Management Final Exam
What are the four types of management styles discussed in the Blanchard-Hersey theory of leadership, and when should you use them?
1.Supporting: high supportive and low directive behavior 2. Delegating: low supportive and low directive behavior 3. Coaching: high directive and high supportive behavior 4. Directing: high directive and low supportive behavior directive behavior is on the x axis and supportive behavior is on the y axis. There is a spectrum from d4 (delegating) to d1 (directing) where d4 is most developed and d1 is developing
What is Fielder's theory of leadership success?
According to Fielder, organizations attempting to achieve group effectiveness through leadership must assess the leader according to an underlying trait, assess the situation faced by the leader, and construct a proper match between the two.
What are the three levels of organizations culture? What is the most observable level of culture, and what role does it play in the perpetuation of an organization's culture? What is the least observable aspect, and why is it important?
Artifcats: the symbols of culture in the physical and social work environment. Values: espoused (what members of an organization say they value) and enacted (reflected in the way individuals actually behave). The most observable aspect is artifacts. Artifacts include things like ceremonies and rites, stories about the company and culture, rituals, and symbols. It helps bind the employees together. The least observable aspect are assumptions, which are almost invisible. Assumptions help the employees share a common culture and common beliefs about their roles, their purposes in the company, and how they feel about their jobs.
Discuss the use of cash, stock, and stock options as mechanisms for motivating and controlling individual behavior.
Cash-very immediate reward, not firm specific. Usually only given out for achieving short-term operational objectives. Stock is longer term, but its incentive effects are stronger. Stock options: more companies are using stock options as people advance in the firm.
How can the capital structure of the firm (ratio of debt to equity) act to guide and control top management behavior and motivation?
Equity- with equity, there is a threat of takeover from the shareholders, therefore the managers have to stya and line and are motivated to work to appease the shareholders and do what's best for the company. Heavier equity promotes risk-taking and innovation Debt- with debt, there's a threat of bankruptcy, so managers will work to generate revenues so the business doesn't shut down. However, this diminishes returns to risk-taking and innovation. To prevent the bad stuff, there's an active market for control and board of directors along with goals that align with the company's strategy to fight the downsides.
Discuss the use of performance plans in the execution of management responsibilities throughout the course of the year.
Evaluation doesn't just occur at the time of the review- the performance plan can be used to prompt intervention. Managers can identify the issue, understand how it varies, and establish a course of action that brings things back in line.
Discuss the relationship between Maslow's hiearchy of needs and the Blanchard-Hersey Theory of Leadership Development.
In the hieararchy of needs, one cannot move onto the next level of the pyramid until their needs in the current level are met. Likewise, in the Blanchard-Hersey model, it works as a spectrum that businesses slide up and down on; one has to start directing, then move to coaching, supporting, and finally delegating.
How do intrinsic and extrinsic rewards affect motivation and control?
Intrinsic rewards: pleasure I get from coming in and doing my job, has to do with the meaninfulness of my work and the personal fulfillment I get. Extrinsic rewards: can either be economic or social, like the money or social status I get. As the level of extrinsic rewards increases, the amount of intrinsic rewards decreases.
What role does leadership play in the formation and perpetuation of organization culture?
Leaders act as the personal representation of norms and values of an organization both internally and externally (example: Dr. Arrn). The leader perpetuates and reinforces the culture of their organization. Oftentimes, a culture emerges from the personality and disposition of the leader who founded the organization, which is called the Founder's Effect (example: Bill Gates).
Discuss the various trade-offs in establishing measures of performance, such as long term vs. short term, etc.
Long term v. short term: want people to be motivated by long term goals, but can't get to the future without performing in the present. We need a balance between long-term goals and operational responsibilities. Subjective v. objective Group v. individual: sometimes we want to hold ppl accountable for things beyond their control so they can work on risk prevention, but too much of that can disincentivize employees. Holding people accountable only for things they can control will make them risk adverse tho. Performance plans have two sets of goals: one is for long-term, the other is operational goals.
Discuss the different forms of power available to leaders and the effects associated with each.
Reward power- the power a person has because people believe that they can bestow rewards or outcomes, such as money or recognition. Coercive power- the power a perosn has because people believe that they can punish them by inflicting pain or witholding something they value. Expert power- the power a person has because others believe that they have and are willing to share knowledge they need Referent power- The power a person has because others want to associate with or be accepted by him Legitamate power- the power a person has because others believe that they posses the right to influence them and they out to obey.
Compare and contrast the leadership grid and the Blanchard-Hersey frameworks.
Similarities: the leadership gid and the BH chart both have similair axes- both directive and concern for production are used to motivate employees to do their work, and concern for people and supportice behavior involve the human side of the equation. Differences: while the BH chart is more of a spectrum, the leadership grid is different in the sense that you can only be in one place at one time- there is no fluidity or direction to the grid.
What are SMART goals and how can they be used as a management tool?
Smart goals are a way to create effective goals. Specific/stretch- goals should be specific and limited, and potentially stretch the person's abilities Measurable: observable criteria linked to the specific goals Achievable: contorl over resources necessary to achieve objectives Relevant: related to overall objectives of organization or business Time-framed: specific timeline for completion- with benchmarks where appropriate. SMART goals are effective because they force an individual to make goals that they can actually achieve and take steps to achieving.
Please discuss the relationship between organization culture and monetary and material rewards (economic incentives) in motivating and controlling individual behavior in organizations.
Sociology: broader social structures like culture act like control and motivating factors for members, expectations for your behavior based on your title and position, etc. Psychology: Intrinsic benefits of work, enjoyment derived from doing work in the moment, satisfaction based on extent of work being meaningful to others. Economic: behavior is rational and utilitarian, and so is how you get paid and how incentives are produced.
Explain how stock options work and how they can be used as a form of compensation.
Stock options have a strike price, where the company has a righ to purchase a stock at a particular price by a certain date. High strike prices makes it harder to make money and low strike prices makes it easier to make money.
What are the four leadership behaviors in the path-goal theory of leadership?
Supportive leadership: supportive leaders are friendly, approachable, and considerate to individuals in the workplace. Supportive leadership is especially effective when an organizational member is performing a boring, stressful, or tedious task. Directive: directive leadership is needed when role ambiguity is high. Removing uncertainty and providing needed guidance can increase members' effort, job satisfaction, and performance. Participative leadership: participative leadership is effective when tasks are unstructured. It is used when leaders need help in identifying work procedures and where followers have the expertise to provide this help. Achievement-oriented leadership: Setting challenging goals, seeking improvement in performance, exmphasizes excellence, and demonstrates confidence in members' abilities to achieve high standards. They use goal-setting theory to great advantage.
Both the OSU and UM leadership studies identified central leader behaviors. What are these behaviors, and how are they different from one another?
The OSU study recognized two sets of leader behaviors: 1. consideration: the relationship-oriented behavior of a leader. Behaviors include being supportive, representing people's interests, respecting their ideas, etc. 2. Initiating structure: involved task-oriented leader behaviors. Behaviors include scheduling work, deciding what is to be done and how to do it, providing direction to members, planning, coordination, etc. The UM study recognized two sets of leader behaviors: 1. Job-centered behaviors are devoted to supervisory functions, such as planning, scheduling, coordinating work activities, and providing resources for task performance 2. Employee-member centered behaviors include consideration and support for organizational members. The two cases provided similair findings.
What is the concept of the balanced scorecard and how does it affect strategy development and performance evaluation?
The balanced scorecard has a center of vision and strategy and branches out to financial, customer perspective, learning and growth, and internal business process. It's another way of SMARTgoals.
Blake and Mouton's work with the Leadership Grid identified several leadership types. What are they, and how does this leadership model look from the perspective of situation theories of leadership?
The leadership grid demonstrates that any combination of the two leader concerns from the OSU and UM studies are possible. Their types of leadership are: 1,9: accommodating: supporting results that establish and reinforce harmony, generating enthusiasm. 1,1: indifferent: distant from active responsibility for results to avoid getting entangled in problems, taking passive or supportive positions if forced. 5,5: status quo: endorsing results that are popular but cautioning against unnecessary risk, having balance and compromise 9,1: Controlling: Expects results and takes control clearly, enforcing rules that sustain high results, does not permit deviation 9,9: sound: supporting team actions in a way that invites involvement and commitment, exploring all facts and alternatives
What is the principle-agent problem? How does it relate to the problem of individual motivation and control in the organization?
The principle-agent problem arises when there is a misalignment of incentives between shareholders and managers. We seperate the shareholders from the company in order to protect the company from misuse and instead delegate agents to run the company in the best way possible for the shareholders. This creates a level of stable control and less motivation for fraud in the employees.
Please discuss the performance review annual lifecycle and how it fits into the process of management. Why is the review process important to higher level planning?
The review process begins with self-evaluation. Employees should draft their goals and the beginning of the year. During the year, the employees perform. Managers use the evaluations as a means of structuring the review, and they focus on performance, not personality. Goals and objectives of the individual and organization are oriented towards future improvement. Performance reviews act as input to HR planning career development and future staffing. They review the results to better understand the future needs of the firm. They can see if the company is on track and can meet the future demands that will be placed on it.
Please discuss the three different hypotheses regarding how organization culture affects organizational performance.
The strong culture hypothesis: strong culture facilitates performance. Strong culture is characterized by goal alignment, high levels of motivation because of shared values of the members, and control without the oppressive effects of bureaucracy. The fit perspective: A culture is only good if it fits the industry or the firm's strategy. Three particular industry characteristics affect culture: competitive environment, customer requirements, and societal expectations. The adaptive hypothesis: An organizational culture that encourages confidence and risk among employees, has leadership and change, and focuses on the changing needs of others. Most managers strongly value people and processes that can create useful change.
What is the difference between the Strong Culture and Cultural Fit hypotheses?
The strong culutre hypothesis: goal alignment, high levels of motivation based on shared values, and control without oppression. The cultural fit perspective is good only is it fits the industry or the firm's strategy. There are three characteristics that affect culture under this: competitive environment, customer requirements, and societal expectations.
Identify and describe the three situational variables presented in Fielder's contingency theory of leadership.
The three situatinal variables in Fielder's contingency theory are: 1. Leader-member relations: the degree of the group's acceptance of the leader, their ability to work well together, and members' level of loyalty to their leader. 2. Task structure: the degree to which the task specifies a detailed unambiguous goal and how to achieve it. 3. Position power: a leader's direct ability to influence group members. The situation is most favorable for a leader when the relationship between the leader and group membners is good, when the task is highly structured, and when the leader's position power is strong. The least- favorable situation occurs under poor leader-member relations, an unstructured task, and weak position power.
What do we mean by "sampling on the dependent variable," and how does that affect the validity of empirical finding in the social science literature? How did this research error affect findings in the leadership literature?
This is the problem with the original universal trait theory- in research, they identify successful leaders, but not unsuccessful leaders. This creates biased results. A lot of leadership literature suffers from this because they purposefully look at just the people who succeed and not the ones who tried and failed. In addition, some of the things the successful people did might have had nothing to do with their success.
Define and discuss transformational leadership and charismatic leadership.
Transformational leaders bring about innovation and change. They imagine how the future could be and inspire their followers to work towards creating that future. They are visionaries and set huge objectives and use those objectives as goals to motivate those around them. Charismatic leader: a leader whose personality motivates subordinates to exceed their required performance level. They lead through interpersonal behavior and personality, and they have a high ability to persuade and motivate through individual connections.
Define and discuss the leadership grid theory of leadership style and effectiveness:
With the leadership grid theory, concern for production is on the x-axis and concern for people is on the y-axis. Leaders should aim to be high on both the x and y axis. Without a high score on the x-acis, nothing will get done and your production levels will be low; however without a high score on the y-axis, the workplace will not function well for the employees and there will be higher turnover rates. The types of leadership identified by the Leadership Grid Theory are: 1,9: Country club management 1,1: Impoverished management 5,5: Middle of the road management 9,9: Team management 9,1: Authority-Compliance
