Management Exam 2

Bounded Rationality Model and when should it be used?

"good enough", tendency to satisfice individuals knowingly limit their options to a manageable set and choose the best alternative without conducting an exhaustive search for alternatives. 1.The minimum criteria are clear 2. You do not have or are not willing to invest much time to make the decision 3. You are not trying to maximize your outcome

Five steps to creative decision making

1- problem identification 2- immersion 3- incubation 4- illumination 5- verification and application

When should a creative making model be used?

1.Solutions to the problem are not clear New solutions need to be generated. You have time to immerse yourself in these issues.

In KPMG's 2017 survey of the 250 largest companies worldwide, approximately what percentage reported their corporate social responsibility?

93%

What is the Balanced Scorecard framework?

A framework designed to translate an organization's vision and mission statements and overall business strategy in specific, quantifiable goals and objectives and to monitor the organization's performance in terms of achieving these goals. Focuses on 1) customers 2)learning and growth 3) internal processes 4) financial performance

What is Fiedler's Contingency Theory?

A leadership theory in which successful leadership is predicted as a function of the favorableness of the situation and the personality of the leader. There are three conditions creating situational favorableness: (1) leader-subordinate relations, (2) position power, and (3) task structure

Authentic Leadership

A style in which the leader is true to himself or herself while leading self aware and not afraid to be themselves

Abusive Leadership

A sustained display of hostile verbal and nonverbal behaviors toward employees.

What is organizational culture?

A system of shared assumptions, values, and beliefs that show people what is appropriate and inappropriate behavior within a given organization.

What is management by objectives? (MBO)

A systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources. 1) Setting company wide goals derived from corporate strategy 2)determining team- and department-level goals 3) collaborative setting individual level goals that are aligned with corporate strategy 4) developing an action plan 5) periodically reviewing performance and revising goals.

According to path-goal theory, when is Achievement-oriented leadership the appropriate leadership style to utilize?

Achievement-oriented leadership: set goals for employees and encourage them to reach their goals likely to be effective when employees have both high levels of ability and high levels of achievement motivation.

What are the four types of reactions to change?

Active Resistance Passive Resistance Compliance Enthusiastic Support

What is a trait approach to leadership?

An earliest set approach to the study of leadership and tried to identify a set of traits (Big Five Traits) that distinguished leaders from non-leaders. Openness Conscientiousness Extraversion Agreeableness Neuroticism

boundaryless organization

An organization that eliminates traditional barriers between departments as well as barriers between the organization and the external environment. Coined by Jack Welch Modular organization Strategic alliances Fully remote

What is modular organization?

An organization where all the nonessential functions are outsourced. The idea is to retain only the value-generating and strategic functions in house, while the rest of the operations are outsourced to many suppliers.

intuitive decision-making model and when should it be used?

Arriving at decisions without conscious reasoning. The model argues that in a given situation, experts making decisions scan the environment for cues to recognize patterns. 1.Goals are unclear 2. New solutions need to be generated 3. You have time to immerse yourself in the issues.

When trying to persuade people to change their ways, having a history of suggesting implementable changes is which method of overcoming resistance to proposals?

Assess your credibility.

What are ways that Onboarding help maintain an effective organization's culture?

By providing a formal orientation program that indoctrinates new employees to the company culture and introduces them to their new jobs and colleagues.

Satisficing

Choosing an option that is acceptable, although not necessarily the best or perfect.

What are assumptions?

Deepest level, taken for granted and reflect beliefs about human nature and reality.

Centralization

Degree to which decision-making authority is restricted to higher levels of management in an organization.

Since most employees were working from home, the team leader decided to send a questionnaire out via email to get proposed solutions to a problem instead of bringing everyone to the office for a team meeting. This is an example of

Delphi Technique

According to path-goal theory, when is Directive leadership the appropriate leadership style to utilize?

Directive leadership- leaders who provide specific directions to their employees The theory predicts that the directive style will work well when employees are experiencing role ambiguity on the job.

Advantages of Functional structures:

Effective for organization does not have a large number of products and services requiring special attention More effective in stable environments that are slower to change

What is the refreezing stage?

Ensures that the change becomes permanent. How? Publicize Success Build on Prior Change Reward Change Adoption Embrace Continuous Change Make Change a Part of Organizational Culture

Which statement is accurate according to a 2020 Gallup survey of managers in the U.S.?

Few managers feel their organizations make decisions at a satisfactory speed.

How are cultures maintained through the Attraction - Selection - Attrition model?

First, applicants are attracted to organizations they perceive they will fit into as successful employees Selection - companies select people who will fit into their current corporate culture. Attrition - companies will gradually eliminate candidates who do not fit in

Raul works for an international company that has an executive level and regional managers. Everyone else reports to one of the regional managers. This is an example of a ________ structure.

Flat

What are the four types of measures that a Balanced Scorecard focuses on?

Focuses on 1) customers 2) learning and growth 3) internal processes 4)financial performance

What is the difference between formal and informal leaders?

Formal leaders are people who hold a position of authority and informal leaders influences those around them through personal forms of power

How do founder values and industry demands shape organizational culture?

Founder values become part of the corporate culture to the degree to which they help the company be successful The way they want to do business determines the organization's rules, the structure set up in the company, and the people they hire to work with them. A company's culture, particularly during its early years, is inevitably tied to the personality, background, and values of its founder or founders,

What is the purpose of goals and objectives?

Gauge and report performance Improve performance Align effort Manage accountabilities

What are advantages of centralization?

Greater vision focus with faster execution reduced conflict with greater control Accountability More efficient operations

What determines the long-term success of a change effort?

How well management helps employees cope with the stress that comes with change by displaying support, patience, and continued support to employees after the change is complete.

Which trait is the most highly correlated with leadership ability?

Intelligence

How does changing leaders contribute to culture change in an organization?

It can influence change because a leader influences how things are done in an organization.

Transactional Leadership and what three tools are in their possession?

Leaders who ensure that employees demonstrate the correct behaviors because the leader provides resources in exchange. Tools in possession: Contingent rewards - rewarding for accomplishments Active management by exception - leaving their employees to do jobs without any interference, but predicting any potential problems and preventing them from occurring. Passive management by exception- leave employees alone and wait until something goes wrong before coming to help

Who is generally responsible for setting goals and objectives in an organization?

Leadership

Highly formalized and centralized structures similar to bureaucracies are ________ structures.

Mechanistic

In personal Balanced Scorecard, what reflects your values and philosophy of life?

Mission

What are disadvantages of centralization?

More negative emotional tone resulting in employee exhaustion Does not encourage creativity

Hierarchical Levels

Number of levels an organization has in its hierarchy tall structures and flat structures

During an interview, you should make notes on dress code, building structure, and whether employees look stressed. This is part of which method to evaluate the culture of a company?

Observe the physical environment.

Being curious, original, intellectual, creative, and open to new ideas describes the Big Five personality trait of

Openness

Where does organizational culture fit in the P-O-L-C framework?

Organization

What are flat structures?

Organization with few layers, often with large number of employees reporting to a single manager

Patricia just started a new job at a new company. The first day there, she observes whether people eat lunch at their desks, if they take timed breaks, and if they leave right at 5 pm. She is trying to understand the

Organizational Culture

What are tall structures?

Organizations with several layers of management between frontline employees and the top level

Organizational culture is most related to the P-O-L-C function of

Organizing

According to path-goal theory, when is Participative leadership the appropriate leadership style to utilize?

Participative leaders: Those leaders who make sure that employees are involved in making important decisions. may be more effective when employees have high levels of ability and when the decisions to be made are personally relevant to them

When should a performance evaluation take place?

Performance evaluations should coincide with the needs of the organization and the development needs of the employee.

What is the difference between programmed and nonprogrammed decisions?

Program decisions are those that occur frequent enough that an automated response is developed while non programmed decisions are nonroutine decisions that require conscious thinking and careful consideration of alternatives

advantages of divisional structure

Promptly addresses customer demands Anticipates market changes Perform better in turbulent environments

What are advantages to formalization?

Reduces ambiguity Provides direction to employees

How can role modeling contribute to culture change in an organization?

Role modeling contributes to change by modeling behaviors that are expected of employees to change the culture. These behaviors will trickle down to lower level employees.

What are SMART goals?

Specific, Measurable, Aggressive yet Attainable, Realistic, Time-bound goals

The Internal Revenue Service has many rules and regulations regarding the tax code and the filing of returns. The organization is large and bureaucratic. If an individual has issues with the agency, getting it resolved is a laborious process filled with red tape, and takes an extensive amount of time and patience to resolve. The Internal Revenue Service has a(n) ________ culture.

Stable

What is an example of measures used in objectives?

Stock Price

According to path-goal theory, when is Supportive leadership the appropriate leadership style to utilize?

Supportive leaders provide emotional support to employees Supportive leadership is predicted to be effective when employees are under a lot of stress or when they are performing boring and repetitive jobs.

What is a decision rule?

The automated response we use to make these decisions

Who should be involved in developing performance evaluation goals and objectives?

The manager and employee should work together to set evaluation goals and objectives

What are common appraisal errors?

The most common appraisal error is leniency

What is the unfreezing stage?

The stage that ensures that employees are ready for change by Creating a vision for change, communicating a plan for change, developing a sense of urgency, building a coalition, providing support, allowing employees to participate.

What is the Change stage?

The stage that executes the intended change by implementing the planned changes in technology, structure, culture, or procedures. What to do in this stage? continue to provide support create small wings eliminate obstacles

What are ways that Leadership help maintain an effective organization's culture?

There is a direct correspondence between the leader's style and an organization's culture. when leaders motivate employees through inspiration, corporate culture tends to be more supportive and people-oriented. When leaders motivate by making rewards contingent on performance, the corporate culture tends to be more performance-oriented and competitive Leaders also shape culture by their reactions to the actions of others around them.

Why is allowing employees to participate in planning change beneficial?

They will have the opportunity to voice their concerns. They can shape the change effort so that their concerns are addressed. They will be more knowledgeable about the reasons for change, alternatives to the proposed changes, and why the chosen alternative was better than the others. Finally, they will feel a sense of ownership of the planned change and are more likely to be on board

Situational Leadership Theory

This theory focused on a follower's competence and commitment, or development level (DL) in completing a specific task and the use of four different leadership styles to influence the follower's development. These styles are directive, coaching, supporting, or delegating.

Mechanical structures:

Those structures that resemble a bureaucracy and are highly formalized and centralized Rigid and resistant to change, deters innovativeness and makes quick action challenging, limit individual autonomy and self determination.

What is Lewin's Three Stage Process of Change?

Unfreeze Change Refreeze

What are artifacts?

Visible, tangible aspects of organizational culture. example: physical environment, employee interactions, company policies, reward systems, and other observable characteristics.

What are ways that Reward Systems help maintain an effective organization's culture?

What behaviors are rewarded, which ones are punished, and which are ignored will determine how a company's culture evolves.

Divisional structures:

When departments represent the unique products, services, customers, or geographic locations the company is serving. Employees act more like generalists as opposed to specialist and are in charge of performing many different tasks in the service of the product. Ex: Medical devices, consumer products, baby care, diabetic drugs, nutritional supplements.

When setting an objective, you should answer six "W" questions. Which one relates to identifying requirements and constraints?

Which? Identify requirements and constraints

Flat structures provide managers with

a broader span of control.

rational decision making model and when should it be used?

a series of steps that decision makers should consider if their goal is to maximize the quality of their outcomes. best applied to major decisions where the COSTS ARE HIGH and the consequences of different decision outcomes are SIGNIFICANT. 1. identify problem 2.establish decision criteria 3.weigh decision criteria 4.generate alternatives 5.evaluate the alternatives 6.choose best alternatives 7.implement the decision 8. evaluate the decision Relies on unrealistic assumptions and can lead to analysis paralysis 1. information on alternatives can be gathered and quantified 2. The decision is important 3. you are trying to maximize your outcome

Judgments about Correlation and Causality Bias

a situation in which individuals make inaccurate attributions about the causes of events (1) correlation (Do sales increase when employees are satisfied? Do sales decrease when employees are dissatisfied?), (2) temporal order (Does an increase in employee satisfaction occur before sales increase?), and (3) ruling out other potential causes (Is something else causing increases in both satisfaction of employees and firm sales?).

confirmation bias

a tendency to search for information that confirms one's preconceptions

The leadership style that sets goals for employees and encourages them to reach their goals is

achievement oriented

Research on the employee role in onboarding activities indicates that

active relationship building is particularly important to avoid turnover in those firms lacking systematic onboarding activities.

what are advantages and disadvantages of flat structures

advantages: greater need satisfaction for employees greater levels of self actualization empowers line employees disadvantages role ambiguity advancement opportunities are limited

What are advantages and disadvantages of tall structures **

advantages: greater opportunities for managers to supervise and monitor employee activity job security disadvantages: less need satisfaction for employees less levels of self actualization

Selecting a new computer based on a low price without analyzing what software, warranties, and peripherals come with it is an example of which form of bias?

anchoring and adjustment

If onboarding activities are successful, employees

are more confident about their ability to perform in the organization and likely to remain longer with the firm.

The corner office, mahogany desks and credenzas, gold name plates on office doors, and reserved parking places are examples of cultural

artifacts.

What is leadership?

as the act of influencing others to work toward a goal. ex: formal leaders and informal leaders

"People are generally dishonest" is an example of a cultural

assumption.

What is a behavioral approach to leadership?

attempts to identify the unique behaviors displayed by effective leaders Task oriented leader behaviors people oriented leader behaviors

When leaders make decisions alone without involving employees in the decision-making process, they are using

autocratic decision making

What are the 3 types of leader decision-making styles and how are each related to leader effectiveness and employee behavior?

autocratic decision making: leaders make the decision alone without necessarily involving employees in the decision-making process. employees working in large groups, where opportunities for member interaction were limited, preferred authoritarian leader decision making. democratic decision making: employees participate in the making of the decision employees tend to be more satisfied, but the effects on decision quality or employee productivity are weaker. laissez faire decision making: leave employees alone to make the decision; the leader provides minimum guidance and involvement in the decision. it create high levels of ambiguity about job expectations on the part of employees, and employees also engage in higher levels of conflict when leaders are using the laissez-faire style

passive resistance

being disturbed by changes without necessarily voicing these opinions Dislike the change quietly, feel stressed and unhappy, and even look for a new job without necessarily bringing their concerns to the attention of decision makers. Emotions associated: despair, helplessness, and sadness

Fundamental Attribution Error

bias that exists when positive outcomes are seen as a function of personal characteristics while negative outcomes are attributed to external circumstances. Ex: blaming bad outcomes on surroundings but blaming good outcomes on own intelligence/ exceptional work ethic.

A modular organization is a type of ________ organization because it eliminates traditional barriers by outsourcing nonessential functions.

boundaryless

Amethyst is looking for a summer job when she's home from college. She decides to take the first job that pays minimum wage and will allow her to fit in a family vacation and a dental procedure. Amethyst is using which decision-making model?

bounded rationality

If an industry is highly regulated, firms competing within it likely have

bureaucratic structures.

In personal scorecard, the financial goals

capture your needs and aspirations about money.

The degree to which decision-making authority is concentrated at higher levels in an organization refers to

centralization

What is a symptom of groupthink?

collective rationalizations

A Balanced Scorecard relies on which process to bind short-term activities to long-term activities?

communicating and linking

illa is part of a project group. Her group members chose her as the leader of the group because she is always on task and on time for meetings, sets achievable goals, and is willing to assist anyone who needs help. Willa is

conscientious.

Experts have proposed that creativity occurs as a result of the interaction between personality traits, attributes, and

context

Bettie's Bakery sold out of their muffins every day last week. Bettie thought that it was because she changed the recipe slightly and now her customers loved the muffins. She decides to triple her muffin output for the following week. However, muffin sales fall because the temporary increase was related to purchases for Teacher Appreciation Week. Bettie experienced a(n)

correlation and causality bias

The culture of Altamira Corporation is characterized by participative decision making, innovation, and openness. Most employees feel part of the team. The accounting department, however, is run using authoritarian decision making to ensure efficiency and effectiveness. Accounting manager Stanley Jones believes in tight control to prevent errors. The department has a low error rate and high turnover. The accounting department's culture could be classified as a

counterculture.

Escalation of commitment bias often occurs because

decision makers do not want to admit they were wrong.

Maurice works as the frozen food manager in a large grocery store. When his stock of two-pound bags of frozen shrimp gets down to two cases, he emails the warehouse to send ten cases to restock. The "automated" ordering of ten cases when supply gets to two cases in the store is called a(n)

decision rule

Enthusiastic Support

defenders of the new way and actually encourage others around them to give support to the change effort as well Emotions associated: Excited, elated, and enthusiastic

Which action is included in Lewin's unfreezing step?

develop a sense of urgency

Why do people resist change?

disrupted habits, personality, feelings of uncertainty, fear of failure, personal impact of change, prevalence of change, perceived loss of power

A company was organized into the detergent area, the dishwashing soap area, and the health and beauty aid area. Marketing and manufacturing take place at each location. This firm has a ________ structure.

divisional

According to Blanchard and Hersey's Situational Leadership Theory, a leader's style is directly influenced by

employee readiness.

According to expectancy theory, when are employees motivated?

employees are motivated when they believe—or expect—that (a) their effort will lead to high performance, (b) their high performance will be rewarded, and ( c) the rewards they will receive are valuable to them.

Organic structures are conducive to

entrepreneurial activity and innovation.

Research findings of leader behaviors suggest

extremely high levels of leader task-oriented behaviors may lead to burnout in employees.

A common reason that people resist change on the job is

fear of failure

Organic Structures:

flexible and decentralized structures with low levels of formalization where communication lines are more fluid and flexible Employee job descriptions are broader and employees are asked to perform duties based on the specific needs of the organization at the time as well as their own expertise levels.

A company president is in a position of authority due to the associated title. This demonstrates what kind of leader?

formal

A company is organized into accounting, marketing, human resource management, and production departments. Employees handle a wide variety of transactions. This firm has a ________ structure.

functional structure

The COVID-19 pandemic is an example of what external force impacting organizational change?

generational events

compliance

going along with proposed changes with little enthusiasm Emotions associated: calm, relaxed, and content

In response to organizational change, compliance refers to

going along with proposed changes with little enthusiasm.

Functional Structure

group jobs based on similarity in functions Ex: marketing, manufacturing, finance, accounting, human resources, and information technology

While many people assume that charisma is innate, the text suggests it is possible to improve your charisma by

having a vision

What are the benefits of trait approaches to leadership?

helps organizations select the right people for positions of responsibility

What is organizational structure?

how individual and teamwork within an organization is coordinated

Escalation of Commitment Bias

individuals continue on a failing course of action after information reveals this may be a poor path to follow. ex: continuously repairing a bad car to justify initial investment of buying the car.

Sampling Bias

individuals make generalizations from a small sample (or a single source) of information rather than through large, randomly-drawn samples that represent a wide audience. ex: using your own experience and treating it like a common experience

Overconfidence bias occurs when

individuals overestimate their ability to predict future events

Which decision-making model is least effective when the manager has no prior experience with a particular issue?

intuitive

What are the limitations of trait approaches to leadership

it ignores the situation in which leadership occurs not all traits are equally effective in predicting leadership potential across all circumstances

Employees engage in higher levels of conflict when leaders use which decision making style?

laissez faire

What are the benefits of a behavioral approach to leadership?

leaders can learn and decide what actions they want to implement to become the kind of leader they want to be

What does the path-goal theory of leadership propose?

leaders will create satisfied and high-performing employees by making sure that employee effort leads to performance, and their performance is rewarded

Servant Leadership

leadership approach that defines the leader's role as serving the needs of others Servant leaders put their employees first, understand their personal needs and desires, empower them, and help them develop in their careers.

One of the stages in Lewin's three-stage model of planned change is

making sure that organizational members are ready for, and receptive to, change.

Artifacts reflecting values of an organization include

mission statements and office layout with open spaces shared principles

Transformative leadership and what four tools are in their possession?

motivate employees by aligning employee goals with the leader's goals. Thus, employees working for transformational leaders start focusing on the company's well-being rather than on what is best for them as individual employee Four tools in possession: Charisma Inspirational motivation intellectual stimulation individualized consideration

After much deliberation among the chancellor and executive staff, your university now requires proof of influenza and COVID vaccinations for admission to in-person classes for all students and educators. This is an example of

non programmed decision

What are goals?

outcome statements that define what an organization is trying to accomplish

Mikhail is a manager at Acme Manufacturing. He strives to show concern for his employees' feelings and to treat them with respect. What leader behavior is he exhibiting?

people oriented

Research indicates that employees tend to stay longer in ___________ cultures.

people oriented cultures

What is the first step in conducting a decision making premortem?

planning team comes up with an outline of a plan.

What are the outcomes for an organization that utilizes servant leadership?

positive effect on employee commitment, employee citizenship behaviors toward the community (such as participating in community volunteering), and job performance.

Mariah is the CEO at ACME Manufacturing. She knows some of the equipment is outdated and subject to failure, but the immediate cost of replacement is much higher than the cost of repairs. She estimates the cost of repairs over the next 5 years, and weighs these costs against the cost of the new equipment and time lost for nonfunctioning equipment. She decides to keep the equipment for another year and keep track of the failures, then decide if new equipment is justified. Which decision-making model is Mariah using?

rational

What are disadvantages to formalization?

reduced innovativeness reduced motivation and job satisfaction slower pace of decision making

Availability bias

refers to a situation in which information that is more readily available is seen as more likely to occur ex: thinking that automotive accidents cause more deaths than stomach cancer because car accidents are reported more.

To generate culture change at an organization, a common practice is to

remove the CEO and/or other top managers.

The tendency to accept the first alternative that meets minimum criteria is called

satisficing

The degree to which a person is at peace with themselves and has an overall positive assessment of their self-worth and capabilities is related to their

self esteem

If the company mission statement does not affect employee behavior on a day-to-day basis, it:

serves as an aspirational goal for employee behavior.

What are values?

shared principles, standards, and goals

People-oriented behaviors

showing concern for employee feelings and treating employees with respect. Examples of such behaviors include listening to employees and acting in a teaching role.

Task oriented behaviors

structuring the roles of subordinates, providing them with instructions, and behaving in ways that will increase the performance of the group. Task-oriented behaviors are directives given to employees to get things done and to ensure that organizational goals are met

Cultures that emerge within different departments, branches, or geographic locations are called

subcultures

When leaders motivate employees through inspiration, corporate culture tends to be

supportive and people-oriented.

Anchoring and Adjustment bias

tendency for individuals to rely too heavily on arbitrary numbers, irrelevant traits or facts when making decisions Ex: declaring five passengers dead because the plane had been consumed in flames, so you assume that no one could have survived.

Framing Bias

tendency of decision makers to be influenced by the way that a situation or problem is presented ex: preferring ground beef that says "85% lean beef" rather than "15% fat"

Overconfidence Bias

the bias in which people's subjective confidence in their decision making is greater than their objective accuracy ex: purchasing lottery ticket as a way to make money

As the population in the country became more diverse, P&G began to manufacture and sell variations of its product that would appeal to different cultures. This demonstrates how _______ can cause organizational change.

the environment

Behavioral approaches to leadership behaviors fail to consider

the environment in which behaviors occur

Formalization

the extent to which an organization's policies, procedures, job descriptions, and rules are written and explicitly articulated Employees have little autonomy to decide on a case by case basis

Active Resistance

the most negative reaction to a proposed change attempt. May sabotage the change effort and be outspoken objectors to the new procedures Emotions associated: stress, angry, upset

What are the limitations of a behavioral approach to leadership

they neglected the environment in which behaviors were demonstrated.

What types of goals and objectives should be developed for performance evaluations?

those that inspire, challenge, and stretch people's capabilities.

Operational decisions refer to

those things that employees do each day to make the organization run.

According to Daniel Goleman, effective leaders are different from ineffective leaders due to their

understanding of other people's emotions.

Miguel is a department manager in a family-owned retail store. He and his subordinates clash over scheduling and other procedural aspects of the job almost daily. While having the title of manager, Miguel makes few decisions for the department, instead implementing those relayed by the owner. The sales associate positions as well as his managerial position do not have specific duties tied to them; instead everyone is supposed to do "whatever it takes." According to Fiedler's contingency theory, the situation would best be described as

unfavorable

What are objectives?

very precise, time-based, and measurable actions that support the completion of a goal. 1. related directly to the goal 2. be clear, concise, and understandable 3. be stated in terms of results 4. begin with an action verb 5. specify a date for accomplishment 6. be measurable

Hindsight Bias

when individuals look backward in time where mistakes made seem obvious after they have already occurred. Ex: when you're watching a football game and criticizing the decisions of football players in hindsight of games played the previous weekend