MGMT 321 Midterm

Selective perception

A tendency to ignore or avoid certain information, especially ambiguous information

Strategic Plans

complex and general; plans that focus on the broad future of the organization and incorporate both external and environmental demands and internal resources into managers' actions in planning for long-term objectives; focus on how to achieve goals 3-5 years in the future (related to Corporate and Business levels)

Value Chain

the set of key activities that directly produce or support the production of a firm's products and service offered to customers

What are the 3 Organizational/Strategy Levels?

1. Corporate Level. 2. Business Level. 3. Functional Level.

Generic competitive strategies

1. Cost leadership 2. Differentiation 3. Focus

What are two major lessons in identifying opportunities (when managing entrepreneurially) as identified by Vinod Khosla and OXO measuring cup?

1. Every big problem is a big opportunity. 2. To find big problems, one must observe others.

7 Steps of Rational/Classic Decision Making Model

1. Identify Decision Situations: Problems and Opportunities. 2. Develop Objectives and Criteria. 3. Generate Alternatives. 4. Analyzing Alternatives. 5. Selecting Alternatives. 6. Implementing the decision. 7. Monitoring and evaluating results.

Factors that inhibit accurate problem solving

1. Information bias. 2. Uncertainty absorption. 3. Selective perception. 4. Stereotyping. 5. Cognitive complexity. 6. Stress

3 Models of Individual Decision Making

1. Rational/Classic Model. 2. Administrative/Bounded Rationality Model. 3. Retrospective decision-making model.

What are the 3 types of plans?

1. Strategic Plans. 2. Tactical Plans. 3. Operational Plans.

Porter's 5 Forces Determining Attractiveness

1. The nature of rivalry, 2. threats of new entrants, 3. bargaining power of buyers, 4. substitutes, and 5. bargaining power of suppliers

Resource-based View of the Firm

1. financial, 2. physical, 3. organizational, 4. human capital focus is on a company's core competency

A competitive advantage is created by having and managing resources to provide goods and services that meet the following criteria:

1. they provide superior value, 2. they are rare, 3. they are difficult to imitate, and 4. they are nonsubstitutable. most importantly: hard to copy and critically valuable

Bounded Rationality Model (Administrative Model)

A model that assumes that people usually settle for acceptable rather than maximum options. Sees decision maker as a satisficer. Describes how decision makers actually make decisions.

Uncertainty absorption

A tendency for information to lose its certainty as it is passed along

Which of the following approaches is the best example of a manager using the contingency viewpoint?

Assessing the particular situation and deciding what to do

Why does a certain firm outperform others?

Competitive advantage aka a firm's ability to win consistently over the long term

Cultures differ in terms of _________; this is, the extent to which they need things to be clear or ambiguous.

Uncertainty avoidance

A manager is using information to understand the cause of a problem and determine the best corrective action. This is an example of operating in the ________ role.

Decisional

What is the key lesson from USA Today becoming the number one company in the newspaper industry?

In order to be successful, you must break the rule of game

People who live in countries which score high on individual orientations, such as the US and Great Britain, tend to __________.

Emphasize and reward individual achievements

Social Responsibility Perspective

Firms have responsibilities and obligations to society as a whole, not just shareholders. If maximizing shareholder's equity is the primary goal, cost saving alternatives can be used that are not socially responsible, as we saw in the case of Nike and sweatshop labor.

3 Mechanisms of Bounded Rationality Model

First: people examine solutions and try (may not be best). If it fails, they try a new solution until one works, and stop looking for alternatives. Second: instead of using explicit criteria, people use heuristics (often what has worked in the past). Third: Satisficing. Choosing a minimally acceptable solution instead of exhaustedly searching for the best solution.

Michael E. Porter

Harvard professor who developed the idea of unattractive vs. attractive industries and the five external forces that determine this; developed "value chain" to address internal factors

_______ alone are unlikely to guarantee managerial success, but a lack of these skills will usually limit managerial advancement, even when other skills exist.

Interpersonal skills

Dark Side of Globalization

Leads to competition where the rich have the greatest control. The extreme gap between the richest individuals and the average worker (not to mention the poorest people). Still millions of people living in absolute poverty--Chinese workers who make our shoes but can't feed their families etc.

The marketing manager of Interstate Bakeries was asked to meet with the organization's research and development department to explain why the company needed to change its 25-year-old package design for Twinkies. The marketing manager took on the interpersonal role as:

Liaison

To increase visitor numbers, a zoo and nearby natural history museum agree to run a short-term promotion offering discount combination tickets to the two venues. The zoo managers who approved the project and authorized the work hours and capital to support the promotion played _____________.

Negotiator and resource allocator role

PEST Analysis

P olitical/legal E conomic S ocial/cultural T echnological

9 Activities of the Value Chain

Primary activities: 1. Inbound logistics, 2. Operations, 3. Outbound logistics, 4. Marketing and sales, 5. Service, Support activities: 6. Procurement, 7. Technology development, 8. Human resource management, and 9. Firm infrastructure

The idea that management should pay more attention to employees came out of:

The Hawthorne Studies

Why are intangible resources more important?

They are harder to copy

Ford Motor company owns and operates a $1.9 billion manufacturing plant in Brazil. What method for organizing for global business has Ford used in this example?

Wholly owned subsidiary

According to Fredrick W. Taylor, what is the best incentive for improved worker performance?

Workers are best motivated by pay and feedback on their performance

nonprogrammed response

a decision about a problem that is either poorly defined or novel; past decisions are of little help *these are the kind of decisions top managers make

Information bias

a reluctance to give or receive negative information; you favor Hilary Clinton so ignore the email scandal

Heuristic

a rule that guides the search for alternatives into areas that have a high probability for yielding success; "rule of thumb"

programmed decisions

a standard response to a typical or routine problem; high level of certainty; rules and procedures spell out the correct way to respond

mission statement

a statement that articulates the fundamental purpose of the organization; often contains many components (i.e. philosophy, identity/self-concept, customers/markets, etc.)

Cost Leadership

a strategy that involves being the lowest-cost producer of a product or provider of a service while charging only slightly less than industry average prices *can only be gained through economies of scale*

Focus Strategy

a strategy that targets a particular market segment or niche

Differentiation

a strategy to gain competitive advantage by making a product or service different from those of its competitors through style, quality, speed, etc. firms must continually search for market opportunities and develop new products to exploit these opportunities *allows firm to demand a premium price*

Benchmarking

a tool for assessing the environment that involves identifying the best practices of your competitors and noncompetitors (can result in competitive advantage) and the results they produce

Gantt chart

a tool used to graphically display the sequence and timing of specific actions, both planned and actual. Time appears on the horizontal axis and tasks to be done appear on the vertical axis. Shows what tasks must be done before others, and the overlap in time

Strategic vision

a view of the firm over the long term that describes what it should achieve in the future

Tactical Plans

affect a single business within an organization and its product lines; plans that translate strategic plans into specific goals for specific parts of the organization; focus on 1-2 years in the future (related to Business and Functional Levels)

Retrospective Decision Model

aka implicit favorite model (the alternative you want) model that focuses on how decision makers attempt to rationalize their choices after they are made; emphasizes intuitive decision making

Anchoring and Adjusting Heuristic

an assessment made from a 'starting' value and adjusted to yield a final decision Example: uninformed secretary predicts starting salary, so you adjust it based on what you know

Availability Heuristic

an assessment of the frequency, probability, or likely causes of an event based on memory. Bias: ease of recall, retreivability Example: More deaths in the US from stomach cancer or car accidents?

Representativeness Heuristic

an assessment of the likelihood of an event's occurrence by the similarity of that occurrence to stereotypes of similar circumstances. Bias: misconceptions of chance Example: more words like this _ _ _ _ ing or like this _ _ _ _ _ n _ ?? you can think of more like the first

Disruptive Technology

company fails because they don't pay attention to a small area that is changing; IBM chose to ignore the cheaper, smaller PC market and stayed making huge, high end computers.

Gary Harmel

developed resource-capabilities view of a company that focuses on a company's core competence as their source of competitive advantage; internal focus

The benefit of standardization is that we can maximize:

economies of scale

SMART goals

effective goals must have 5 characteristics: 1. S pecific 2. M easurable 3. A ttainable 4. R ealistic 5. T ime bound

Business (Competitive) Level

focus on competing effectively within their market and answers questions like: who are our direct competitors? what are our strengths/weaknesses? what do customers value? emphasizes strategic and tactical planning

The balance between standardization (global consistency) and differentiation (local adaptation) is known as:

glocalization

perceptual distortion

highlighting the positive features of the implicit favorite over the alternative

Synergy

interaction of different parts of an organization to produce something larger; Disney makes one new cartoon (Elsa) and spends lots of money on the movie, but then can make a lot of money by using that character in all of their other industries (like merchandise, theme park, etc.)

Right brain

intuitive, uses images

Operational Plans

least complex, focus on small units within organization; plans that translate tactical plans into specific goals and actions for small units of the organization and focus on the near term; under 12 months (related to Functional Level)

Cognitive complexity

limits to the amount of information people can process at one time

Left brain

logical, uses words

Stakeholders

people or group whose interests are affected by an organization's activities, including employees, suppliers, society, and shareholders

According to Hofstede, ____________ is the extent to which people accept power and authority differences among people. US is more like ___________.

power distance; low power distance

Simon Sinek emphasizes the concept of __________ to be a good manager/leader. What theory is more inline with his views?

safety; Theory Y

Corporate Level

strategically plan and large overseer, answers questions like: What industries should the firm be in? What markets should the firm be in? What businesses should we invest money in?

Rational/Classic Decision Making Model

the earliest attempt to model the decision making process; a 7 step model of decision making. Sees decision maker as an optimizer. Describes how decision makers should (ideally) make decisions. Assumes: problems are clear, objectives are clear, all alternatives are known. Problem: people are not as rational as the classical model assumes

Satisficing

the tendency for decision makers to accept the first alternative that meets their minimally acceptable requirements rather than push further for an alternative that produces the best results

Functional Level

usually regional or department managers; focus on supporting business and corporate plans; answer questions like: what must my unit do to meet customer expectations? what are our unit's strengths and weaknesses? emphasizes operational plans