MGMT Exam #2 3013 Fundamentals of Managment Oklahoma State

decision making

Process of identifying and choosing alternative courses of action. Can be made rationally, but often it is nonrational.

In the BCG Matrix What is a Star

They have high growth, high market share -definite keepers

Predictive modeling

a data-mining technique used to predict future behavior and anticipate the consequences of change

buisness level strategy

a mechanism for a business to achieve a competitive advantage

benchmarking

a process by which a company compares its performance with that of high-performing organizations

Strategic Management

a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals

Mission Statement

a statement of the organization's purpose - what it wants to accomplish in the larger environment

diversification.

a strategy of increasing sales by introducing new products into new markets

rational decision making

a systematic process of defining problems, evaluating alternatives, and choosing optimal solutions

confirmation bias

a tendency to search for information that supports our preconceptions and to ignore or distort contradictory evidence

Forecasting

a vision or projection of the future

matrix structure

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

3 levels of culture

artifacts, values, assumptions

Strategic control

consists of monitoring the execution of strategy and making adjustments, if necessary

Value Statement

expresses what the company stands for, its core priorities, the values its employees embody, and what its products contribute to the world

Vision Statement

expresses what the organization should become, where it wants to go strategically

Business-Level Strategy

focuses on individual business units or product/service lines

In the BCG Matrix What is a Dog

have low growth, low market share - should be gotten rid of

In the BCG Matrix What is a Cash Cow

have slow growth but high market share- income finances stars and question marks

he tendency of people to view events as being more predictable than they really are referred to as _______ bias

hindsight

Trend analysis

hypothetical extension of a past series of events into the future

Satisficing model

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

Bill has been a manager for 14 years. He has seen many different situations with his employees. He often makes decisions without really thinking about them. This is called A. intuition. B. satisficing. C. bounded rationality. D. unbounded rationality.

A.

Three Levels of Strategy

corporate, business, functional

Short-term (tactical) goals are connected to long-term (strategic) goals in a hierarchy called the _______. A. objective commitment B. tactical link C. operational plan D. means-end chain

D.

The company's mission statement tells us ______. A. what the company cares most about B. what the company wants to become C. where the company wants to go strategically D. the company's reason for being

D.

entrants

potential competitors

Dialectic Method

process of having two people or groups play opposing roles in a debate in order to better understand a proposal

value orientation

reflects the extent to which a person focuses on either task and technical concerns or people and social concerns when making decisions

focused differentiation strategy

serving only one segment of the overall market and trying to be the most differentiated organization serving that segment

means-end chain

shows how goals are connected or linked across an organization

Types of Organizational Structures

simple, functional, divisional, matrix

corporate level strategy

specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets

horizontal design

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

Strategy innovation

the ability to reinvent the basis of competition within existing industries

overconfidence bias

the bias in which people's subjective confidence in their decision making is greater than their objective accuracy

Environmental scanning

the monitoring of organizations internal and external environments to detect early signs of opportunities and threats that may influence the firm's plan

The Hollow or Network Structure

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

Big data analytics

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

Ambuguity

the quality of being open to more than one interpretation; inexactness.

Business analytics

the scientific process of transforming data into insight for making better decisions

availability bias

the tendency for people to base their judgments on information that is readily available to them

framing bias

the tendency of decision makers to be influenced by the way a situation or problem is presented to them

cost-focus strategy

w keep the costs of a product below those of competitors and to target a narrow market

escalation of commitment bias

whereby decision makers increase their commitment to a project despite negative information about it

Corporate-Level Strategy

•Focuses on the organization as a whole. •Executives generally referred to as the "C-Suite."

Four General Decision Making Styles

1. Directive 2. Analytical 3. Conceptual 4. Behavioral

What are the four stages in rational decision making

1. Identify the Problem or Opportunity 2. Think Up alternative solutions 3. evaluate alternatives and select solution 4. implement and evaluate the solution chosen

What are the three processes of business

1. People 2. Strategy 3. Operations

Common Elements of Organizations three more that authorities agree on:

1. Span of Control 2. Authority 3. Centralized vs decentralized

Porter's 5 Competitive Forces

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

4 types of organizational culture

1. clan 2. adhocracy 3. market 4. hierarchy

Porter's 4 competitive strategies

1. cost-leadership 2. differentiation 3. cost-focus 4. focused-differentiation

3 types of corporate strategy

1. growth 2. stability 3. defensive

Four Steps in Rational Decision Making (Important)

1. identify the problem or opportunity 2. think up alternative solutions 3. evaluate alternatives and select a solution 4. implement and evaluate the solution chosen

sunk cost bias

A cognitive bias in which past investments of time, effort, and/or money are heavily weighted in deciding on continued investment.

representativeness bias

A cognitive bias resulting from the tendency to generalize inappropriately from a small sample or from a single vivid event or episode.

Decison Tree

A graph of decisions and their possible consequences

Functional-level strategy

A plan of action to improve the ability of each of an organization's functions to perform its task-specific activities in ways that add value to an organization's goods and services.

differentiation strategy

A strategy an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions.

MBO (management by objectives)

A system of goal setting and implementation; it involves a cycle of discussion, review, and evaluation of objectives among top and middle-level managers, supervisors, and employees.

A document that outlines a proposed firm's goals, its strategy for achieving those goals, and the standards for measuring success is known as a _______. A. business plan B. SMART goal C. mission statement D. vision statement

A.

A manager who hires all applicants who have graduated from a certain college because a particularly good employee came from that same college is an example of ______. A. representativeness bias B. escalation of commitment bias C. anchoring and adjustment bias D. confirmation bias

A.

A(n) ______ organization is a fluid, highly adaptive organization whose members are linked by information technology and collaborate on common tasks. A. boundaryless B. adjustable C. centralized D. mechanistic

A.

An organization that has authority centralized in a single person, as well as a flat hierarchy, few rules, and low work specialization, is using a ______. Multiple choice question. A. simple structure B. functional structure C. matrix structure D. divisional structure

A.

Carlos is doing a VRIO analysis for a product his company is thinking about producing. The first question he asks is, "Does this new capability allow us to minimize the threat from the main competitor gaining more market share?" He decides the answer to this question is "yes." Which aspect of the VRIO analysis does this question answer? Multiple choice question. A. Value B. Rarity C. Organization D. Imitability

A.

Cascading goals is the process of ______. A. ensuring that strategic goals at the top align with the short-term goals set at lower levels in the organization B. gaining strong top and middle management commitment to the goal setting process C. motivating employees by properly appraising goal-directed performance D. implementing the management by objectives program organization-wide

A.

Cascading goals is the process of ______. Multiple choice question. A. ensuring that strategic goals at the top align with the short-term goals set at lower levels in the organization B. gaining strong top and middle management commitment to the goal-setting process C. motivating employees by properly appraising goal-directed performance D. implementing the management by objectives program organization-wide

A.

Organizations use ______ planning to determine what contributions the departments or work units can make toward the organization's strategic priorities and policies during the next 6 -- 24 months. A. tactical B. strategic C. mission D. operational

A.

Ramona is bidding on an auction item against several other people. She knows the bid is already too high, but she doesn't want to give up, so she continues bidding. This is an example of the ______ bias. A. escalation of commitment B. hindsight C. representativeness D. anchoring and adjustment

A.

Samantha had never traveled to New York City before, but she had been on a recent business trip to Houston. When she learned that the hotel room she wanted in New York City cost $300 per night, she was shocked because she thought the hotel rooms would be priced similarly to those in Houston. This is an example of the ______ bias. A. anchoring and adjustment B. cognitive dissonance C. sunk-cost D. escalation of commitment

A.

Strategy ______ is the process of choosing among different strategies and altering them to best fit the organization's needs. Multiple choice question. A. formulation B. implementation C. control D. execution

A.

The company's CEO puts pressure on the firm's research and development managers to develop products that can be created cheaply. The firm would be following a ________ strategy . A. cost-leadership B. differentiation C. cost-focus D. retrenchment

A.

What does business growth rate refer to, as used in the BCG matrix? Multiple choice question. A. A firm's forecasted sales B. The rate of hiring within an industry C. The growth of a firm's competition D. The speed of industry growth

A.

What does the BCG matrix evaluate? Multiple select question. A. Market share, Business growth rates B. Business growth rates, Economies of scale C. Economies of scale, Cost of goods sold D> Cost of goods sold, Market share,

A.

What is the most accurate description of person-organization fit? A. A match between an individual's personality and values and those of the organization B. The education level of an individual and its relation to the job or tasks she or he performs at work C. How much the culture of the organization is related to the firm's long-term financial perspective D. The degree to which the organization's culture aligns with its strategic context

A.

Which level of strategic management focuses on the organization as a whole? Multiple choice question. A. corporate-level B. business-level C .task-level D. functional-level

A.

decentralized authority

An organization structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be.

Functional-Level Strategy

Applies to the key functional departments or units within the business units. Functional managers focus more on tactical issues

Devil's Advocacy

Assigns someone the role of critic., Uncovers and airs all possible objections.

A ______ culture has an internal focus and values flexibility rather than stability and control. Multiple choice question. A. adhocracy B. clan C. hierarchy D> market

B.

A firm's business _______ should include a description of the need the firm will fill, the operations of the business, its components and functions, and the expected revenues and expenses. A. statement B. Model C. strategy D. Plan

B.

Before introducing a new piece of software, Star Software Inc. conducts benchmark activities to assess how popular the product would be in the marketplace. Which stage of the strategic management process is being used in this situation? Multiple choice question. A. Maintain strategic control B. Establish the Mission, vision, and value statement C. Assess the current reality D. Implement the strategy

B.

Bill is supportive of his employees and prefers to have verbal conversations rather than written memos. His style is A. analytical. B. behavioral. C. conceptual. D. directive.

B.

John owns a piano sales and tuning store. He wants to be the biggest retailer in the Midlands. Adding salespeople would be part of his strategic. A. Location. B. execution. C. efficacy. D. efficiency.

B.

More positive organizational outcomes are associated with ______ cultures. A. clan B. market C. adhocracy D. hierarchy

B.

One method of reducing the escalation of commitment is to measure performance against which metric? A. Next-closest-competitor performance B. Minimum performance targets C. Ideal performance targets D. Industry leader performance

B.

Operating plans accomplish which of the following? A. Consolidate short-term goals into a long-term vision B. Break long-term output into short-term targets or goals C. Turn strategic plans into actionable long-term goals

B.

Symbols in organizational culture represent ______. . A. people whose accomplishments embody the values of the organization B. objects or actions that convey an organization's most important values to others C. activities that celebrate important occasions and accomplishments in the organization's life D. narratives based on true events which are repeated to emphasize particular values

B.

The first stage in the rational decision-making process involves ______. A. coming up with possible solutions B identifying the problem C. evaluating alternative solutions D. implementing the solution

B.

The sources from which strategic position emerges are having ______. (Choose every correct answer.) Multiple select question. A. broad needs and many customers, few needs and many customers, broad needs and few customers B. broad needs and few customers, broad needs and many customers, few needs and many customers,

B.

What occurs as a result of the horizontal organizational design? Multiple choice question. A. People with similar occupations are put together. B. Teams are used to improve collaboration and work. C. Employees are grouped around regional locations. D. Internal boundaries are strengthened.

B.

Which are characteristics of clan culture? (Choose every correct answer.) A. Emphasizes profits over employee development and satisfaction, Encourages collaboration among employees B. Encourages collaboration among employees, Promotes a feeling of family C. Structures work environment to aim at effectiveness and efficiency, Promotes a feeling of family

B.

Which model of decision making explains how managers should use logic to determine the optimal means of furthering the organization's best interests? A. The limited model B. The rational model C. The analytical model D. The optimal model

B.

Philosophies, beliefs, and norms that are explicitly stated by the organization reflect its ______ values. A. achieved B. enacted C. espoused D. observed

C

An organizational structure where people with similar occupational specialties are put together in formal groups is called a ______ structure. Multiple choice question. A. modular B. matrix C. functional D. team-based

C.

Before introducing a new piece of software, Star Software Inc. conducts benchmark activities to assess how popular the product would be in the marketplace. Which stage of the strategic management process is being used in this situation? Multiple choice question. A. Maintain strategic control B. Establish the vision C. Assess the current reality D. Implement the strategy

C.

Decision-making styles vary along which two dimensions? (Choose every correct answer.) A. Defensive avoidance, Risk multiplication B. Risk multiplication, Value orientation C. Value orientation, Tolerance for ambiguity

C.

Don't tell me the truth; just tell me what I want to hear" is an example of the ______ bias. Multiple choice question. A. representative B. availability C. confirmation D. sunk cost

C.

The strategy of moving into new lines of business is called ______. Multiple choice question. A. arbitration B.fabrication C. diversification D. accommodation

C.

The type of organizational culture that has a strong external focus and values stability and control is a(n) ______ culture. Multiple choice question. A. hierarchy B. clan C. market D. adhocracy

C.

What are three characteristics that affect decision making by a group? (Choose every correct answer.) A. The fact that groups tend to make bad decisions, The efficiency of the group, The size of the group B. The gender differences present in the group, The knowledge of group members, The size of the group C. The efficiency of the group, The knowledge of group members, The size of the group

C.

What type of bias refers to the tendency to make decisions based on an initial figure that may or may not be in line with market realities? Multiple choice question. A. Availability B. Sunk-cost C. Anchoring and adjustment D. Representativeness

C.

When corporate departments such as marketing, human resources, and information technology implement plans of action that support higher-level strategies, they are following a(n) ______ strategy. Multiple choice question. A. comprehensive B. executive C. functional D. foundational

C.

Which of these is another term for hindsight bias? Multiple choice question. A. The "Any-time-any-day" principle B. The "I-never-would-have-guessed-that" effect C. The "I-knew-it-all-along" effect D. The "Easy-come-easy-go" principle

C.

Execution

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

A ______ analysis is an assessment of the strengths, weaknesses, opportunities, and threats affecting the organization. Multiple choice question. A. benchmark B. VRIO C. trend D. SWOT

D.

A ______ goal is one that is specific, measurable, attainable, results-oriented, and has target dates. A. long-term B. challenging C. good D. SMART

D.

A ______ statement expresses what the company stands for, its core priorities and what its products contribute to the world. A. mission B. vision C. strategic D. values

D.

A company's ______ statement should provide a clear sense of the future and the actions needed to get there. A. operational B. values C. mission D. vision

D.

A(n) ______ provides a guide for a company's long-term goals. A. operations plan B. vision statement C. mission statement D. strategic plan

D.

An online retailer uses complex data-mining software to evaluate the preferences and buying habits of its customers and makes decisions based on these findings. This is an example of the use of ______ in the decision-making process. Multiple choice question. A. ethics B. intuition C. satisficing D. analytics

D.

Bob was unsure how his boss was going to react to his proposal, so he was careful to put an upbeat "spin" on the situation to emphasize the positive aspects rather than the negative aspects. Bob's method of presenting the situation demonstrates the ______ bias. A. representativeness B. sunk-cost C. hindsight D. framing

D.

Computer maker Dell tries to have the lowest prices for its computers in order to attract a large consumer group. In Porter's four competitive strategies, this would be an example of the ______ strategy. Multiple choice question. A. differentiation B. vertical integration C. focused differentiation D. cost-leadership

D.

In the Mary Kay Cosmetics Co., the best salespeople receive pink Cadillacs in special awards ceremonies. This is an example of A. A. a symbol. B. a value. C. a rite or ritual. D. both a symbol and a rite.

D.

One method of reducing the escalation of commitment is to measure performance against which metric? Multiple choice question. A. Industry leader performance B. Next-closest-competitor performance C. Ideal performance targets D. Minimum performance targets

D.

What are Porter's four competitive strategies? Multiple select question. A. Differentiation, Cost-focus, , Focused-differentiation, Vertical integration B. Cost-focus, Vertical integration, Differentiation, Focused-differentiation C. Related diversification, Cost-leadership, Differentiation, Vertical integration D. Cost-leadership, Differentiation, Cost-focus, Focused-differentiation

D.

When would a company use a VRIO analysis? Multiple choice question. A. When reorganizing staff B. When determining manufacturing work schedules C. When analyzing current market share among competing brands D. When deciding whether or not a new product might work in the marketplace

D.

Which description best fits the adhocracy organizational culture? A. Driven by competition and a strong desire to deliver results, productivity, and profits B. Best suited to companies that have established a stable market C. Structured work environment aimed at achieving effectiveness and efficiency D. Adaptable, creative, and quick to respond to marketplace changes

D.

Which description best fits the adhocracy organizational culture? Multiple choice question. A. Best suited to companies that have established a stable market B. Structured work environment aimed at achieving effectiveness and efficiency C. Driven by competition and a strong desire to deliver results, productivity, and profits D. Adaptable, creative, and quick to respond to marketplace changes

D.

______ embed preferred culture by describing organizational philosophy, mission, vision, and values. A. Stories, legends, and myths B. Slogans and sayings C. Rites and rituals D. Formal statements

D.

______ planning is used to determine how to accomplish specific tasks with available resources within the next 1 -- 52 weeks. A. Tactical B. Strategic C. Long-range D. Operational

D.

adhocracy culture

External focus., Values flexibility over stability., Adaptable, creative, and quick to respond to changes in the marketplace.

market culture

Focused on the external environment, Values stability and control, Driven by competition and a strong desire to deliver results

business level strategy

Focuses on how a firm competes in a given industry and positions itself against its competitors. The focus of competition is not between corporations; rather, it is between their individual business units.

Hierarchy culture

Has an internal focus, stability and control over flexibility, Formalized, structured work environment

Hindsight Bias

I knew it all along phenomenon

clan culture

Internal focus., Flexibility over stability. , Collaboration among employees.

centralized authority

Means that decision authority is located near the top of the organization.

Consensus

Occurs when members are able to express their opinions and reach agreement to support the final decision.

Bounded rationality

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

modular structure

The firm assembles product chunks, or modules, provided by outside contractors.

anchoring and adjustment bias

The tendency for individuals to rely too heavily on a single piece of information.

In the BCG Matrix What is a Question Marks

They are risky new ventures - some will become stars, some will become dogs

strategic positioning

attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company

Decision

choice made from among available alternatives

Contingency planning

creation of alternative hypothetical but equally likely future conditions

cost leadership strategy

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

most humans use what model

nonrational model