Man Exam 2

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advantages of strategic planning

- Provide direction and momentum - Inspire new ideas - Cultivate a sustainable competitive advantage

Advantages of horizontal structure

- facilitate organizational learning, improve responsiveness to customers because they promote rapid communication and reduction of risk cycle times, enjoy the advantages of teamwork, including flexibility, empowerment, and broader perspectives

limitations of planning

-can create a false sense of certainty -may cause rigidity in a turbulent environment -can get in the way of intuition and creativity

benefits of planning

-provide a source of motivation and commitment -guide resource allocation -guide to action -set a standard of performance

Ways to ENCOURAGE innovation

1)Create a culture that celebrates failure, 2)devote the right amount of time, money, energy and focus to innovation 3) reward top performers

SHRM 7 steps

1. determine the mission/vision 2. determing grand strategy 3. develop strategic plans 4. determine what HR are needed 5. recruit/select indiv 6. engage in orientation, training, develop 7. appraise performance

performance management 4 steps

1. express performance expectations 2. monitor progress and evaluate outcomes 3. provide feedback and coaching 4. provide rewards or consequences

Planning Steps of the Planning/Control Cycle

1. make the plan 2. carry out the plan

7 behaviors of effective managers

1. personally/intensly engaged 2. realistic 3.few clear priorities/goals 4. emphasize accountability and follow-up 5. reward top performers more 6. develop talents 7. authentic, self-aware, humble, display self-mastery

disadvantages fo matrix structure

2 bosses- power struggle, conflict of interest 2 goals increase overhead and reduce efficiency use of teams- diffusion of accountability

perf management cycle can improve employee productivity by......, profitability by....., and raise engagement scores by ....., and reduce turnover

20% 48% 30%

Control Steps of the Planning/Control Cycle

3. control the direction by comparing results with the plan 4. control the direction by taking corrective action

2 popular appraisal types

360 degree assessments forced ranking performance review systems

performance appraisal method in which employees are appraised not only by their managerial supervisors but also by peers, subordinates, and even themselves

360-degree assessment

every .......... mnagers and subordinates should come together and compare objectives to actual performance (MBO)

6months to a year

Obligation to report and justify work results to higher ups

Accountability

Reintroduction of a familiar practice- least costly, least threatening least complex type of change

Adaptive change- example- longer holiday hours

External focus and values flexibility. Adaptivity, creativity, and flexibility in the face of change. Eg innovative companies, startups . Poor customer satisfaction, good operational efficiency, weak money success

Adhocracy culture

Kotter step that corresponds with Lewins refreezing change

Anchor new approaches in the culture

Founders values, the industry and business environment, the national culture and the senior management's vision and behavior

Antecedents of culture

The rights inherent in a managerial position to make decisions, give orders, and utilize resources are known as ____.

Authority

Managers use info that is readily available from memory to make judgements. Judge more recent info to be more accurate

Availability

9 biases

Availability, confirmation, representative, sunk cost, anchoring and adjustment, overconfidence, hindsight, framing, escalation of commitment

means of evaluating business units based on growth rate and market share

BCG Matrix

Invisible or preconscious core values that are meant to guide perception and behavior. taken for granted and hard to change.

Basic assumptions

Person with a .... style is people oriented and works well with others

Behavioral

This decision maker tried to avoid conflict, shows concern for others is receptive to suggestions and prefers info to be communicated in person rather than in writing

Behavioral

Managers realize they have lost, so they file bankruptcy or sell the company

Capitulation to irrelevance or death

Higher level managers make decisions in this type of authority

Centralized

The way in which an individual or organization moves from a current unsatisfactory to satisfactory desired state

Change

During this Lewin second stage of change, managers give employees the tools they need to change, including structure, culture and process

Changing

Culture with internal focus and values flexibility rather than stability. Values cohesion, job satisfaction, collaboration, employee development and commitment. Ex. Family business like duck dynasty . Less positive employee behavior, because they don't emphasize focusing on tasks. Work attitudes are high. Operational efficiency higher, less successful money wise. Higher customer satisfaction

Clan culture

7 Common elements of all organizations

Common purpose, coordinated effort, division of labor, hierarchy of authority, span of control, authority, centralization of authority

Framework of organizational cultures that compares culture based on two dimensions: whether they have an internal focus and promote integration or an external focus and promote differentiation; and whether they promote flexibility and discretion or stability and control

Competing values framework

Narrow spans of control- manger in charge of few employees

Complex or specialized tasks

A person with ... style takes a socially oriented humanistic and artistic approach to problem solving

Conceptual

This decision maker takes risks, develops creative solutions, enjoys new ideas, and relies on intuition and discussions with others

Conceptual

This decision makes tends to have a broad perspective, considering many options and focusing on the long term

Conceptual

Creation of a product or service that modifies an existing one. Ex. New technology in smartphone

Core innovation (incremental innovation)

John Kotters eight steps to organizational change to avoid errors

Create a sense of urgency, create a guiding coalition, develop a vision and strategy, communicate the change vision, empower broad-based action, generate short-term wins, consolidate gains and produce more change, anchor new approaches in the culture

The Kotter steps that correlate with Lewins unfreezing stage

Create a sense of urgency, create a guiding coalition, develop a vision and a strategy, and communicate the change vision

Collective beliefs, assumptions and general feelings about what is good, valuable, rational and normal in an organization.. Important for the ASA(attraction, selection, attrition) model of hiring new employees.

Cultural values

Decisions are made by middle level and supervisory- level managers to whom higher managers have delegated power

Decentralized authority

Mental shortcuts that can lead to faulty or ineffective decision making

Decision making biases

Manager can't find good solution and procrastinates, passes the bucket, or denies risk of any negative consequences. Negative because they involve a denial of responsibility

Defensive avoidance

Process of assigning responsibilities to lower rank employees

Delegation

Population is aging, increased diversity in the workforce

Demographic changes

Outside factors that force an organization to change

Demographic changes, changes in the market, technological advances, shareholder and customer demands , supplier practices and social and political pressures

Managers miss the warning signs and are unrealistic and slow to adapt

Denial of risk and peril

Wide spans of control

Easier for standardized tasks

Globalization impacts how work is being done, and other countries will work for lower wages, leading to fragmented supply chains and modular organizations

Effect of China and India

Causes of employee resistance to change

Employee characteristics (perceptions, individual differences, likely actions), change- agent characteristics (managers perceptions), change agent- employee relationship (trust essential)

The Kotter steps that correlate with Lewins changing stage

Empower broad based action, generate short term win, consolidate gains

Values and norms actually exhibited by the organization eg. Chick FilA still gives employees Sunday off even after founder died

Enacted Values

Explicitly stated values of an organization. Eg CHIKfilA values Sunday off for employees

Espoused values

Final stage of change- managers gather information about whether the change was successful

Feedback stage

Four qualities of a long term successful organization

Flexible, creative, adaptable and innovative

Ways to FOSTER innovation

Formulate an innovation strategy, gain commitment from top managers, foster an innovation- inspired company climate, construct the necessary organizational structure and process, acquire essential human capital, establish appropriate policies, procedures, and human resource practices, procure the resources needed

How to strengthen corporate culture

Founders and leaders rewards, stable workforce, stay in touch with mentors and influencers in the cultural network, use proper selection techniques to hire people and use socialization to familiarize new hires with values and expected behaviors.

Company's performance suffers and managers are looking for bold rescue strategies to pull them out

Grasping for salvation

Socialization, mentoring, decision making, group dynamics, communication, empowerment and leadership are types of organizational structure that affect

Group and social processes

report listing an org's employees, tracking each indiv's education, training, certifications, experiences

HR inventory

Behavioral example

Herb kelleher (Southwest)

Methods by which employees learn culture and it is reinforced

Heroes (Sam Walton, founder of WalMart); Stories (Southwest Air founder arm wrestled to win the ownership of a slogan); Rituals (ceremonies); Material symbols ( WalMarts no frills corporate headquarters waiting room is a symbol of the no frills ideals of the company)

Internal focus, values stability and control. Control mechanisms in place to ensure efficiency, effectiveness. Successful in a stable market. Bureaucracies, government agencies, McDonald's. Weak relationship to positive employee behavior, high levels of control over employees, boredom. Poor customer satisfaction, poor operational efficiency, make more money.

Hierarchical culture

Matrix vs Horizontal

Horizontal more efficient and flatly organized with cross- functional teams. Matrix structure merges employees from different divisions but retains a strict chain of command.

The company's success makes employees and managers overconfident and arrogant

Hubris born of success

Jim Collins five stages of institutional decline

Hubris born of success, undisciplined pursuit of more, denial of risk and peril, grasping for salvation, capitulation to irrelevance or death

Manager can decide to decide based on his determination of 3 things

Importance Credibility Urgency

What is the motivation for change

Improve an existing state- organizations anticipate and adjust to change to be successful

The basis for Product, process and market changes

Innovation

The process of coming up with new ideas and converting them into useful applications. Dr Archambeau emphasized that this is NOT INVENTION, which is creating something new. It must be useful. It is NOT CREATIVITY- which involves advancing new ideas into reality

Innovation

Introduction of a practice that is new to the organization but may be employed elsewhere in the industry medium threat, medium cost.

Innovative change- Ex. Electronic medical records

First step of systems approach to change- change impacts the planning process, including mission statement, vision statement, strategic plan and analysis of its change readiness why should we change?

Inputs stage -

the problem solving process

Intelligence design choice implementation monitoring

As computers and IT replace skilled workers, knowledge workers are becoming important

Knowledge as a competitive advantage

This type of manager has the authority to make decisions, have profit- loss responsibility, and have people report to him. Solid vertical line in the chart. Ex CEO, president

Line manager

idea is that lower-level employees qill be more committed to a goal if they are involved in setting it

MBO

proactive results-oriented appraoch that allows indiv at all levels of the org to collaborate and participate in goal-setting process

MBO

Strong external focus, driven by competition, values stability and control. Profits and productivity more important than job satisfaction and employee development. Ex. Amazon- data driven , focused on goal attainment. Higher customer satisfaction, good operational efficiency, more successful money wise.

Market culture

Voluntary collectives with the purpose of advancing their members' interests are known as ___.

Mutual benefit organizations

formed to offer services to some clients, not to make a profit

Nonprofit organizations

How to avoid IMPEDE innovation

Not implementing ideas, distinguish preventable from uncontrollable failures, avoid blaming employees for external sources of failure, not be reluctant to experiment, avoid self-serving bias

Physical manifestations of culture- ie, dress code, behavior of managers, office decor- visible, but often indecipherable

Observable artifacts

Three layers of organizational culture

Observable artifacts, values, and basic assumptions

A system of consciously coordinated activities or forces of two or more people is known as a(n)

Organization

Determined by the organizations structure, culture and Human Resource management system

Organizational Architecture

Establishment of optimal organizational structures tat will establish accountability and responsibility and ultimately help the firm achieve its strategy. Three types include traditional, horizontal, and open boundaries

Organizational Design

Combination of observable artifacts, espoused and enacted values, and basic assumptions of an organization

Organizational culture

A system of shared beliefs, conventions, norms, behaviors, expectations, and symbolic representations, the social glue that guides employee behavior- informal control mechanism

Organizational culture (Corporate culture) ex Uber run like a frat- sexual harassment, verbal abuse

All aspects of organizational culture result in THIS regarding levels of effectiveness, innovation and stress

Organizational outcomes

system of tasks, reporting relationships, and communication linkages that motivate members to work together. Managers decide division of labor, chain of command, and how workers coordinate with each other

Organizational structure

Organizational design and the reward systems in place

Organizational structure an practices

Two challenges facing managers in their organizing role

Organizational structure and culture

Third stage of the systems approach to change- once target elements identified, change can occur at the organizational level, the group level or the individual level, or all three. what do we want from the change?

Outputs stage-

Reaction in which manager is so frantic to get rid of problem that he can't deal with the situation realistically.

Panic

Common areas that need change

People, technology, structure, strategy

Key reasons employees resist change

Predisposed to avoid change, fearful of unknown, climate of mistrust, fear failure, afraid they will lose job security, influenced by peers resisting change, afraid the change will disrupt cultural traditions, personality conflicts, wrong timing, rewards not enough

Inside factors that drive organizational change

Problems with employees and behavior of managers

A change in the way a product or service is conceived, manufactured or disseminated. Ex. Internet has reshaped the way people consume media

Process innovation

A change in the appearance or performance of a product. Ex. New models of cameras that improve on the original model

Product innovation

Types of innovation

Product, process, core, transformational

Functions of an organizational culture

Provides organizational identity, facilitates collective commitment, promotes social system stability, provides direction

Employees are ranked by other employees and must defend themselves in order to keep their position . Ex Amazon

Purposeful Darwinism

Factor that is Not affected by type of organizational culture

Quality

Large organizations can't move fast enough to compete with more nimble companies, eg brick and mortar suffering from online shopping

Radical innovation is hurting traditional companies

Introduction of a practice new to the industry most costly, complex and uncertain type of change

Radically innovative change-

During this last stage of Lewin, the changed attitudes and behavior are integrated into employees normal way of doing things. Integrate change into standing plans and reward desired behaviors

Refreezing

manager realizes that complete inaction will have negative consequences but opts for the first available alternative that involves low risk. Satisficing

Relaxed change

A manager decides to take no action in the belief that there will be no great negative consequences. Complacency

Relaxes avoidance

Subordinates should recognize the managers authority to assign.....which is the obligation to perform assigned tasks.

Responsibility

Use innovation to jumpstart growth organically, restarting r&d, developing products in emerging countries and distributing globally

Reverse innovation

Current marketplace trends in organizational change

Segmentation and nice products, targeted products with shorter time to market, radical innovation that hurts traditional companies, effect of China and India, and knowledge as a competitive advantage

One trend is that organizations no longer cater to mass markets, offering a wide variety of products to more specific groups of customers

Segmentation and niche products

THIS involves two processes: learning process to establish an understanding of workplace dynamics, and adjustment process to fit in to the work roles, team norms and cultural values

Socialization

Provide advice, recommendations, and research to line managers. Dotted horizontal lines. Support personnel Ex. Legal counsel, HR

Staff personnel

Conceptual style example

Steve Jobs

How do managers develop proactive change?

Survey the external environment, gather competitive intelligence to anticipate trends

Second stage of systems approach to change- managers diagnose problems and generate solutions by considering the FOUR target elements or LEVERS for change: people, organizational arrangements, methods and social factors what levers can we pull to produce the change?

Target elements of change-

Companies are trying to beat competitors by being the first to market

Targeted products with shorter time to market

planning process loop 8 tasks

Task 1: vision, mission and Goals Task 2: opportunities and threats Task 3: strengths and weakness Task 4: strategies Task 5: strategic plan Task 6: tactical/operational plans Task 7: Control and diagnose results Task 8: Continue planning

This type of organizational design involves vertical management hierarchies and clear reporting relationships. Includes simple structure, functional structure, divisional structure and matrix structure

Traditional design

Creation of a product, service or technology that creates new markets of customers. Ex. MP3 music over LP records

Transformational innovation (radical innovation)

Companies overextend themselves and start to take major risks in areas they shouldn't

Undisciplined pursuit of more

Managers stir up motivation to change by encouraging workers to give up old ways of doing things in this first Lewin stage of change more radical change takes longer

Unfreezing -

framework for analyzing the competitive strategic potential of a resource or capability

VRIO

Collective attitudes and behaviors affected by social processes of a firms culture

Work attitudes, motivation, and job satisfaction

How to stand out at a new job and adapt quickly to a corporate culture

You only get one chance to make a first impression; come in early and stay late; get to know your coworkers; be open to feedback; and over-deliver

formulating the firm's strategic plan is a critical step in the planning process because it provides the org with ...

a basic game plan, the overall blueprint for how the org will achieve its goals

real-world decision makers often use ......... decision making appraoches

a combination of these

company acquires competetive adv id it can achieve

a fit among its core activities

3 most prevalent employment tests

ability performance personality

assesses the general physical, mental, clerical abilities of applicants

ability tests

barriers to entry include (10)

absolute cost advantages switching costs proprietary products or learning curve access to inputs & distribution brand identity capital req govt policy economies of scale technology expected retaliation

cost-leadership requires a business to have (6)

access to capital, process engineering skills, tight cost controls, job specialization, frequent reports, incentives for reaching quantitative goals

segments customers who are accessible in different ays rather than on actual differences between them

access-based

set objective jointly- a back and forth negotiation will ensure that gals are .... yet ....

achievable yet challengin

diversification achieved through (3)

acquisitions and mergers joint ventures and strategic alliances internal development

operating pan should escribe the company's .... and the ..... objectives of each activity

activities short-term

nonrational models of decision making explain how managers, who do nto have full knowledge of the environment and future outcomes,

actually make decisions

discrimination- employement practice or procedure negatively affects a protected class of indiv

adverse impact

achieving equality of opportunity within an org

affirmative action

restricts mandatory retirement and prohibits age discr

age discrimination in employment act

virtual structure adv

allows a firm to tap into different knowledge pools and talent pools without geographic barriers; lower fixed costs due to no rent; less time and money need for travel because of multiple locations.

prohbits discr based on disability and requires employer to make reasonable accomodations

americans with disabilities act

growth rate deals with how fast ..... is growing while market share is concerned with .....'s share of the market related to competitors shares

an entire industry a unit's

a person with a.... style carefully considers a lot of information and alternatives, which means that it takes him or her longer to make the decision.

analytical

this kind of decision maker responds well to new situation and is more willing to be innovative

analytical

the tendency to make decisions based on an initial figure

anchoring and adjustment

involuntary emotional response to a situation, opporunity, object or person that can also drive intuition

automated experience

3 selection tools

background information, interviewing, and employment tests

4 guiding principles for MBO

be on the same page goal attainment more likely when emphasis is on results on a time scale more motivated when they participate in meaningful work and held accountable for results can't measure progress if don't set the goal

satisficing model is a .... model

behavioral

exploration into what applicants have actually done in the past

behavioral-description interview

rates employee performance according to scales o specific behaviors

behaviorally anchored rating scale

prcoess of a company evaluating its own performance based on how it compares with the performance of high-performing org

benchmarking

focus should no be on who is currently in the position but who will ....

benefit the firm in the future

bcg matrix developed by

boston consulting group

advantages of MBO

bottom up and top down goal setting more committed, buy in to strategy of company focuses on steps needed to achieve broad org goals

Fluid, highly adaptable organization whose members , linked by IT, come together to collaborate on common tasks; includes competitions, suppliers, and customers. Includes hollow, modular and virtual structures.

boundaryless org

ability of decision makers to be rational is limited by numerous constraints

bounded rationality

differentiation requires marketing to emphasize.... (5)

branding product engineering product R&D strong coordination incentives for reaching qual goals

access based positionign is used to serve the

broad needs of many customers

describes firm;s position, operations, competitive advantage, marketing strategy, method of financing, expected revenues and expenses

business model

outline of how an org will deliver its value proposition

business model

blueprint for action that details how an org is going to realize its goals through its strategic plands and its operating plans

business plan

written doc that defines the firms objectives strategy and measures of success

business plan

managers should ..... questions marks to determine if they will grow inrto stars or diminish into dogs

carefully analyze

structuring objectives in a unified hierarchy becoming more specific at lower levels in the org.

cascading objectives

eventually this market will mature and revenue stream will dry up

cash cow

low growth but high market share . Finance stars and question marks

cash cows

in rational model the problem is known and criteria to evaluate alternatives are known and managers consciously strive for

certainty and to achieve the maximum benefit

reasons for planning

check progress coordinate activities forward-thinking deal with uncertainty

in the .... step the decision maker has to pick the most viable course of action

choice

strengthens civil rights act of 1964 by increasing damages and dhifting burden of proof to employer

civil rights act of 1991

negotiations between management and employees about disputes over copensation, benefits, woring conditions, and job security

collective bargaining

3 things to have in place for MBO to be a succes

commitment of top management organization-wide commitment cascading objectives

5 tools to convert org's vision into a grand strategy

competitve intelligence swot analysis forecasting benchmarking porter's model for industry analysis

intuition is NOT a substitute for rational decision making- it is a

complement

the ..... of modern life requires us to make more decisions than ever

complexity

when a person seeks information that supports his point of view and discounts data that do not

confirmation bias

allows employees to retain their health insurance coverage for a period of time after being laid off

consolidated omnibus budget reconciliation act (COBRA)

Creation of alternative hypothetical but equally likely future conditions is called

contingency planning (scenario planning)

managers make decisions about when and how much to control organizational activities, what deviation from the goal is "significant", and what kind of management info system the org should use

controlling

....-level strategy designates what markets or industries a firm will compete in, while .... level strategy designates how a firm will be successful in each of its markets

corporate business

2 ways to take corrective action (plan/control cycle)

correcting deviations in current plan improving future pans and returning to first step in cycle

.... strategy is used to keep the costs, an hence the prices, o a product or service below those of competitors an to target a wide market . focus on efficiency of process

cost-leadership

porter's 3 underlying principles of strategic planning

creating a unique and valuable position competitve trade-offs creation of a fit among activities

porter- best way of thinking about copetition is by focusing strategy on

creating a unique org

internal staffing involves filling positions with

current employees

people with greater knowledge and expertise often find it difficult to see things from a less-informed person's point of view

curse of knowledge

a manager agrees that he or she must decide what to do about a problem or opportunity and take effective decision-making steps

deciding to decide

choice made from available alternatives

decision

process of identifying problems or opportunities and choosing appropriate courses of action for resolving them

decision making

reflects how an individual perceives and responds to info

decision making style

drawbacks- perfectly rational decision making is almost impossible in the real world, due to a number of hindrances

decisions are too complex time/money constraints prevent gathering all relevant info before deciding different cognitive capacities, values, skills- impossible to make same objective decision even with same info face risk, uncertainty, imperfect info, and info overload face conflicting goals, have to placate org stakeholders with different priorities

grand strategy that involves a reduction of the org's efforts

defensive

strategic planning 5 steps

define/clarify mission/objectives assess environ for threats/opportunities assess internal strengths/weaknessess consider alternative strategies using compet analysis choose a strategy

in the ... step the decision maker has to think about the various courses of action

design

porter- competition is not about being the best, the best leads to

destructive competition

strategic management process involve managers from all parts of the org in carrying out these 5 steps

determine mission, vision, values statement examine current reality by assessing environment devise grand strategy, strategic, tactical, operational plans execute strategy by following plans evaluate plans and alter

educating professionals and managers in the skills they need to do their jobs in the future

development

needs-based works best when groups of customers have .... needs, and a narrowly tailored set of activities cna best serve those needs

different

.... strategy tends to lead to a higher price point than competitors but customers are willing to pay more for more perceived value

differentiation

....strategy is used to offer products or services that are of unique and superior value compared to those of competitors and to target a wide market

differentiation

a firm can mitigate the negative impacts of competition by .....

differntiating itself from the competition

virtual structure disavantages

difficult to have behavioral norms or a strong culture.

Disadvantages of horizontal structure

difficulty separating the organization's activities into "process" and "no process" , it could lead to Cinderella problem- non-process individuals feel left out, emphasis on the cross-functional team can get in the way of functional specialization, managers may perceive a loss of turf and try to inhibit horizontal collaborations.

a person with a ... style is efficient, practical, systematic, action-oriented, and decisive

directive

this decision maker largely focuses on facts, prefers clear-cut solutions, is concerned about the short run, and exercises power and control

directive

this decision maker makes quick decisions without considering any alternatives, and generally relies on existing rules

directive

discrimination- org intentionally treat indiv from protected groups differently

disparate treatment

company operates several businesses to spread out risk

diversification strategy

firms should....... from dog markets

divest (eliminate)

advantages of divisional structure

divisional groupings make greater focus possible coordination is built into structure allocate resources to approp divisions in most attractive markets clear accountability

MBO Cascading obj- Org objectives are the broadest and are translated into .... then....then

divisional objectives, then departmental, then individual

people with diverse occupational specialties are put together in formal groups by similar products, customers or geographic regions

divisional structure

have low groth and market share

dogs

4 building blocks of competitive advantage

efficiency, quality, innovation, responsiveness to customers

impulsive and largely unconscious, guided by habits and intuition

emotional (nonrational)

decision makign in the real world is difficult because 2 competing models for decision making

emotional (nonrational) rational

managers perform a job analysis, write a job desription, and write a job specification to determine current .....

employee needs

consist of any proceure used in the employment selection decision process

employment test

to keep a strategic plan on track

engage people, keep it simple, stay focused, keep moving

established by Title VII of civil rights act, enforces antidiscrimination and other employment-related laws

equal employment opportunity commission

prohibits employers from paying males and females differently for substantially equal work

equal pay act

increases his commitment to a project, spending more time and effort on it despite negative info about the probable outcome

escalation of commitment bias

using questionin analysis and follow through to mesh strategy with reality, align people with goals, and achieve promised results

execuftion

explicit and tacit knowledge regarding a given situation, decision opportunity, object, or person

expertise

havign a strategy helps managers determine how to

exploit core competencies deliver value to customers build synergy in org operations

A good strategic plan gives an assessnent of

external environ how much managers understand existing markets how to cultivate business

banned child labor and established min living standards for workers engaged in interstate commerce. including the establishment of a max workweek and a federal min wage

fair labor stanards act

requires companies to provide up to 12 weeks of unpaid leave for adoption, family emergenices, or childbirth

family and medical leave act

strategic control- managers use a ...... to reformulate plans, rethink policies, and take corrective action

feedback loop

The benefit of a Single-Product Strategy:

focus on 1 product

Formed to make money, or profits, by offering products or services

for-profit organizations

appraisal involves a ranking of all employees in a business unit against one another and the distribution of scores along some sort of bell curve

forced ranking perf review system

vision or projection of the future used to determine strategies going forward

forecasr

.... appraisals are conducted at specific times throughout the year and are basd on perf measures ha have been established in advance

formal

unduly influenced by the way a problem or situation is presented

framing bias

structure in which people with similar occupational specialties are put together in formal groups. focused on efficiency and is best for small firms or firms with programmatic focus

functional structure

specific commitments to achieve a measurable result within a stated period of time

goals

rational model assumptions

goals are well-established, problem is well-defined and unambiguous decision maker is rational and uses logic no time/cost constraint operates in environment of perfect info/certainty knows all criteria for evaluating alternatives preferences are clear, constant, stable knows consequences of all alternatives final choice maximizes benefit of firm

how the org will accomplish its mission

grand strategy

grand strategy that involves expansion (sales rev, market share, # of employees, # of clients served)

growth

3 grand strategies

growth, stability, defensive

- central core of the organization is complemented by outside independent firms that provide outsourced goods and services and are linked to the central core via computers. Also called a network structure. Uses a lot of IT. Ex. Ike, Reebok, Visio.

hallow structure

informal appraisals are beneficial

happen more regularly- prevent surprises provide support receive feedback and adjust goals

disadvantages of functional structure

hard to communicate between functional groups focused on success for unit, lose sight of org overall goals breakdown of processes across functions

prohibits group plans from dropping sick employees and allows worjers to get new coverage when they change jobs

health insurance portability accountability act

a person with.... tolerance for ambiguity is comfortable with ambiguity and lack of control, and is able to thrive in uncertain situations

high

sources that influence supplier bargainin g power (5)

high switching cost for buyer buyer need of specialty product differentiation of inputs threat of forward integration importance of volume and cost relative to total industry purchases

view past events as more predictable than they really were. decisions usually seem easier and clearer in hindsight

hindsight bias

when a person bases a decision on his or her expertise

holistic hunch

use of temporary or permanent teams o break down internal boundaries and improve collaboration

horizontal design

sexual harrassment- intimidating or offensive work environment is created

hostile environ

nonrational model assumes that managers are

human beings making decisions in a risky or uncertain environment

The economic or productive potential of employee knowledge and actions is called

human capital

The activities managers perform to plan for, attract, develop and retain an effective workforce are called

human resource management

operational efficiency (is or is not) sufficient to be the sole driver of a company's decision making

id not

4 steps in rational decision making process

identify problem or opportunity generate alternatives evaluate alternatives/pick 1 with max benefit implement solution and evaluate it

implementation process 3 steps

implement strategy through structure, system, operational processes set up control and eval systems feedback to planning

once the decision is made it must be... and then ... to see how well it worked

implemented monitored

3 types of objectives in MBO

improvement personal development maintenance

define the performance level that is to be accomplished for a specific area in a specific way

improvement objectives

....appraisals are conducted on an unscheduled basis and consist of less rigorous assessmens of employee performance

informal

understanding that real world decision makers often satisfice allows you to better understan the .... that mangers face

inherent biases and limitations

firm must constantly....

innovate

in the .... step a decision maker has to collect info about the problem

intelligence

decision making steps in problem solving process

intelligence design choice

makes sure company gets all added value of a new product but is time consuming and may be liited to a firm's lack o knowledge or capabilities

internal development

swot internal and external factors

internal- strengths and weaknesses external- opportunities and threats

decision makers make decisions based on gut feelings, subconsciously influenced by experiences, values, emotions

intuition

making a choice without the use of conscious thought or logical inference

intuition

stars can become cash cows and managers should .... to achieve more growth

invest

used to determine, by observation and analysis, the basic elements of a job

job analysis

summarizes what the holder of the job does and how and why

job description

orientation gives info about

job routine mission and operations work rules and benefits legal environment

describes the minimum qualifications a person must have to perform the job successfully

job specification

allow companies to enter new markets more quickly and without a large investment, but involve sharing rewards and require trust

joint ventures and strategic alliances

mental shortcuts managers use because they face constraints that prevent them from making perfectly rational decisions

judgemental heuristics

directive decision maker example

ken kutaragi (playstation)

people whose work's main function or concern involves generating or interpreting info rather than manual labor

knowledge workers

managers make decisions about how to lead, motivate employees, stimulate productive conflict and maximize employee productivity

leading

firms must operate within the various constraints of the HRM environmen

legislation societal trends changing technology

rational model assumes that managers are

logical decision makers who strive to ake the optimal decision and always act in organization's best interest

a person with .... tolerance for ambiguity needds a high degree of structure and control in his or her life and decisions, and thus tends to find ambiguous situations stressful

low

to keep employees with the right human capital and those who the org has invested in training, an org should strive to have .... turnover

low

adv hallow structure

lower costs, lower overhead lower capital expense; firm can pursue best source of specialization from suppliers; suppliers respond to market forces with lower cost and better quality; firm can lower costs making it more competitive; can easily change production process by switching suppliers.

show intent to keep performance at levels that were previously established

maintenance objectives

as a result of assumptions of nonrational model, managers often find it difficult to

make optimal decision

Adv. of Matrix Structure

manage multiple dimensions communication built into system- flexibility use employees for projects + traditional functional work

process with the purpose of motivating subordinates to achieve org goals

management by objectives

employees report to 2 bosses- functional manager and project manager

matrix structure

structure that combines functional and divisional chains of command in a grid so that there are 2 command structures- vertical and horizontal

matrix structure

the hierarchy of organizational goals constitutes the .... that lead to the accomplishment of the ...-- higher level goals

means ends

allow a company to quickly expand its reach and enter a new market while still mainting management control. Expensive and requires integrating 2 company cultures

mergers and acquisitions

world's leading expert on competitve strategy

michael porter

managers should.... cash cows

milk- not investing very heavily in r&d

organization's goals are shaped by its... .... and ... (3)

mission vision values

planning process 6 steps

mission statemnt vision statement values statement strategic planning operational planning

organizations reason for operating

missionsstatement

- a structure in which a firm establishes product chunks, or modules, - provided by outside contractors. The "hollowest of hollow" structures. EVERYTHING is OUTSOURCED - Seen in medical field. Doctor's office outsources labs. Boeing tried to use structure when building Dreamliner-the pieces didn't fit together though!

modular structure

enforces procedures whereby employees may vote to have a union and for collective bargaining

national labor relations board

nonrational models assume that decision making is .... making it difficult for managers to

nearly always uncertain and risky make optimal decisions

training questions to ask

necessary? objective? what method is most likely to achieve obj? how to implement? is it working?

attempts to serve most or all needs of a particular group of customers

needs based

succesfful compnies regularly reconfigure their assets and capabilities to ensure resources are being used to best take advantage of ..... or to minimize ....

new opportunities threats

modular structure - Disadvantages:

not all products can be "chunked"; different modules might not fit together; entire process only as fast as the slowest supplier.

appraisals are either ... or...

objective subjective

(rational model) when these assumptions are met the decision maker can ..... and .....

objectively evaluate each alternative choose the alternative with the maximum benefit

sets mandatory health and safety standards to which organizations must adhere

occupational safety and health act

strategic planning is ..... of the overall process of the planning function

only part

planning by frist line managers for periods of 1-52 weeks

operatinoal planning

the firm must treat....... as a given; strategic success is impossible without it

operational effectiveness

..... is performing tasks better than you competiios, while ..... is a plan for effectively competing in the market

operational efficiency strategy

set by and for first-line managers and are concerned with short-term matters associated with realizing tactical goals

operational goals

environmental factors hat he org may exploit for competitive adv

opportunities

managers make decisions about the chain of command, degree of centralization, job deisgn, org structure

organizing

disadv hollow structure

outsource firms may end up being competitors.

the benefit of being able to use satisficing to make quick decisions often ..... the benefit that would result from the perfect decision

outweighs

occurs when people have more subjective confidence in their decision making than their objective accuracy. blind to their own blindness and are more confident than they should be

overconfidence

requires firms with 50 or more employees to provide health care coverage without a govt subsidy or face a fine

patient protection and afordable care act

HR should be involved in every aspect of business meetings. organizations need the right .... to be effective and efficient

people

3core processes of execution

people strategy operations

FOUR target elements or LEVERS for change:

people, organizational arrangements, methods social factors

assessing an employee's performance and providing the employee ith feedback

performance appraisal

continuous cycle of improving job performance through goal setting, feedback and coaching, and rewards and positive enforcement

performance management

making products that have targets that are defined in similar performance variables

performance management

assesses the applicant's performance on actual job tasks

performance tests

define the personal goals that are to be fulilled

personal development objectives

measures personality traits, like need for achievement, eergy, emotional intelligence, ability to be a team player, sociability

personality tests

managers make decisions about the firm's objectives, strategies, and goals

planning

setting goals and deciding how to achieve them

planning

continuous feedback loop for each level of planning

planning/control cycle

outlines general response to a designated problem or situation

policy

once the ..... has been established, you can start seeking out the .... necessary to create and avantage, finally, you must efficiently .... these resources so that you can deliver your product or service

position resources organize

Managers should be ............- planned change in anticipation of possible threats, rather than .........- change in response to a crisis

proactive vs Reactive change

outlines response o a particular problem or cicumstance

procedure

encompasses a range of projects or activities

program

single use plan that encompasses a smaller range of tasks or activities than a program

project

3 reasons strategic management is important

provide direction and momentum encourage new ideas help develop a sustainable competitive adv

new ventures with a high market groth rate but low market share

question mark

(satisficing) these commonly accepted guidlines or procedures for finding a "good" solution make decision making ....... but they can also lead to .... decisions made on a case by case basis

quicker and less costly suboptimal or inconsistent decisions

sexual harrassment- tangible economic injury

quid pro quo

..... model is a good starting point for understanding how decisions should be made in a perfectly logical, unemotional world

rational decision making

analytical but slow to act

rational decision making

... diversification occurs when an org operates, under one ownership, several separate business that are related to one another

related

Organizational architecture establishes

relationships among employees, formal reporting relationships, standing plan(long term plan not expected to change)

4 ineffective reactions to a decision situation

relaxed avoidance, relaxed change, defensive avoidance, panic

2 legal considerations for employment tests

reliability validity

tendency to generalize from a small sample or a single event

representative

making products that involve the same type of management, capital investment, production or similar sources of risk

resource allocation

3 corp management taks that influence a related diversification decision

resource allocation strategy formulation performance management

designating specific required action

rule

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

satisficing

first proposed by herbert simon who believed that managers 'ability to act logically was bound by many restictions such as complexity, time and money constraints, imperfect info, info overload, conflicting goals, and differences in terms of cognitive capacity

satisficing

major non rational models

satisficing intuition

Kotter Eight steps must be handled ........ for the change to be most effective

sequentially

2 approaches to needs-based positionin

serving the broad needs of a few customers serving the differing needs of similar customers

4 steps in MBO process

set objectives jointly develop an action plan review performance periodically appraise performance and give rewards

swot is useful becaus eit helps managers

set realistic goals improve their capabilities in probelm areas establish plans to overcome weaknesses exploit strengths turn threats into opportunities

most important in developing an actio plan- MBO

setting a time scale

rational model (classical model) explains how managers....

should make decisions

structure with centralized authority, a flat hierarchy, few rules, and low work specialization. firms in their earliest stages tend to use this

simple structure

3 approaches to operational planning

single use standing management by objectives

corporate-level strategy- company can choose either ....strategy or .....strategy

single-product diversification

a company makes and sells only one product within its market

single-product strategy

plans develope for activities that are not likely to be repeated in the future. includes projects and programs

single-use plans

2 types of structured interviews

situational and behavioral

interviewer uses hypothetical situations to test the cnadidate's ability to do the job and to operate under pressure

situational interview

The economic or productive potential of strong, trusting, and cooperative relationships

social capital

- modular structure Advantages:

speeds up production and lowers cost; firm can gain from other company's competencies; shop for the best supplier; experiment by combining modules in different ways.

grand strategy that involves little or no sig change

stability

plans developed for activities that occur repeatedly over a period of time. includes rules, procedures, and policies and allows for consistency and efficiency

standing plans

high growth industry and have high market share

stars

a firm's growtg prosperity or failure depends on .... made by top managers

strategic and financial decisions

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

strategic control

set by ad for top maagegement and focus on objectives for the org as a whole

strategic goals

process by which managers design the components of a HRM system to be consistent with each other, with other elements of org architecture, and with org's strategy and goals

strategic human reource management

consists of feveloping a systematic, comprehensive strategy for understanding current employee needs and predicting future employee needs

strategic human resource planning

5 step process for formulating and implementing strategies

strategic management

process that involves managers from all parts of the org in the formulation and implementation of strategies and strategic goals. should involve middle managers

strategic management

top managers formulate longterm plans with knowledge that the environment is ever changing and increasingly competitive

strategic plannign

planning by top mnagers for periods of 1-5 years

strategic planning

2 main stages of strategic formulation process

strategic planning implementation

swot analysis

strategic planning tool that involves the search for strengths, weaknesses, opportunities, and threats affecting the org

"performing different activities from rivals, or performing similar activities in different ways"

strategic positioning

attempts to achieve sustainable competitve adv by preserving what is distinctive about a company

strategic positioning

a large-scale action plan that sets the direction for an organization

strategy

making products that have similar key success factors, are in similar stages of the industry life cycle, or occupy similar competitve positions

strategy formulation

putting strategic plans into effect

strategy implementation

internal skills and capabilities that give the org special competencies and competitve adv in executing strategies in pursuit of its mission

strengths

asking each applicant the same questions and comparing their responses to a standardized set of answers

structured interviews

managers add up all the money already spent on a project and conclude that it would be too costly to simply abandon it

sunk cost

vertical integration should leverage a firm's competitive advantage and create .... whenever possible

synergies

diversification is only beneficial when 2 companies can achieve....

synergy

total effect is more than ech could achieve on its own

synergy

set by and for middle managers and focus on actions needed to achieve strategic goals

tactical goals

planning by middle managers for periods of 6-24 months

tactical planing

strategy will impact ..... as well as ....

the market competitors' strategies

operations strategy is put in place to ensure that all tasks a company performs are

the right tasks

Porter's 5 forces of competition

threat of new entry suppliers bargaining power buyers bargaining power threats of substitute products competitive rivalry

environmental factors that hinder an org achievement of a competitive adv

threats

disadvantages of planning

time consuming plans go obsolete quickly

disadvantages mbo

time-consuming managers have stronger negotiating position because of authority

prohibits discr based on race, color, sex, religion, national origin

title vii of civil rights act

educating technical and operational employees in how to better do their current jobs

training

hypothetical extension of a past series of events into the future

trend analysis

2 kinds of forecasting

trend analysis contingency planning

Kurt Lewin's three stages of change

unfreezing, changing, refreezing

matrix structure violates the traditional concept of .........principle that states that an employee should report to no more than one manager, to avoid inconsistent priorities or conflicting demands

unity of command

disadvantage of a divisional structure

unnecessary an costly functional duplication loss of control- different approaches hard to maintain unified identity and org culture

....diversification occurs when an org, under one ownership, operates several unrelated businesses

unrelated

2kinds of diversification strategies

unrelated related

asking probing questions to find out what the appklicant is like

unstructured interviews

having a strategy matters in effectively ..... and determing where to invest....

utilizing resources time and effort

VRIO 4 questions

value rarity imitability organization

whether a person focuses on people and social concerns or task and technical concerns when faced with making decisions

value orientation

4 basic styles of decision making which vary along 2 dimensions-

value orientation and tolerance for ambiguity

values the org wants to emphasize

values statement

produces a subset of an industry's products or services

variety based

3 ways to create unique and valuable position in minds of customers

variety based positioning needs-based access-based

when a firm expands into the industries that provide supplies usedin producing its products, or into the industries that distribute and sell itsproducts

vertical integration

- a structure in which the firm creates a company outside a company specifically to respond to an attractive and often temporary market opportunity. Must create a virtual organization, an organization whose members are geographically separated usually working through email. Often make use of independent contractors. Ex. Automattic Inc- web developer with corporate office just the homes of its 123 employees, located all over the world.

virtual structure

several activities reinforce one another

virtuous circle

key element of successful strategy execution

visible leadership

tools to improve strategic xecution

visible leadership clear roles and accountability candid communication appropriate HR practices

what the organization envisions itself becoming

vision statement

prohibits discr based on mental or physical disability

vocational rehabilitation act

The risk of a Single-Product Strategy:

vulnerability- any problem within industry can put entire business in jeopardy

analytical decision maker example

warren buffet

internal drawbacks that hinder an org in executing strategies in pursuit of its mission

weaknesses

advantages of functional structure

working in same functional area learn from one another managers easily monitor managers more easily achieve success only responsible for one function


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