Management 2
List the six steps in the strategic management process (for NFP)
1. Identifying the Organization's Current Mission, Objectives, and Strategies. 2. External Analysis. 3: Internal Analysis. Should lead to a clear assessment of the organization's resources and capabilities. 4: Formulating Strategies. 5: Implementing Strategies. 6: Evaluating Results.
Discuss the BCG Matrix and how it is used
2x2 Stars: high market share/high anticipated growth Cash Cows: high market share/low growth Question marks: low market share/high anticipated growth Dogs: low market share/low growth -Used for understanding diverse businesses and helps managers establish priorities for allocating resources
Contrast the three decision-making conditions
Certainty: a situation where a manager can make accurate decisions because the outcome of every alternative is known Risk: conditions in which the decision maker is able to estimate the likelihood of certain outcomes. Managers have historical data from past personal experiences or secondary information that lets them assign probabilities to different alternatives. Uncertainty: manager has neither certainty nor reasonable probability estimates available
Understand the different growth strategies
Concentration: focuses on the primary line of business and increases the number of products offered or markets served in primary business Vertical Integration: backward integration is when the organization becomes it's own supplier so it can control inputs. Forward is when the org. becomes its own distributor is controls outputs. Horizontal Integration: grows by combining with other competitors Diversification: Related happens when a company combines with other companies in different but related industries. Unrelated company combines with firms in different and unrelated industries.
Explain the three levels of organizational strategy
Corporate: what businesses a company is in or wants to be in and what it wants to do with those business Competitive: how an organization will compete in its business Functional: used by an organizations various functional departments to support completive strategy
Explain the criticisms of planning and whether or not they're valid
Creates rigidity Dynamic environment Can't replace creativity Focus is on today's success, not tomorrow's success Planning isn't enough; The organization must AC -Doesn't have to be this way. Goals are clearly defined forms network of goals
Describe how managers can effectively plan in today's dynamic environment
Develop plans that are specific but flexible Be ready to change directions if environmental conditions warrant Stay alert to environmental changes that may impact implementation and respond as needed Make the organizational hierarchy flatter to effectively plan in dynamic environments
List the six characteristics of an effective decision-making process
Focuses on what is important It is logical and consistent It acknowledges both subjective and objective thinking and blends analytical with intuitive thinking It requires only as much information and analysis as is necessary to resolve a particular dilemma It encourages and guides the gathering of relevant information and informed opinion It is straightforward, reliable, easy to use, and flexible
Describe the approaches to planning
Formal planning department: group of planning specialists whose sole responsibility is to help write the various organizational plans.
Define goals and plans
Goals (objectives) are desired outcomes or targets. Guide management decisions and form the criterion against which work results are measured Plans are documents that outline how goals are going to be met. They usually include resource allocation, schedules, and other actions to accomplish goals
Discuss how traditional goal setting works
Goals set by managers flow down through the organization and become sub goals for each organizational area. top managers know what is best because they see the big picture. Goals are passed down then performance is evaluated to determine whether the assigned goals have been achieved
Define decision and the decision-making process
Identify a problem Identify decision criteria: relevant to resolving a problem Allocate weights to the Criteria: weight to give correct priority Develop Alternatives Analyze Alternatives Select an Alternative Implement the Alternative Evaluate Decision Effectiveness
Describe the types of goals organizations might have
Increase market share Keep employees enthused about working for the organization Work toward more environmentally sustainable practices Financial goals Strategic goals: related to all areas of organizations performance Stated goals: official statements of what an organization says and what it wants its stakeholders to believe Real Goals: goals organization actually pursues
Explain why it's important to know an organization's stated and real goals
Knowing real and stated goals may differ is important for recognizing what you might otherwise think are inconsistences
Decision making styles
Linear is when you use external data and facts and processing the information through rational, logical thinking to guide decisions and actions Non-linear: preference for internal sources of information like feelings and intuition and process with internal insights, feelings, and hunches to guide decisions.
Explain what intuition is and how it affects decision making
Making decisions on the basis of experience, feelings, and accumulated judgment. Experience-based, affect-initiated decisions (feelings or emotions), cognitive based (based on skills, knowledge, and training), subconscious mental processing (use data form subconscious mind to help make decisions), values or ethics based
Describe what managers do when they do external and internal analysis
Managers in every organization need to do an external analysis. Factors such as competition, pending legislation, and labor supply could have an impact. 2. After analyzing the environment, managers need to assess what they have learned in terms of opportunities and threats. Opportunities are positive trends in external environmental factors; threats are negative trends. 3. The same environment can present opportunities to one organization and pose threats to another in the same industry because of different resources and capabilities. 4. Forces in the Industry Analysis: The Intensity of the Rivalry. INTERNAL 5. Combined external and internal analyses are called SWOT analysis because it's an analysis of the organizations' strengths, weaknesses, opportunities and threats.
Explain why strategic management is important
One reason strategic management is important is because it can make a difference in how well an organization performs. Another reason has to do with the fact that organizations of all types and sizes face continually changing situations. Strategic management is also important because of the nature of organizations. They are composed of diverse divisions, units, functions and work activities that need to be coordinated. Strategic management is also important because it's involved in many of the decisions that managers make.
Discuss the contingency factors that affect planning
Organizational level Degree of environmental uncertainty: when uncertainty is high plans should be specific but flexible. Length of future commitments: plans should extend far enough to meet those commitments when the plans were developed
Know the twelve decision-making biases managers may exhibit and how managers can deal with the negative effects of decision errors and biases
Overconfidence Immediate Gratification Anchoring Effect: fixate on initial information as a starting point and then fail to adequately adjust for subsequent information. Selective Perception: selectively organize and interpret events based on biased perceptions Confirmation Framing: select and highlight certain aspects of a situation while excluding others Availability: remember events that are most recent and vivid in memory Representation: assess the likelihood of an event happening based on how closely it resembles other events Randomness: try to create meaning out of random events Sunk Costs: forget that current situations cant correct the past Self-Serving: quick to take credit for successes and blame failures on outside factors Hindsight -Managers should be aware and not use them. Pay attention to how you make decisions and try and identify the heuristics they use and the appropriateness of it
Four Basic Decision Area
Planning: what are the organization's long term objectives, strategies that best achieve those objectives, short term objectives, how difficult should individual goals be Organizing: how many employees should I have report directly to me, how should jobs be designed, when should the organization implement a different structure Leading: How do I handle employees who appear unmotivated, most effective leadership style, when is the right time to stimulate conflict Controlling: what activities in the organization need to be controlled, how should they be controlled, when is a performance deviation significant
Discuss the conclusions from studies of the relationship between planning and performance
Positive financial results-higher profits, higher return of assets Doing a good job planning and implementing those plans play a bigger part in high performance than how much planning is done' When formal planning didn't lead to higher performance the external environment often was the culprit The planning performance relationship seems to be influenced by the panning time frame
Describe the management by objectives (MBO) approach
Process of setting mutually agreed-upon goals and using those goals to evaluate employee performance Goal specificity Participative decision making Time period Performance feed back Uses goals to motivate
Contrast programmed and non-programmed decisions
Programmed is a repetitive decision that can be handled by a routine approach this is for a structured problem. Non-programmed are unique and nonrecurring and involve customer made solutions. This is for unstructured problems, upper level managerial, vague goals, long time span, judgment and creativity.
Describe the purposes of planning
Provides direction to managers and non-managers Reduces uncertainty by forcing managers to look ahead Minimizes waste and redundancy Establishes the goals or standards used in controlling
Explain the steps in setting goals
Review the organization's mission or purpose Evaluate available resources Determine the goals individually or with input of others Write down the goals and communicate them to all who need to know Review results and whether goals are being met
Describe the concepts of bounded rationality, satisficing
Says that managers make decisions rationally but are limited by their ability to process information. Because they can't possibly analyze all information on all alternatives managers (satisfice) rather than maximize. They accept solutions that are good enough
Understand business-level strategy
Seeks to determine how an organization should compete in each of its businesses 1. The role of competitive Advantage. Competitive advantage is what sets an organization apart, that is, its distinct edge. These come from the firm's core competencies. 2. Quality as Competitive Advantage. If implemented properly, quality can be a way for an organization to create a sustainable competitive advantage. 3. Sustaining Competitive Advantage. Enables the organization to keep its edge despite competitor's actions or evolutionary changes in the industry. 4. Competitive strategies developed out of the work of Michael Porter. His framework suggests that managers can choose from among three generic strategies. Porter's major contribution has been to carefully outline how managers can create and sustain a competitive strategy in order to earn above-average profitability.
Explain the role of resources, capabilities, and core competencies in the internal analysis
Should lead to a clear assessment of the organization's resources and capabilities. 2. Any activities the organization does well or any unique resources that it has are called strengths. 3. Weaknesses are activities the organization does not do well or resources it needs but does not possess. If any of the organizational capabilities or resources are exceptional or unique, they're called the organization's core competencies. 4. Organizational culture is important in internal analysis. It can promote or hinder an organization's strategic actions.
Understand the different stability and renewal strategies
Stability: corporate strategy in which an organization continues to do what it is currently doing. Renewal: address declining performance. Retrenchment is short term renewal strategy used for minor performance problems, helps an organization stabilize operations, revitalize organizational resources and capabilities. Turn around is for more serious issues. More extensive than retrenchment.
Describe each of the different types of plans
Strategic plans: apply to the entire organization and establish the organization's overall goals Operational: encompass a particular operational area of the organization Long term Short term Specific: clearly defined and leave no room for interpretation Directional: flexible plans that set out general guidelines Single use: unique situation Standing: ongoing plans that provide guidance for activities performed repeatedly
What's the hierarchy of planning
Top managements objective Division managers objective Department managers objective Individual employees objective Higher level goals are linked to lower level goals which serve as the means for their accomplishment
Explain how managers can make effective decisions in today's world
Understand cultural differences Create standards for good decision making Know when to call it quits Use an effective decision making process Build an organization that can spot the unexpected and quickly adapt to the changed environment
Describe the characteristics of well-designed goals
Written in terms of outcomes rather than actions Measurable and quantifiable Clear as to a time frame Challenging yet attainable Written down Communicated to all necessary organizational members
Discuss the assumptions of rational decision making
logical and consistent choices to maximize value. Fully objective and logical. Problem faced would be clear and unambiguous and the decision maker would have a clear and specific goal and know all the possible alternatives and consequences
