processes of a firms culture
Work attitudes, motivation, and job satisfaction
How to stand out at a new job and adapt quickly to a corporate culture
You only get one chance to make a first impression; come in early and stay late; get to know your coworkers; be open to feedback; and over-deliver
formulating the firm's strategic plan is a critical step in the planning process because it provides the org with ...
a basic game plan, the overall blueprint for how the org will achieve its goals
real-world decision makers often use ......... decision making appraoches
a combination of these
company acquires competetive adv id it can achieve
a fit among its core activities
3 most prevalent employment tests
ability performance personality
assesses the general physical, mental, clerical abilities of applicants
ability tests
barriers to entry include (10)
absolute cost advantages switching costs proprietary products or learning curve access to inputs & distribution brand identity capital req govt policy economies of scale technology expected retaliation
cost-leadership requires a business to have (6)
access to capital, process engineering skills, tight cost controls, job specialization, frequent reports, incentives for reaching quantitative goals
segments customers who are accessible in different ays rather than on actual differences between them
access-based
set objective jointly- a back and forth negotiation will ensure that gals are .... yet ....
achievable yet challengin
diversification achieved through (3)
acquisitions and mergers joint ventures and strategic alliances internal development
operating pan should escribe the company's .... and the ..... objectives of each activity
activities short-term
nonrational models of decision making explain how managers, who do nto have full knowledge of the environment and future outcomes,
actually make decisions
discrimination- employement practice or procedure negatively affects a protected class of indiv
adverse impact
achieving equality of opportunity within an org
affirmative action
restricts mandatory retirement and prohibits age discr
age discrimination in employment act
virtual structure adv
allows a firm to tap into different knowledge pools and talent pools without geographic barriers; lower fixed costs due to no rent; less time and money need for travel because of multiple locations.
prohbits discr based on disability and requires employer to make reasonable accomodations
americans with disabilities act
growth rate deals with how fast ..... is growing while market share is concerned with .....'s share of the market related to competitors shares
an entire industry a unit's
a person with a.... style carefully considers a lot of information and alternatives, which means that it takes him or her longer to make the decision.
analytical
this kind of decision maker responds well to new situation and is more willing to be innovative
analytical
the tendency to make decisions based on an initial figure
anchoring and adjustment
involuntary emotional response to a situation, opporunity, object or person that can also drive intuition
automated experience
3 selection tools
background information, interviewing, and employment tests
4 guiding principles for MBO
be on the same page goal attainment more likely when emphasis is on results on a time scale more motivated when they participate in meaningful work and held accountable for results can't measure progress if don't set the goal
satisficing model is a .... model
behavioral
exploration into what applicants have actually done in the past
behavioral-description interview
rates employee performance according to scales o specific behaviors
behaviorally anchored rating scale
prcoess of a company evaluating its own performance based on how it compares with the performance of high-performing org
benchmarking
focus should no be on who is currently in the position but who will ....
benefit the firm in the future
bcg matrix developed by
boston consulting group
advantages of MBO
bottom up and top down goal setting more committed, buy in to strategy of company focuses on steps needed to achieve broad org goals
Fluid, highly adaptable organization whose members , linked by IT, come together to collaborate on common tasks; includes competitions, suppliers, and customers. Includes hollow, modular and virtual structures.
boundaryless org
ability of decision makers to be rational is limited by numerous constraints
bounded rationality
differentiation requires marketing to emphasize.... (5)
branding product engineering product R&D strong coordination incentives for reaching qual goals
access based positionign is used to serve the
broad needs of many customers
describes firm;s position, operations, competitive advantage, marketing strategy, method of financing, expected revenues and expenses
business model
outline of how an org will deliver its value proposition
business model
blueprint for action that details how an org is going to realize its goals through its strategic plands and its operating plans
business plan
written doc that defines the firms objectives strategy and measures of success
business plan
managers should ..... questions marks to determine if they will grow inrto stars or diminish into dogs
carefully analyze
structuring objectives in a unified hierarchy becoming more specific at lower levels in the org.
cascading objectives
eventually this market will mature and revenue stream will dry up
cash cow
low growth but high market share . Finance stars and question marks
cash cows
in rational model the problem is known and criteria to evaluate alternatives are known and managers consciously strive for
certainty and to achieve the maximum benefit
reasons for planning
check progress coordinate activities forward-thinking deal with uncertainty
in the .... step the decision maker has to pick the most viable course of action
choice
strengthens civil rights act of 1964 by increasing damages and dhifting burden of proof to employer
civil rights act of 1991
negotiations between management and employees about disputes over copensation, benefits, woring conditions, and job security
collective bargaining
3 things to have in place for MBO to be a succes
commitment of top management organization-wide commitment cascading objectives
5 tools to convert org's vision into a grand strategy
competitve intelligence swot analysis forecasting benchmarking porter's model for industry analysis
intuition is NOT a substitute for rational decision making- it is a
complement
the ..... of modern life requires us to make more decisions than ever
complexity
when a person seeks information that supports his point of view and discounts data that do not
confirmation bias
allows employees to retain their health insurance coverage for a period of time after being laid off
consolidated omnibus budget reconciliation act (COBRA)
Creation of alternative hypothetical but equally likely future conditions is called
contingency planning (scenario planning)
managers make decisions about when and how much to control organizational activities, what deviation from the goal is "significant", and what kind of management info system the org should use
controlling
....-level strategy designates what markets or industries a firm will compete in, while .... level strategy designates how a firm will be successful in each of its markets
corporate business
2 ways to take corrective action (plan/control cycle)
correcting deviations in current plan improving future pans and returning to first step in cycle
.... strategy is used to keep the costs, an hence the prices, o a product or service below those of competitors an to target a wide market . focus on efficiency of process
cost-leadership
porter's 3 underlying principles of strategic planning
creating a unique and valuable position competitve trade-offs creation of a fit among activities
porter- best way of thinking about copetition is by focusing strategy on
creating a unique org
internal staffing involves filling positions with
current employees
people with greater knowledge and expertise often find it difficult to see things from a less-informed person's point of view
curse of knowledge
a manager agrees that he or she must decide what to do about a problem or opportunity and take effective decision-making steps
deciding to decide
choice made from available alternatives
decision
process of identifying problems or opportunities and choosing appropriate courses of action for resolving them
decision making
reflects how an individual perceives and responds to info
decision making style
drawbacks- perfectly rational decision making is almost impossible in the real world, due to a number of hindrances
decisions are too complex time/money constraints prevent gathering all relevant info before deciding different cognitive capacities, values, skills- impossible to make same objective decision even with same info face risk, uncertainty, imperfect info, and info overload face conflicting goals, have to placate org stakeholders with different priorities
grand strategy that involves a reduction of the org's efforts
defensive
strategic planning 5 steps
define/clarify mission/objectives assess environ for threats/opportunities assess internal strengths/weaknessess consider alternative strategies using compet analysis choose a strategy
in the ... step the decision maker has to think about the various courses of action
design
porter- competition is not about being the best, the best leads to
destructive competition
strategic management process involve managers from all parts of the org in carrying out these 5 steps
determine mission, vision, values statement examine current reality by assessing environment devise grand strategy, strategic, tactical, operational plans execute strategy by following plans evaluate plans and alter
educating professionals and managers in the skills they need to do their jobs in the future
development
needs-based works best when groups of customers have .... needs, and a narrowly tailored set of activities cna best serve those needs
different
.... strategy tends to lead to a higher price point than competitors but customers are willing to pay more for more perceived value
differentiation
....strategy is used to offer products or services that are of unique and superior value compared to those of competitors and to target a wide market
differentiation
a firm can mitigate the negative impacts of competition by .....
differntiating itself from the competition
virtual structure disavantages
difficult to have behavioral norms or a strong culture.
Disadvantages of horizontal structure
difficulty separating the organization's activities into "process" and "no process" , it could lead to Cinderella problem- non-process individuals feel left out, emphasis on the cross-functional team can get in the way of functional specialization, managers may perceive a loss of turf and try to inhibit horizontal collaborations.
a person with a ... style is efficient, practical, systematic, action-oriented, and decisive
directive
this decision maker largely focuses on facts, prefers clear-cut solutions, is concerned about the short run, and exercises power and control
directive
this decision maker makes quick decisions without considering any alternatives, and generally relies on existing rules
directive
discrimination- org intentionally treat indiv from protected groups differently
disparate treatment
company operates several businesses to spread out risk
diversification strategy
firms should....... from dog markets
divest (eliminate)
advantages of divisional structure
divisional groupings make greater focus possible coordination is built into structure allocate resources to approp divisions in most attractive markets clear accountability
MBO Cascading obj- Org objectives are the broadest and are translated into .... then....then
divisional objectives, then departmental, then individual
people with diverse occupational specialties are put together in formal groups by similar products, customers or geographic regions
divisional structure
have low groth and market share
dogs
4 building blocks of competitive advantage
efficiency, quality, innovation, responsiveness to customers
impulsive and largely unconscious, guided by habits and intuition
emotional (nonrational)
decision makign in the real world is difficult because 2 competing models for decision making
emotional (nonrational) rational
managers perform a job analysis, write a job desription, and write a job specification to determine current .....
employee needs
consist of any proceure used in the employment selection decision process
employment test
to keep a strategic plan on track
engage people, keep it simple, stay focused, keep moving
established by Title VII of civil rights act, enforces antidiscrimination and other employment-related laws
equal employment opportunity commission
prohibits employers from paying males and females differently for substantially equal work
equal pay act
increases his commitment to a project, spending more time and effort on it despite negative info about the probable outcome
escalation of commitment bias
using questionin analysis and follow through to mesh strategy with reality, align people with goals, and achieve promised results
execuftion
explicit and tacit knowledge regarding a given situation, decision opportunity, object, or person
expertise
havign a strategy helps managers determine how to
exploit core competencies deliver value to customers build synergy in org operations
A good strategic plan gives an assessnent of
external environ how much managers understand existing markets how to cultivate business
banned child labor and established min living standards for workers engaged in interstate commerce. including the establishment of a max workweek and a federal min wage
fair labor stanards act
requires companies to provide up to 12 weeks of unpaid leave for adoption, family emergenices, or childbirth
family and medical leave act
strategic control- managers use a ...... to reformulate plans, rethink policies, and take corrective action
feedback loop
The benefit of a Single-Product Strategy:
focus on 1 product
Formed to make money, or profits, by offering products or services
for-profit organizations
appraisal involves a ranking of all employees in a business unit against one another and the distribution of scores along some sort of bell curve
forced ranking perf review system
vision or projection of the future used to determine strategies going forward
forecasr
.... appraisals are conducted at specific times throughout the year and are basd on perf measures ha have been established in advance
formal
unduly influenced by the way a problem or situation is presented
framing bias
structure in which people with similar occupational specialties are put together in formal groups. focused on efficiency and is best for small firms or firms with programmatic focus
functional structure
specific commitments to achieve a measurable result within a stated period of time
goals
rational model assumptions
goals are well-established, problem is well-defined and unambiguous decision maker is rational and uses logic no time/cost constraint operates in environment of perfect info/certainty knows all criteria for evaluating alternatives preferences are clear, constant, stable knows consequences of all alternatives final choice maximizes benefit of firm
how the org will accomplish its mission
grand strategy
grand strategy that involves expansion (sales rev, market share, # of employees, # of clients served)
growth
3 grand strategies
growth, stability, defensive
- central core of the organization is complemented by outside independent firms that provide outsourced goods and services and are linked to the central core via computers. Also called a network structure. Uses a lot of IT. Ex. Ike, Reebok, Visio.
hallow structure
informal appraisals are beneficial
happen more regularly- prevent surprises provide support receive feedback and adjust goals
disadvantages of functional structure
hard to communicate between functional groups focused on success for unit, lose sight of org overall goals breakdown of processes across functions
prohibits group plans from dropping sick employees and allows worjers to get new coverage when they change jobs
health insurance portability accountability act
a person with.... tolerance for ambiguity is comfortable with ambiguity and lack of control, and is able to thrive in uncertain situations
high
sources that influence supplier bargainin g power (5)
high switching cost for buyer buyer need of specialty product differentiation of inputs threat of forward integration importance of volume and cost relative to total industry purchases
view past events as more predictable than they really were. decisions usually seem easier and clearer in hindsight
hindsight bias
when a person bases a decision on his or her expertise
holistic hunch
use of temporary or permanent teams o break down internal boundaries and improve collaboration
horizontal design
sexual harrassment- intimidating or offensive work environment is created
hostile environ
nonrational model assumes that managers are
human beings making decisions in a risky or uncertain environment
The economic or productive potential of employee knowledge and actions is called
human capital
The activities managers perform to plan for, attract, develop and retain an effective workforce are called
human resource management
operational efficiency (is or is not) sufficient to be the sole driver of a company's decision making
id not
4 steps in rational decision making process
identify problem or opportunity generate alternatives evaluate alternatives/pick 1 with max benefit implement solution and evaluate it
implementation process 3 steps
implement strategy through structure, system, operational processes set up control and eval systems feedback to planning
once the decision is made it must be... and then ... to see how well it worked
implemented monitored
3 types of objectives in MBO
improvement personal development maintenance
define the performance level that is to be accomplished for a specific area in a specific way
improvement objectives
....appraisals are conducted on an unscheduled basis and consist of less rigorous assessmens of employee performance
informal
understanding that real world decision makers often satisfice allows you to better understan the .... that mangers face
inherent biases and limitations
firm must constantly....
innovate
in the .... step a decision maker has to collect info about the problem
intelligence
decision making steps in problem solving process
intelligence design choice
makes sure company gets all added value of a new product but is time consuming and may be liited to a firm's lack o knowledge or capabilities
internal development
swot internal and external factors
internal- strengths and weaknesses external- opportunities and threats
decision makers make decisions based on gut feelings, subconsciously influenced by experiences, values, emotions
intuition
making a choice without the use of conscious thought or logical inference
intuition
stars can become cash cows and managers should .... to achieve more growth
invest
used to determine, by observation and analysis, the basic elements of a job
job analysis
summarizes what the holder of the job does and how and why
job description
orientation gives info about
job routine mission and operations work rules and benefits legal environment
describes the minimum qualifications a person must have to perform the job successfully
job specification
allow companies to enter new markets more quickly and without a large investment, but involve sharing rewards and require trust
joint ventures and strategic alliances
mental shortcuts managers use because they face constraints that prevent them from making perfectly rational decisions
judgemental heuristics
directive decision maker example
ken kutaragi (playstation)
people whose work's main function or concern involves generating or interpreting info rather than manual labor
knowledge workers
managers make decisions about how to lead, motivate employees, stimulate productive conflict and maximize employee productivity
leading
firms must operate within the various constraints of the HRM environmen
legislation societal trends changing technology
rational model assumes that managers are
logical decision makers who strive to ake the optimal decision and always act in organization's best interest
a person with .... tolerance for ambiguity needds a high degree of structure and control in his or her life and decisions, and thus tends to find ambiguous situations stressful
low
to keep employees with the right human capital and those who the org has invested in training, an org should strive to have .... turnover
low
adv hallow structure
lower costs, lower overhead lower capital expense; firm can pursue best source of specialization from suppliers; suppliers respond to market forces with lower cost and better quality; firm can lower costs making it more competitive; can easily change production process by switching suppliers.
show intent to keep performance at levels that were previously established
maintenance objectives
as a result of assumptions of nonrational model, managers often find it difficult to
make optimal decision
Adv. of Matrix Structure
manage multiple dimensions communication built into system- flexibility use employees for projects + traditional functional work
process with the purpose of motivating subordinates to achieve org goals
management by objectives
employees report to 2 bosses- functional manager and project manager
matrix structure
structure that combines functional and divisional chains of command in a grid so that there are 2 command structures- vertical and horizontal
matrix structure
the hierarchy of organizational goals constitutes the .... that lead to the accomplishment of the ...-- higher level goals
means ends
allow a company to quickly expand its reach and enter a new market while still mainting management control. Expensive and requires integrating 2 company cultures
mergers and acquisitions
world's leading expert on competitve strategy
michael porter
managers should.... cash cows
milk- not investing very heavily in r&d
organization's goals are shaped by its... .... and ... (3)
mission vision values
planning process 6 steps
mission statemnt vision statement values statement strategic planning operational planning
organizations reason for operating
missionsstatement
- a structure in which a firm establishes product chunks, or modules, - provided by outside contractors. The "hollowest of hollow" structures. EVERYTHING is OUTSOURCED - Seen in medical field. Doctor's office outsources labs. Boeing tried to use structure when building Dreamliner-the pieces didn't fit together though!
modular structure
enforces procedures whereby employees may vote to have a union and for collective bargaining
national labor relations board
nonrational models assume that decision making is .... making it difficult for managers to
nearly always uncertain and risky make optimal decisions
training questions to ask
necessary? objective? what method is most likely to achieve obj? how to implement? is it working?
attempts to serve most or all needs of a particular group of customers
needs based
succesfful compnies regularly reconfigure their assets and capabilities to ensure resources are being used to best take advantage of ..... or to minimize ....
new opportunities threats
modular structure - Disadvantages:
not all products can be "chunked"; different modules might not fit together; entire process only as fast as the slowest supplier.
appraisals are either ... or...
objective subjective
(rational model) when these assumptions are met the decision maker can ..... and .....
objectively evaluate each alternative choose the alternative with the maximum benefit
sets mandatory health and safety standards to which organizations must adhere
occupational safety and health act
strategic planning is ..... of the overall process of the planning function
only part
planning by frist line managers for periods of 1-52 weeks
operatinoal planning
the firm must treat....... as a given; strategic success is impossible without it
operational effectiveness
..... is performing tasks better than you competiios, while ..... is a plan for effectively competing in the market
operational efficiency strategy
set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals
operational goals
environmental factors hat he org may exploit for competitive adv
opportunities
managers make decisions about the chain of command, degree of centralization, job deisgn, org structure
organizing
disadv hollow structure
outsource firms may end up being competitors.
the benefit of being able to use satisficing to make quick decisions often ..... the benefit that would result from the perfect decision
outweighs
occurs when people have more subjective confidence in their decision making than their objective accuracy. blind to their own blindness and are more confident than they should be
overconfidence
requires firms with 50 or more employees to provide health care coverage without a govt subsidy or face a fine
patient protection and afordable care act
HR should be involved in every aspect of business meetings. organizations need the right .... to be effective and efficient
people
3core processes of execution
people strategy operations
FOUR target elements or LEVERS for change:
people, organizational arrangements, methods social factors
assessing an employee's performance and providing the employee ith feedback
performance appraisal
continuous cycle of improving job performance through goal setting, feedback and coaching, and rewards and positive enforcement
performance management
making products that have targets that are defined in similar performance variables
performance management
assesses the applicant's performance on actual job tasks
performance tests
define the personal goals that are to be fulilled
personal development objectives
measures personality traits, like need for achievement, eergy, emotional intelligence, ability to be a team player, sociability
personality tests
managers make decisions about the firm's objectives, strategies, and goals
planning
setting goals and deciding how to achieve them
planning
continuous feedback loop for each level of planning
planning/control cycle
outlines general response to a designated problem or situation
policy
once the ..... has been established, you can start seeking out the .... necessary to create and avantage, finally, you must efficiently .... these resources so that you can deliver your product or service
position resources organize
Managers should be ............- planned change in anticipation of possible threats, rather than .........- change in response to a crisis
proactive vs Reactive change
outlines response o a particular problem or cicumstance
procedure
encompasses a range of projects or activities
program
single use plan that encompasses a smaller range of tasks or activities than a program
project
3 reasons strategic management is important
provide direction and momentum encourage new ideas help develop a sustainable competitive adv
new ventures with a high market groth rate but low market share
question mark
(satisficing) these commonly accepted guidlines or procedures for finding a "good" solution make decision making ....... but they can also lead to .... decisions made on a case by case basis
quicker and less costly suboptimal or inconsistent decisions
sexual harrassment- tangible economic injury
quid pro quo
..... model is a good starting point for understanding how decisions should be made in a perfectly logical, unemotional world
rational decision making
analytical but slow to act
rational decision making
... diversification occurs when an org operates, under one ownership, several separate business that are related to one another
related
Organizational architecture establishes
relationships among employees, formal reporting relationships, standing plan(long term plan not expected to change)
4 ineffective reactions to a decision situation
relaxed avoidance, relaxed change, defensive avoidance, panic
2 legal considerations for employment tests
reliability validity
tendency to generalize from a small sample or a single event
representative
making products that involve the same type of management, capital investment, production or similar sources of risk
resource allocation
3 corp management taks that influence a related diversification decision
resource allocation strategy formulation performance management
designating specific required action
rule
explains that managers seek alternatives until they find one that is satisfactory, not optimal
satisficing
first proposed by herbert simon who believed that managers 'ability to act logically was bound by many restictions such as complexity, time and money constraints, imperfect info, info overload, conflicting goals, and differences in terms of cognitive capacity
satisficing
major non rational models
satisficing intuition
Kotter Eight steps must be handled ........ for the change to be most effective
sequentially
2 approaches to needs-based positionin
serving the broad needs of a few customers serving the differing needs of similar customers
4 steps in MBO process
set objectives jointly develop an action plan review performance periodically appraise performance and give rewards
swot is useful becaus eit helps managers
set realistic goals improve their capabilities in probelm areas establish plans to overcome weaknesses exploit strengths turn threats into opportunities
most important in developing an actio plan- MBO
setting a time scale
rational model (classical model) explains how managers....
should make decisions
structure with centralized authority, a flat hierarchy, few rules, and low work specialization. firms in their earliest stages tend to use this
simple structure
3 approaches to operational planning
single use standing management by objectives
corporate-level strategy- company can choose either ....strategy or .....strategy
single-product diversification
a company makes and sells only one product within its market
single-product strategy
plans develope for activities that are not likely to be repeated in the future. includes projects and programs
single-use plans
2 types of structured interviews
situational and behavioral
interviewer uses hypothetical situations to test the cnadidate's ability to do the job and to operate under pressure
situational interview
The economic or productive potential of strong, trusting, and cooperative relationships
social capital
- modular structure Advantages:
speeds up production and lowers cost; firm can gain from other company's competencies; shop for the best supplier; experiment by combining modules in different ways.
grand strategy that involves little or no sig change
stability
plans developed for activities that occur repeatedly over a period of time. includes rules, procedures, and policies and allows for consistency and efficiency
standing plans
high growth industry and have high market share
stars
a firm's growtg prosperity or failure depends on .... made by top managers
strategic and financial decisions
consists of monitoring the execution of strategy and making adjustments, if necessary
strategic control
set by ad for top maagegement and focus on objectives for the org as a whole
strategic goals
process by which managers design the components of a HRM system to be consistent with each other, with other elements of org architecture, and with org's strategy and goals
strategic human reource management
consists of feveloping a systematic, comprehensive strategy for understanding current employee needs and predicting future employee needs
strategic human resource planning
5 step process for formulating and implementing strategies
strategic management
process that involves managers from all parts of the org in the formulation and implementation of strategies and strategic goals. should involve middle managers
strategic management
top managers formulate longterm plans with knowledge that the environment is ever changing and increasingly competitive
strategic plannign
planning by top mnagers for periods of 1-5 years
strategic planning
2 main stages of strategic formulation process
strategic planning implementation
swot analysis
strategic planning tool that involves the search for strengths, weaknesses, opportunities, and threats affecting the org
"performing different activities from rivals, or performing similar activities in different ways"
strategic positioning
attempts to achieve sustainable competitve adv by preserving what is distinctive about a company
strategic positioning
a large-scale action plan that sets the direction for an organization
strategy
making products that have similar key success factors, are in similar stages of the industry life cycle, or occupy similar competitve positions
strategy formulation
putting strategic plans into effect
strategy implementation
internal skills and capabilities that give the org special competencies and competitve adv in executing strategies in pursuit of its mission
strengths
asking each applicant the same questions and comparing their responses to a standardized set of answers
structured interviews
managers add up all the money already spent on a project and conclude that it would be too costly to simply abandon it
sunk cost
vertical integration should leverage a firm's competitive advantage and create .... whenever possible
synergies
diversification is only beneficial when 2 companies can achieve....
synergy
total effect is more than ech could achieve on its own
synergy
set by and for middle managers and focus on actions needed to achieve strategic goals
tactical goals
planning by middle managers for periods of 6-24 months
tactical planing
strategy will impact ..... as well as ....
the market competitors' strategies
operations strategy is put in place to ensure that all tasks a company performs are
the right tasks
Porter's 5 forces of competition
threat of new entry suppliers bargaining power buyers bargaining power threats of substitute products competitive rivalry
environmental factors that hinder an org achievement of a competitive adv
threats
disadvantages of planning
time consuming plans go obsolete quickly
disadvantages mbo
time-consuming managers have stronger negotiating position because of authority
prohibits discr based on race, color, sex, religion, national origin
title vii of civil rights act
educating technical and operational employees in how to better do their current jobs
training
hypothetical extension of a past series of events into the future
trend analysis
2 kinds of forecasting
trend analysis contingency planning
Kurt Lewin's three stages of change
unfreezing, changing, refreezing
matrix structure violates the traditional concept of .........principle that states that an employee should report to no more than one manager, to avoid inconsistent priorities or conflicting demands
unity of command
disadvantage of a divisional structure
unnecessary an costly functional duplication loss of control- different approaches hard to maintain unified identity and org culture
....diversification occurs when an org, under one ownership, operates several unrelated businesses
unrelated
2kinds of diversification strategies
unrelated related
asking probing questions to find out what the appklicant is like
unstructured interviews
having a strategy matters in effectively ..... and determing where to invest....
utilizing resources time and effort
VRIO 4 questions
value rarity imitability organization
whether a person focuses on people and social concerns or task and technical concerns when faced with making decisions
value orientation
4 basic styles of decision making which vary along 2 dimensions-
value orientation and tolerance for ambiguity
values the org wants to emphasize
values statement
produces a subset of an industry's products or services
variety based
3 ways to create unique and valuable position in minds of customers
variety based positioning needs-based access-based
when a firm expands into the industries that provide supplies usedin producing its products, or into the industries that distribute and sell itsproducts
vertical integration
- a structure in which the firm creates a company outside a company specifically to respond to an attractive and often temporary market opportunity. Must create a virtual organization, an organization whose members are geographically separated usually working through email. Often make use of independent contractors. Ex. Automattic Inc- web developer with corporate office just the homes of its 123 employees, located all over the world.
virtual structure
several activities reinforce one another
virtuous circle
key element of successful strategy execution
visible leadership
tools to improve strategic xecution
visible leadership clear roles and accountability candid communication appropriate HR practices
what the organization envisions itself becoming
vision statement
prohibits discr based on mental or physical disability
vocational rehabilitation act
The risk of a Single-Product Strategy:
vulnerability- any problem within industry can put entire business in jeopardy
analytical decision maker example
warren buffet
internal drawbacks that hinder an org in executing strategies in pursuit of its mission
weaknesses
advantages of functional structure
working in same functional area learn from one another managers easily monitor managers more easily achieve success only responsible for one function
