ARE 112 Midterm #2 Study Guide

Decision making:

"The process by which managers respond to opportunities and threats (from the SWOT world) by analyzing options and making determinations about specific organizational goals and courses of action"

Theories of Discrimination:

- Adverse or disparate treatment: Is one kind of unlawful discrimination in U.S. labor. It means unequal behavior toward someone b/c of a protected characteristic (e.g. race or gender) under title VII (explicitly treating one as a minority / differently due to his / her detriment. When a job description includes requirements that are not needed) - Adverse or disparate impact: substantially different rate of selection in hiring, promotion, or other employment decision which work to disadvantage of members of a race, sex, or ethnic group (implicit discrimination against minority) -High level of adverse impact against women, especially when they measure upper body strength. -Implies unfairness or test bias -Adverse impact simply describes differences between group on a testing process - Duke power, using a high school diploma requirement and an off-the-shelf intelligence test as a screening device, both adverse impact against blacks. must show a "business necessity" or a violation of Title VII.

Protected classes: Title VII of the Civil Rights Act of 1964 (Know at least four):

1. All persons of color: Is used primarily in the U.S. to describe any person who is not white. 2. National Origin: Is an act of 1924, a law that severely restricted immigration by establishing a system of national quotas that blandly discriminated against immigrants from southern and eastern Europe, and virtually excluded Asians. This policy stayed in effect until the 1960's. - involves treating people (applicants or employees) unfavorably because they are from a particular country or part of the world, because of ethnicity or accent, or because they appear to be of a certain ethnic background (even if they are not). 3. Gender including pregnancy but not sexual orientation: There is currently a bill in congress on sexual orientation - Pregnancy Discrimination Act: Prohibits sex discrimination on the basic of pregnancy. This act covers pregnancy, child birth, or related medical conditions. 4. Religion: Is the set of beliefs concerning the cause, nature, and purpose of the universe, especially when considered as the creation of a superhuman agency or agencies, usually involving devotional and ritual observances, and often containing a moral code governing the conduct of human affairs.

Characteristics of the Decision Environment

1. Bounded rationality: don't have all the data to make the call, there is a probability 2. Risk 3. Uncertainty 4. Informational Symmetry: Might have all the information, maybe some info is wrong 5. Ambiguous information: Info does't make sense, incorrect 6.Time constraints 7. Information costs

Mintzberg's typology for managers - three types of characteristics

1. Decisional: The managerial roles in this category involve using information. a. Entrepreneur: as a manager, you create and control change within the organization. This means solving problems, generating new ideas, and implementing them. b. Disturbance Handler: When an organization or team hits an unexpected roadblock, it's the manager who must take charge. You also need to help mediate disputes within it. c. Resource Allocator: You'll also need to determine where organizational resources are best applied. This involves allocating funding, as well as assigning staff and other organizational resources. d. Negotiator: You may be needed to take part in and direct important negotiations within your team, department, or organization. 2. Interpersonal: The managerial roles in this category involve providing information and ideas. a. Figurehead: as a manager you have social, ceremonial, and legal responsibilities. You're expected to be a source of inspiration. People look up to you as a person with authority, and as a figurehead. b. Leader: This is where you provide leadership for your team, your department or perhaps your entire organizations. It's where you manage the performance and responsibilities of everyone in this group. c. Liaison: Managers must communicate with internal and external contacts. You need to be able to network effectively on behalf of your organization. 3. Informational: The managerial roles in this category involve processing information. a. Monitor: In this role you regularly seek out information related to your organization and industry, looking for relevant changes in the environment. You also monitor your team, in terms of both their productivity and their well being. b. Disseminator: This is where you communicate potentially useful information to your colleagues and your team. c. Spokesperson: Managers represent and speak for their organizations. In this role you're responsible for transmitting information about your organization and its goals to the people outside it.

Threats to the change process:

1. Degree of change 2. Time frame 3. Impact of culture 4. Loss of existing benefits 5. Threats to position power 6. Threats to security 7. Redistribution of power 8. Disturb existing social networks 9. Uncertainty regarding change 10. Disruption of routine

Change Strategies:

1. Force-Coercion: Use of formal authority to create change. (must make changes | EX: Mr. Peach) -power base: legitimate, reward, coercive. -Managerial behavior: direct forcing, political maneuvering. -Likely results: Faster but may only be temporary. 2. Rational Persuasion: creating change through rational and empirical arguments. (convincing yourself to do / not being forced) -power base: expertise -Managerial behavior: informational efforts -Likely results- highly variable depending on acceptance of change. 3. Shared power: developing support through personal values, beliefs, and commitments. -power base: referent (admire the boss) -Managerial behavior: participative efforts. -Likely results- slower, but able to internalize the changes. (we believe in it and it's a good idea)

SKA's (Skills, Knowledge, and Ability)

1. Skills: your tool box, the things you can (Learn | Foreign language) 2. Knowledge: bunch of facts, (Choice | Accumulate) 3. Ability: (Inherent | Innate)

Frameworks to analyze decision making:

1. Structured / programmed decisions: is a general term for carefully organized analysis of problems in order to reach decisions that are focused clearly on achieving fundamental objectives. - simple, apply online, looks are your information quickly when applying for credit cards. - Programmed decisions: a manager has encountered or made in the past, a decision that has been made many times before, a routine and repetitive process, wherein a manager follows certain rules and guidelines. 2. Unstructured or un-programmed decisions: not simple, interview different times to hire for credit cards. - Un-programmed decisions: usual situations that have not been often addressed, decisions made based on information and a manager's intuition and judgement.

Likert Scale

Also known as a psychometric scale commonly involved in the research that employs questionnaires. Used to approach scaling responses in a survey research, such that the term is often used interchangeably with rating scale, even though the two are not synonymous. This is a bipolar scaling method, measuring either positive or negative responses to a statement, sometimes an even-point scale is used, where the middle option of "neither agree nor disagree" is not available.

Decision rights

An example of a management tool An organizational rather than individual concept of formally assigning the authority to select one of the alternatives for a decision. Generally assigned based on the type of decision and exists on a continuing basic and on a situational basis Usually more for unstructured decisions EX: Who decides on the bid amount on a proposed construction project by the general contractor? Who decides on which capital improvements to make a hospital? Who decides how many analysts to hire this fall at Genetech?

What are the components of the Four P's?

Price, Product, Placement, Promotion Target Market

Innovation

Applying new ideas to the organization Invent: the application of the new idea from the "creative process" for the organization. Develop: makes the new idea practical Diffuse: puts the idea into the hands of the end user Integrate: makes the new idea permanent in the organization Monitor: tracking of the innovation to validate its continued use

Cash usage and cash generation are found in the ______________.

BCG growth / Share Matrix

The Business Cycle

Captures the reasoning for initiating a project of task Presented in a well-structured written document, and sometimes in a form of a short verbal argument or presentation Whenever resources like money or effort are consumed, they should be in support of a specific business need EX: a software upgrade might improve system performance, but the "business case" is that better performance would improve maintenance costs Business case depends on business attitude and business volume and can range from comprehensive and highly structured, as required by formal project management methodologies to informal and brief Note that it is not the job of the project manager to build the business case, this task is usually the responsibility of stakeholders and sponsors.

BCG Growth / Share Matrix - for cash generation

Cash cows Stars Question Marks Dogs Market Share Market Growth (refer to pictures on google doc)

Change management

Change occurs, this is not the same as transformational change, more of general comments about change, but we do see change management in the area of transformational change. 1. Dissatisfaction with the present situation 2. External pressure toward change 3. Momentum toward change (These are not the same as the driving force for change, but the context of change management)

Related Manager's Skills

Conceptual skills: take in the big picture of the entire organization and uses abstract ideas to set strategic initiatives. Human skills: involve communication and attention to relationships with others i. Top manager ii. Middle manager iii. Low level manager Technical skills: accomplish tasks for those working on the front lines; they are techniques, practices, tools, and processes.

Operation Bear Hug would be found in the _____________ component of the balanced scorecard.

Customer From your checkoff assignment on the strategic analysis of IBM. Internal business processes was not the best answer as a process is an ongoing activity while "Operation Bear Hug" was more of a one-time activity of focused at the marketplace rather than IBM's internal operation.

Methods of Change Management:

Phase Method: (takes up to 5 years) - Unfreezing: prepare for change (everything is open for change / big changes) - Changes - Refreezing: Change is stabilized (you make the changes and you stabilize it) Crossover Approach: This is risky, if it doesn't work because it can cause business to shut down EX: Wells Fargo

CSF are displayed on the _________

Dashboard Critical Success Factors (CSF)

Thinking about Lou at IBM, he would be most identifies with the ___________ chain compared to the other "chain" models from class.

Demand We made a point in class about Lou's comments that the "market place determines everything we do." So he wants to produce to the market.

Principal and Agency Theory

Develops when a principal creates an environment in which an agent's incentives don't align with its own. May also be called the agency dilemma or agency problem which occurs when one person or entity, the "agent" is able to make decisions behalf of, or that impact another person or entity, the "principal" This dilemma exists in circumstances where the agent is motivated to act in their own best interests, which are contrary to those of the principal and is an example of moral hazard. EX: corporate management (agent), Shareholders (principal), politicians (agents), voters (principal)

Dashboard:

Displays critical success factors (headcount, average revenue per employee, employee satisfaction survey, headcount by dept., attrition rates)

From the class discussion, what are the three reasons change occurs?

Dissatisfaction with the present situation External pressures toward change Momentum toward change

From class the topic of overtime compensation was related to the topic of ____________.

Exempt and nonexempt employees.

In the first part of the IBM book Lou made a comment at a meeting that he did not have the save technical skills as others in the company. Here he was telling them he did not have _____________.

Expert power But expert or expert power should have come to mind. We also mentioned this in class. SKA was not a good answer SKA's are used to describe a job and at the meeting he was addressing how he was going to run IBM. (SKA= skills, knowledge, Ability)

We can see the "buy side" and "sell side" in the ______________ strategic lens.

Porter's five forces

Balanced Scorecards but not the items in each of the squares:

Financial: to succeed financially, how should we appear to our shareholders? (success is well managed financially, profit comes from customers) Customer: To achieve our vision, how should we appear to out customers? (Honest, Loyal, Trustworthy, and reliable) Internal Business Process: To satisfy out shareholders, what business processes must we excel at? Learning and Growth: To achieve out vision, how will we sustain in our ability to change and improve? Metrics: (not important, but still in the balance score card) Initiatives: (not important, but still in the balance score card)

Creativity

Generate new and original ideas - the "R" in research and development That are actionable - the "D" in research in development Areas of focus of creativity: Productivity (generally called "process R&D"), new products, new structures Creativity needs expertise, motivation, and creative thinking skills and abilities.

Repuation

How others see managers and organizations as a result of their ethical behavior Reputation leads to trust

Reputation:

How others see managers and organizations as a result of their ethical behavior. Reputation leads to trust.

Porter's Five Forces

Industry members: Industry competition, price, customers, and place EX: Grocery stores, safeway, etc. Suppliers: has more power Customers or buyers: want low prices as long as prices are reasonable EX: brands, switching / substituting Substitutes: Gives same value and satisfaction but a different items such as brand EX: groceries from safeway cooking yourself vs. going to a restaurant to get food Potential Entrants: Service oriented not productive oriented EX: Airplane tickets from Expedia High capital cost to enter and high cost to exit (refer to google doc for pictures)

Staff Functions

Is an alternate function of people that do not partake instantly in an activity as they help the line functions reach their targets. Advisory, analysis, and support functions such as accounting, planning, transportation provided to production (line) employees. Help or assist line functions accomplish the primary objectives of the enterprise. Activities that are indirectly related to the major objectives of the enterprise.

Line Function

Is any kind of daily operation such as purchasing, manufacturing, and selling that is directly involved in carrying out the purpose of an organization. Is involved in or contributes directly to the main business activity of a firm. Activities that give definition to the organization structure and which ensures that the product or service is produced and reaches the customer at a profit.

In the Duke hospital case, the physician used ______ power as the director of the pediatric services at the hospital.

Legitimate The key words were "as director of pediatric services" was his legitimate power. He had other powers but being director gave him legitimate power

In the value chain the primary activities are most like ______ functions and the supporting activities are most like the _________ functions

Line Staff

(How do we "put wheels" on strategic thinking?) ... Strategic management tools - different than the lens we used to view strategy

Mission: what we do - this is a focus on the strategic business units - SBU's and is an internal view. This is the mission statement for the IBM global financing: "The mission of Global Financing is to facilitate clients' acquisition of IBM hardware, software, and services." Vision: How we see ourselves and how we want out stakeholders to see us - this is a focus on the marketplace and is generally organizational - wide in its scope. "IBM's vision is to be the world's most successful and important information technology company."

Fair Labor Standard Acts:

Primarily for overtime wages. Nonexempt Employees: they get paid overtime. (Are not exempt from free labor standards act requirement. Employees who fall within this category must be paid at least the federal minimum wage for each hour they worked and given overtime pay of not less than one, and a half time their hourly wages for any hour worked beyond 40 each week.) Exempt Employees: Do not get paid overtime. (Excluded from minimum wage, overtime regulation and other rights and protection afforded nonexempt workers. Employers must pay a salary rather than an hourly wage for a position for it to be exempt. Executive, supervisory, professional, or outside sale positions are exempt.)

In class we commented that we used contracts for resolve issues between shareholders and executive commonly known as the ______________.

Principal and agency Theory.

Components of the Four P's

Product Price Promotion Placement Target Markets

In the class discussion on discrimination, we mentioned the Civil Rights Act of 1964 listed _____________ classes such as religion and national origin.

Protected

When we think about trust and reputation, we can see that it is most closely related to _____________ power.

Referent power The word "admiration" in the definition of referent power leads to the correct answer.

In class we made the comment that trust comes from ________.

Reputation

Reorganizing the legal, ownership, operational, or other structures of an organization for optimizing reasons is known as ________________>

Restructuring

From class we commented that we use ______ to define or describe a job

SKA's or skills knowledge and abilities

The two types of harassment from class are __________.

Sexual and ethical or racial harassment.

Types of Harassments:

Sexual harassment: harassment (typically of a woman) in a workplace, or other professional or social situation, involving the making of unwanted sexual advances or obscene remarks. Racial or Ethnic Harassment: unwelcome verbal, written or physical conduct based on a person's actual or perceived race, color, or national origin that substantially or unreasonably interferes with an individual's work or academic performance.

4 types of ethics

Societal: how members of a society should interact Occupational: Standards of behavior for a profession or trade Organizational: guiding practices for a company's managers to view their responsibility to stake holders. Individual: personal standards and values on how one should interact with others.

SWOT

Strengths, weaknesses, opportunities, threats

Delphi Technique:

The Delphi begins with the initial development of a questionnaire focusing on the identified problem. An appropriate respondent group is selected, and then the questionnaire is mailed to them. Each participant answers the questionnaire independently and returns it. The initiators of the questionnaire summarize responses, then develop a feedback summary and a second questionnaire for the same respondent group. After reviewing the feedback summary, respondents independently rate priority ideas included in the second questionnaire, then mail back the responses. The process is repeated until investigators feel positions are firm and agreement on a topic is reached. A final summary report is issued to the respondent group. Another information technology and decision making process - management information systems Support by MIS applications but not pure MIS applications. Use focus groups, SME: subject matter expert.

Referent power

The power from admiration or respect.

Reward power

The power from being able to provide a reward to others. - In order to have authority you need to have power. - Authority: is the ability to command, direct, or influence thought, opinions, or behavior - Power alone does not give authority, this is a topic in our leadership

Legitimate power

The power granted by some authority. EX: Mr. Peach and Alex

Expert power

The power to have some specific skill or knowledge not found in others. EX: computer Wiz: Ralph and Jonah

Coercive power

The power to punish (least effective).

Test of homogeneity:

The test of sameness... refer to notes number 24. on study guide on google docs.

Independent Contractors:

These are "separate" from the organization and do not get benefits taxes withheld and the like. There are many people who are incorrectly treated as independent contractors and should be treated as employee.

Value Chain

This is more of an architectural view of the process. a. The "component" business model in which business functions are specialized and modularized. b. Core competencies: functions or capabilities that are most efficient, optimized, or that provide the most competitive advantage. c. Outsourcing: having external service providers perform some activity formerly carried out by a functional organization and is facilitated by componentization.

Decision Support System (DSS)

This is the information technology and the decision-making process, the management information systems. DSS is also known as decision support system which is used for structured decisions. Decision support system is a computer-based information system that supports business or organization decision-making activities, organizes, collects, and analyzes business data to facilitate quality business decision-making for management, operations, and planning.

In our class discussion on decision making we used the terms ______ and ______ to contrast complicated and simple decisions.

Unstructured or unprogrammed decisions Structured or programmed decisions

Rules to solve an Ethical Dilemma (when a decision needs to be made that will have an adverse effect on someone)

Utilitarian Rule: Greatest good for the greatest number of people. An action is right as it conforms to a rule that leads to the greatest good, or that "the rightness or wrongness of a particular action is a function of the correctness of the rule of which is an instance." Moral Rights Rule: Protects the fundamental rights and privileges. An ethical decision is one of that best maintains and protects the fundamental or inalienable rights and privileges of people affected by it. Justice Rule: A fair and equitable distribution of benefits and harms. An ethical decision distributes benefits and harms among people and groups in a fair, equitable, or impartial way. Practical rule: An ethical decision is one that a manager has no reluctance about communicating to people outside the company because the typical person in a society would think it is acceptable. A "business model" that says you should only make decisions that you are willing to disclose to the public.

Trust

Willingness of a person or a group to have confidence in the goodwill and competence of another person or organization even though this willingness puts them at risk.

Trust:

Willingness of a person or group to have confidence in the goodwill and competence of another person or organization even though this willingness puts them at risk.

stakeholders

a person, group, or organization that has interest or concern in an organization. They can affect or be affected by the organization's actions, objectives, and policies. EX: creditors, directors, employees, government, owners, suppliers, unions. Primary stakeholders in a corporations are its investors, employees, and customers. Those who have a claim on the success and failure of an organization.

Headcount:

as a critical success factor (CSF), number of full time equivalent

The four types of ethics are _______.

societal, occupational, organizational, individual