Management Review: Chapter 2, 5, 16, 17
entrepreneurship
risk-taking behavior in pursuit of business success
If Douglas McGregor heard an instructor complaining that her students were lazy and irresponsible, he would say these assumptions _________. (a) violated scientific management ideas (b) focused too much on needs (c) would create a negative self-fulfilling prophecy (d) showed contingency thinking
c
If a team leader wants to tap the advantages of participatory planning, what type of decision-making method should he or she use? (a) Authority (b) Quantitative (c) Group (d) Zero-based
c
The highest level in Maslow's hierarchy is _________. (a) safety (b) esteem (c) self-actualization (d) physiological
c
The planning process isn't complete until _________. (a) future conditions have been identified (b) stretch goals have been set (c) plans are implemented and results evaluated (d) budgets commit resources to plans
c
When a manager puts Danté in a customer relations job because he has strong social needs and gives Sherrill lots of daily praise because she has strong ego needs, he is displaying _________. (a) systems thinking (b) Theory X (c) contingency thinking (d) administrative principles
c
_________ management assumes people are complex, with widely varying needs. (a) Classical (b) Neoclassical (c) Behavioral (d) Modern
c
functional plan
a plan that identifies how different parts of an enterprise will contribute to accomplishing strategic plans.
strategic plan
a plan that identifies long-term directions for the organization.
operational plan/tactical plan
a plan that sets out ways to implement a strategic plan.
short-range plan
a plan that usually covers a year or less.
long range-plan
a plan that usually covers three years or more.
European Union (EU)
a political and economic alliance of 28 European countries
bureaucracy
a rational and efficient form of organization founded on logic, order, and legitimate authority.
subsystem
a smaller component of a larger system.
policy
a standing plan that communicates broad guidelines for decisions and action.
plan
a statement of intended means for accomplishing objectives.
angel investor
a wealthy individual willing to invest in return for equity in a new venture
Having a clear sexual harassment policy won't help an organization much unless it is accompanied by clear _________ that let all members know for sure how it will be implemented. (a) contingencies (b) benchmarks (c) procedures (d) budgets
c
global manager
culturally aware and informed on international affairs
A marketing plan in a business firm would most likely deal with _________. (a) production methods and technologies (b) money and capital investments (c) facilities and workforce recruiting (d) sales and product distribution
d
One of the expected benefits of participatory planning is _________. (a) faster planning (b) less need for forecasting (c) greater attention to contingencies (d) more commitment to implementation
d
Planning is best described as the process of _________ and _________. (a) developing premises about the future; evaluating them (b) measuring results; taking corrective action (c) measuring past performance; targeting future performance (d) setting objectives; deciding how to accomplish
d
Which principle states that a person should only receive orders from one boss in an organization? (a) Scalar (b) Contingency (c) Hawthorne (d) Unity of command
d
_________ planning identifies alternative courses of action that can be quickly taken if problems occur with the original plan. (a) Benchmark (b) Participatory (c) Staff (d) Contingency
d
most favored nation status
gives a trading partner the most favorable treatment for imports and exports
equity financing
gives ownership shares to outsiders in return for their financial investments
global corporation, multinational corporation (MNC)
has extensive international business dealings in many foreign countries
business model
how the business intends to make a profit by generating revenues that are greater than costs
World Trade Organization (WTO)
is a global institution established to promote free trade and open markets around the world
foreign subsidiary
is a local operation completely owned by a foreign firm
child labor
is the full-time employment of children for work otherwise done by adults
globalization gap
is where large global firms gain disproportionately from the global economy versus smaller firms
limited liability partnership
limits the liability of one partner in case of negligence by any others
Southern Africa Development Community (SADC)
links 14 southern African countries in trade and economic development efforts
Asia-Pacific Economic Cooperation (APEC)
links 21 nations to promote free trade and investment in the Pacific region
hierarchy of objectives
lower level objectives help to accomplish higher-level ones.
Foreign Corrupt Practices Act
makes it illegal for US firms and their representatives to engage in corrupt practices overseas
evidence-based management
making decisions based on hard facts about what really works.
total quality management
managing with an organizationwide commitment to continuous improvement, product quality, and customer needs.
best practices
methods that lead to superior performance.
reshoring
moves foreign production and jobs back to domestic locations
need
a physiological or psychological deficiency that a person wants to satisfy.
debt financing
borrowing money from another person, a bank, or a financial institution
procedure/rule
a piece of policy that precisely describes actions to take in specific situations.
budget
a plan that commits resources to projects or activities.
Enrique Temoltzin is the new manager of a college bookstore. He wants to do a good job and decides to operate the store on Weber's concept of bureaucracy. Question: Is bureaucracy the best approach here? What are its potential advantages and disadvantages? How could Enrique use contingency thinking in this situation?
A bureaucracy operates with a strict hierarchy of authority, promotion based on competency and performance, formal rules and procedures, and written documentation. Enrique can do all of these things in his store. However, he must be careful to meet the needs of the workers and not to make the mistake identified by Argyris—failing to treat them as mature adults. While remaining well organized, the store manager has room to help workers meet higher order esteem and self-fulfillment needs, as well as to exercise autonomy under Theory Y assumptions. Enrique must also be alert to the dysfunctions of bureaucracy that appear when changes are needed or when unique problems are posed or when customers want to be treated personally. The demands of these situations are difficult for traditional bureaucracies to handle, due to the fact that they are set up to handle routine work efficiently and impersonally, with an emphasis on rules, procedures, and authority.
How do the deficit and progression principles operate in Maslow's hierarchy?
According to the deficit principle, a satisfied need is not a motivator of behavior. The social need, for example, will motivate only if it is deprived or in deficit. According to the progression principle, people move step-by-step up Maslow's hierarchy as they strive to satisfy their needs. For example, the esteem need becomes activated only after the social need is satisfied. Maslow also suggested, however, that the progression principle stops op- erating at the level of self-actualization; the more this need is satisfied, the stronger it gets.
My friends Curt and Rich own a local bookstore. They are very interested in making plans for improving the store and better dealing with competition from the other bookstores that serve college students in our town. I once heard Curt saying to Rich: "We should be benchmarking what some of the successful coffee shops, restaurants, and novelty stores are doing." Rich replied: "I don't see why; we should only be interested in bookstores. Why don't we study the local competition and even look at what the best bookstores are doing in the big cities?" Questions: Who is right, Curt or Rich? If you were hired as a planning consultant to them, what would you suggest as the best way to utilize benchmarking as a planning technique to improve their bookstore? And, how would you use the planning process to help Curt and Rich come to a point of agreement on the best way forward for their bookstore?
Benchmarking is the use of external standards to help evaluate one's own situation and develop ideas and directions for improvement. Curt and Rich are both right to a certain extent about its potential value for them. Rich is right in suggesting that there is much to learn by looking at what other bookstores are doing really well. The bookstore owner/manager might visit other bookstores in other towns that are known for their success. By observing and studying the operations of those stores and then comparing his store to them, the owner/manager can develop plans for future action. Curt is also right in suggesting that there is much to be learned potentially from looking outside the bookstore business. They should look at things like inventory management, customer service, and facilities in other settings—not just bookstores; they should also look outside their town as well as within it.
What is the difference between contingency planning and scenario planning?
Contingency planning essentially makes available optional plans that can be quickly implemented if things go wrong with the original plan. Scenario planning is a longer-term form of contingency planning that tries to project several future sce- narios that might develop over time and to associate each scenario with plans for best dealing with it.
Explain by example several ways a manager might use contingency thinking in the management process.
Contingency thinking takes an "if-then" approach to situations. It seeks to modify or adapt management approaches to fit the needs of each situation. An example would be to give more cus- tomer contact responsibility to workers who want to satisfy social needs at work, while giving more supervisory responsibilities to those who want to satisfy their esteem or ego needs.
Why is participation good for the planning process?
Participation is good for the planning process, in part because it brings to the process a lot more information, diverse viewpoints, and potential alternatives than would otherwise be available if just one person or a select group of top managers are doing the planning. Furthermore, and very importantly, through participation in the planning process, people develop an understanding of the final plans and the logic used to arrive at them, and they develop personal commitments to trying to follow through and work hard to make implementation of the plans successful.
How does planning facilitate controlling?
Planning facilitates controlling because the planning process sets the objectives and standards that become the basis for the control process. If you don't have objectives and standards, you have nothing to compare actual performance with; consequently, control lacks purpose and specificity.
What are the three classical approaches to management?
Scientific management, administrative principals, and bureaucratic management.
Compare the Hawthorne effect with McGregor's notion of self-fulfilling prophecies.
The Hawthorne effect occurs when people singled out for special attention tend to perform as expected. An example would be giving a student a lot of personal attention in class with the result that he or she ends up studying harder and performing better. This is really the same thing as McGregor's notion of the self-fulfilling prophesy with the exception that McGregor identified how it works to both the positive and the negative. When managers, for example, have positive assumptions about people, they tend to treat them well, and the people respond in ways that reinforce the original positive thinking. This is a form of the Hawthorne effect. McGregor also pointed out that negative self-fulfilling prophesies result when managers hold negative assumptions about people and behave accordingly.
List the five steps in the planning process, and give examples of each.
The five steps in the formal planning process are (1) define your objectives, (2) determine where you stand relative to objectives, (3) develop premises about future conditions, (4) identify and choose among action alternatives to accomplish objectives, and (5) implement action plans and evaluate results.
Maslow's progression principle
a need at any level becomes activated only after the ext-lower-level need is satisfied.
start-up
a new and temporary venture that is trying to discover a profitable business model for future success
Give an example of how principles of scientific management can apply in organizations today.
You can see scientific management principles operating everywhere, from UPS delivery, to fast-food restaurants, to order-fulfillment centers. In each case, the workers are trained to perform highly specified job tasks that are carefully engineered to be the most efficient. Their supervisors try to keep the process and workers well supported. In some cases the workers may be paid on the basis of how much work they accomplish in a time period, such as a day or week. The basic principles are to study the job, identify the most efficient job tasks and train the workers, and then support and reward the workers for doing the tasks well.
A management consultant who advises managers to carefully study jobs, train workers to do them with efficient motions, and tie pay to job performance is using ideas from _________. (a) scientific management (b) contingency thinking (c) Henri Fayol (d) Theory Y
a
If an organization was performing poorly, what would Henri Fayol most likely advise as a way to improve things? (a) teach managers to better plan, organize, lead, and control (b) give workers better technology (c) promote only the best workers to management (d) find ways to improve total quality management
a
If your local bank or credit union is a complex system, then the loan-processing department of the bank would be considered a _________. (a) subsystem (b) closed system (c) learning organization (d) bureaucracy
a
In a hierarchy of objectives, plans at lower levels are supposed to act as _________ for accomplishing higher-level plans. (a) means (b) ends (c) scenarios (d) benchmarks
a
The benefits of planning often include _________. (a) improved focus (b) less need for controlling (c) more accurate forecasts (d) guaranteed success
a
The big interest today in _________ refers to the management practice of using mathematics and computing power to examine "big data" for insights on business. (a) continuous improvement (b) Theory X (c) analytics (d) total quality management
a
When a manager is asked to justify a new budget proposal on the basis of projected activities rather than as an incremental adjustment to the prior year's budget, this is an example of _________. (a) zero-based budgeting (b) strategic planning (c) operational planning (d) contingency planning
a
When a worker is a responsible parent, makes car payments, and is active in local organizations, how might Argyris explain her poor work performance? (a) She isn't treated as an adult at work. (b) Managers are using Theory Y assumptions. (c) Organizational subsystems are inefficient. (d) She doesn't have the right work skills.
a
zero-based budget
a budget that allocates resources as if each budget was brand new.
small business
a business that has fewer than 500 employees, is independently owned and operated, and does not dominate its industry
family business
a business that is owned and financially controlled by family members
protectionism
a call for tariffs and favorable treatments to protect domestic firms from foreign competition
benefit corporation (B-corp)
a corporate form for businesses whose stated goals are to combine making a profit with benefitting society and the environment
business incubator
a facility that offers services to help new businesses get established
limited liability corporation (LLC)
a legal entity that combines the advantages of the sole proprietorship, partnership, and corporation
corporation
a legal entity that exists separately from its owners
first-mover advantage
advantage gained from being first to exploit a niche or enter a market
veteran's advantage
advantage that includes strong organizational skills and a tolerance for risk
continuous improvement
always searching for new ways to improve work quality and performance.
transnational corporation
an MNC that operates worldwide on a borderless basis
social entrepreneur
an entrepreneur that takes risks to find new ways to solve pressing social problems
serial entrepreneur
an entrepreneur who starts and runs businesses and nonprofits over and over again, moving from one interest and opportunity to the next
initial public offering (IPO)
an initial selling of stock to the public at large
management science/operations research
apply mathematical techniques to solve management problems.
nontariff barriers
are nontax policies that governments enact to discourage imports, such as quotas and import restrictions
tariffs
are taxes governments levy on imports from abroad
family business feud
argument(s) that can lead to small business failure
theory Y
assumes people are willing to work, accept responsibility, are self-directed, and are creative.
theory X
assumes people dislike work, lack ambition, are irresponsible, and prefer to be led.
complacency trap
being lulled into inaction by current successes or failures.
forecasting
attempts to predict the future.
As a first step to help implement her firm's strategic plans, the CEO of a business firm would want marketing, manufacturing, and finance executives to develop clear and appropriate _________. (a) procedures (b) operational plans (c) zero-based budgets (d) forecasts
b
From a time management perspective, which manager is likely to be in best control of his or her time? One who _________. (a) tries to never say "no" to requests from others (b) works on the most important things first (c) immediately responds to instant messages (d) always has "an open office door"
b
If an organization is considered an open system, work activities that turn resources into outputs are part of the _________ process. (a) input (b) transformation (c) output (d) feedback
b
One of the conclusions from the Hawthorne studies was that _________. (a) motion studies could improve performance (b) groups can sometimes restrict the productivity of their members (c) people respond well to monetary incentives (d) supervisors should avoid close relations with their subordinates
b
The Hawthorne studies were important in management history because they raised awareness about the influence of _________ on productivity. (a) organization structures (b) human factors (c) physical work conditions (d) pay and rewards
b
The best planning goals or objectives would have which of the following characteristics? (a) Easy enough so that no one fails to reach them (b) Realistic and possible to achieve, while still challenging (c) Open ended, with no clear end point identified (d) No set timetable or due dates
b
The first step in the planning process is to_________. (a) decide how to get where you want to go (b) define your objectives (c) identify possible future conditions or scenarios (d) act quickly to take advantage of opportunities
b
When managers make decisions based on solid facts and information, this is known as _________. (a) continuous improvement (b) evidence-based management (c) Theory Y (d) the scalar chain
b
When managers use benchmarking in the planning process, they usually try to _________. (a) set up flexible budgets (b) identify best practices used by others (c) find the most accurate forecasts that are available (d) use expert staff planners to set objectives
b
Which of the following is one of the characteristics of Weber's ideal bureaucracy? (a) Few rules and procedures (b) Impersonality (c) Promotion by privilege not by merit (d) Ambiguous hierarchy of authority
b
vision
clarifies the purpose of the organization and expresses what it hopes to be in the future.
scientific management
emphasizes careful selection and training of workers and supervisory support
sweatshops
employ workers at very low wages, for long hours, an in poor working conditions
mompreneurs
entrepreneurs who pursue business opportunities they spot as mothers
greenfield venture
establishes a foreign subsidiary by building an entirely new operation in a foreign country
political risk-anaylsis
forecasts how political events may have an impact on foreign investments
global strategic alliance
in __________, each partner hopes to achieve through cooperation things they couldn't do alone
franchising
in ___________, a firm pays a fee for rights to use another company's name and operating methods
exporting
in ____________, local products are sold abroad
global sourcing
in _____________, firms purchase materials, manufacturing, or services around the world for local use
global economy
in the _____________, resources, markets, and competition are worldwide in scope
corruption
involves illegal practices to further one's business interests
crowdfunding
new ventures go online to get start-up financing for their businesses from crowds of investors
necessity-based entrepreneurship
occurs when people start new ventures because they have few or no other employment options
Small Business Development Centers (SBDCs)
offer guidance to entrepreneurs and small business owners on how to set up and manage business operations
licensing
one firm pays a fee for rights to make or sell another company's products
joint venture
operates in a foreign country through co-ownership with local partners
general partnership
owners share management and responsibility for debts and losses
limited partnership
owners share profits, but responsibility for losses is limited to original investments
Maslow's deficit principle
people act to satisfy needs for which a satisfaction deficit exists; a satisfied need doesn't motivate behavior.
venture capitalists
people who make large investments in new ventures in return for an equity stake in the business
stretch goals
performance targets that we have to work extra hard and stretch to reach.
succession plan
plan that describes how the leadership transition and related financial matters will be handled
business plan
plan that describes the direction for a new business and the financing needed to operate it
scenario planning
planning that identifies alternative future scenarios and makes plans to deal with each.
contingency planning
planning that identifies courses of action to take when things go wrong.
participatory planning
planning that includes the persons who will be affected by the plans and/or who will be asked to implement them.
political risk
possible loss because of instability and political changes in foreign countries
currency risk
possible profit loss because of fluctuating exchange rates
outsourcing
shifts local jobs to foreign location to take advantage of lower-wage labor in other countries
entrepreneur
someone who is willing to take risks and pursue opportunities in situations that others view as problems or threats
objectives
specific results that one wishes to achieve.
unity of command principle
states that a worker should receive orders from only one boss.
scalar chain principle
states that organizations should operate with clear and unbroken lines of communication top to bottom.
NAFTA
the North American Free Trade Agreement linking Canada, the United States, and Mexico in an economic alliance
SMART goals
the best goals are SMART- specific, measurable, achievable, relevant, and time-bound.
insourcing
the creation of domestic jobs by foreign employers
succession problem
the issue of who will run the business when the current head leaves
importing
the process of acquiring products abroad and selling them in domestic markets
globalization
the process of growing interdependence among elements of the global economy
planning
the process of setting performance objectives and determining how to accomplish them.
benchmarking
the process of using external comparisons to gain insights for planning.
motion study
the science of reducing a job or task to its basic physical motions.
operations management
the study of how organizations produce goods and services.
analytics
the systematic use and analysis of data to solve problems and make informed decisions.
the Hawthorne effect
the tendency of persons singled out for special attention to perform as expected.
open system
transforms resource inputs from the environment into product outputs.
contingency thinking
tries to match management practices with situational demands.
self-fulfilling prophecy
when a person acts in ways that confirm another's expectations.
franchise
when one business owner sells to another the right to operate the same business in another location