Management Test #1 FoReal
What is a "High-Performance Culture"?
A High-Performance Culture is a culture that is based on a solid organizational mission or purpose, embodies shared adaptive values that guide decisions and business practices, and encourages individual employee ownership of both bottom-line results and the organization's cultural backbone
Describe Multinational Corporations.
A multinational corporation (MNC) typically receives more than 25 percent of its total sales revenues from operations outside the parent's home country. The size and volume of international business is LARGE, companies have revenues that equal GDP of small countries and they move assets from country to country. An MNC is managed as an integrated worldwide business system in which foreign affiliates act in close alliance and cooperation with one another. Capital, technology, and people are transferred among country affiliates. The MNC can acquire materials and manufacture parts wherever in the world it is most advantageous to do so. An MNC is ultimately controlled by a single management authority that makes key strategic decisions relating to the parent and all affiliates. Although some headquarters are binational, some centralization of management is required to maintain worldwide integration and profit maximization for the enterprise as a whole. MNC top managers are presumed to exercise a global perspective. They regard the entire world as one market for strategic decisions, resource acquisition, and location of production, advertising, and marketing efficiency. Ethnocentric companies place emphasis on their home countries, polycentric companies are oriented toward the markets of individual foreign host countries and geocentric companies are world oriented and favor no specific country.
What is an "Organization?"
A social entity that is goal directed and deliberately structured
What is a "Stakeholder?"
A stakeholder is any group or person within or outside the organization that has some type of investment or interest in the organization's performance and is affected by the organization's actions (employees, customers, shareholders, and so forth).
Describe the significance of organizational symbols, stories, heroes, slogans, and ceremonies with respect to corporate culture.
A symbol is an object, act, or event that conveys meaning to others. Symbols can be considered a rich, nonverbal language that vibrantly conveys the organization's important values concerning how people relate to one another and interact with the environment. A story is a narrative based on true events that is repeated frequently and shared among organizational employees. Stories paint pictures that help symbolize the firm's vision and values and help employees personalize and absorb them. A hero is a figure who exemplifies the deeds, character, and attributes of a strong culture. Heroes are role models for employees to follow. Heroes with strong legacies may continue to influence a culture even after they are gone. A slogan is a phrase or sentence that succinctly expresses a key corporate value. Many companies use slogans or sayings to convey special meaning to employees. A ceremony is a planned activity at a special event that is conducted for the benefit of an audience. Managers hold ceremonies to provide dramatic examples of company values. Ceremonies are special occasions that reinforce valued accomplishments, create a bond among people by allowing them to share an important event, and anoint and celebrate heroes.
Describe each of the following culture types and classify them in terms of whether their strategic focus is internal or external and with respect to the extent to which the environment requires flexibility or stability: Adaptability, Achievement, Involvement, Consistency.
An adaptability culture has an external strategic focus and the environment requires flexibility. It emerges in an environment that requires fast response and high risk decision making. Managers encourage values that support the company's ability to rapidly detect, interpret, and translate signals from the environment into new behaviors. Employees have the autonomy to make decisions and act freely to meet new needs, and responsiveness to customers is highly valued. Managers also actively create change by encouraging and rewarding creativity, experimentation, and risk-taking. An achievement culture has an external strategic focus and the environment requires stability. It is suited to organizations concerned with serving specific customers in the external environment, but without the intense need for flexibility and rapid change. This results-oriented culture values competitiveness, aggressiveness, personal initiative, cost cutting, and willingness to work long and hard to achieve results. An emphasis on winning and achieving specific ambitious goals is the glue that holds the organization together. An involvement culture has an internal strategic focus and the environment requires flexibility. It emphasizes an internal focus on the participation of employees to adapt rapidly to changing needs from the environment. This culture places a high value on meeting the needs of employees, and the organization may be characterized by a caring, family-like atmosphere. Managers emphasize values such as cooperation, consideration of both employees and customers, and avoiding status differences. A consistency culture has an internal strategic focus and the environment requires stability. Uses an internal focus and a consistency orientation for a stable environment. Following the rules and being thrifty are valued, and the culture supports and rewards a methodical, rational, and orderly way of doing things. In today's fast-changing world, few companies operate in a stable environment, and most managers are shifting toward cultures that are more flexible and in tune with changes in the environment.
Distinguish among the following levels of moral development: a) Pre-conventional b) Conventional c) Post-conventional
At the preconventional level, individuals are concerned with external rewards and punishments and obey authority to avoid detrimental personal consequences. In an organizational context, this level may be associated with managers who use an autocratic or coercive leadership style, with employees oriented toward dependable accomplishment of specific tasks. At level two, called the conventional level, people learn to conform to the expectations of good behavior as defined by colleagues, family, friends, and society. Meeting social and interpersonal obligations is important. Work-group collaboration is the preferred manner of accomplishing organizational goals, and managers use a leadership style that encourages interpersonal relationships and cooperation. At the postconventional, or principled, level, individuals are guided by an internal set of values based on universal principles of justice and will even disobey rules or laws that violate these principles. Internal values become more important than the expectations of significant others.
Describe some ways that organizations deal with uncertain environments.
Boundary-spanning roles link and coordinate the organization with the external environment by seeking business intelligence, which results from using sophisticated software to search through internal and external data to spot patterns, trends, and relationships that might be significant, and competitive intelligence, which refers to activities to get as much information as possible about one's rivals. Interorganizational partnerships involve reducing boundaries and beginning to collaborate with other organizations. With tough global competition, constantly changing technology, and shifting government regulations, few companies can compete effectively unless they join with other firms in various partnerships. Mergers occur when two or more organizations combine to become one, and joint ventures are strategic alliances or programs by two or more organizations.
Describe Conceptual, Human, and Technical skills.
Conceptual skills are needed for effective management, but aren't needed for non-manager positions. Human skills are only slightly needed for non-manager positions but are most important for good management. Technical skills are more important for non-managers and less important for managers.
What is a "Corporate Culture?"
Corporate culture is the set of key values, beliefs, understandings, and norms that members of an organization share
What are the general techniques of Cultural Leadership?
Cultural Leadership involves defining and using signals and symbols to influence corporate culture, articulating a vision for the organizational culture that employees can believe in, and heeding the day-to-day activities that reinforce the cultural vision. This requires communication through words and actions.
Distinguish between Theory X and Theory Y.
Douglas McGregor formulated Theory X and Theory Y, where the classical perspective was based on Theory X assumptions about workers, and Theory Y is a more realistic view of workers for guiding management thinking. Theory X assumes that the average human being has an inherent dislike of work and will avoid it if possible, so most people must be coerced, controlled, directed, or threatened with punishment to get them to put forth adequate effort toward the achievement of organizational objectives. It also believes that the average human being prefers to be directed, wishes to avoid responsibility, has relatively little ambition, and wants security above all. Theory Y assumes that the expenditure of physical and mental effort in work is as natural as play or rest, so the average human being does not inherently dislike work. A person will exercise self-direction and self-control in the service of objectives to which he or she is committed without the need for threat of punishment. The average human being learns, under proper conditions, not only to accept but to seek responsibility, and that the capacity to exercise a relatively high degree of imagination, ingenuity, and creativity in the solution of organizational problems is widely, not narrowly, distributed in the population, so under the conditions of modern industrial life, the intellectual potentialities of the average human being are only partially utilized. The point of Theory Y is that organizations can take advantage of the imagination and intellect of all their employees. Employees will exercise self-control and will contribute to organizational goals when given the opportunity.
Distinguish among Economic, Legal, and Ethical, and Discretionary Responsibility.
Economic responsibility is to produce the goods and services that society wants and to maximize profits for its owners and shareholders. Legal responsibility defines what society deems as important with respect to appropriate corporate behavior. That is, businesses are expected to fulfill their economic goals within the framework of legal requirements imposed by local town councils, state legislators, and federal regulatory agencies. Ethical responsibility includes behaviors that are not necessarily codified into law and may not serve the corporation's direct economic interests. Discretionary responsibility is purely voluntary and is guided by a company's desire to make social contributions not mandated by economics, law, or ethics. Discretionary activities include generous philanthropic contributions that offer no payback to the company and are not expected.
Describe the two categories of factors in an organization's environment that combine to determine the degree of "uncertainty" of the environment.
Environmental characteristics that influence uncertainty are the number of factors that affect the organization and the extent to which those factors change (rate of change)
Define "Ethics" and explain how ethical behavior relates to behavior governed by law and by free choice.
Ethics is the code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong. Ethics sets standards as to what is good or bad in conduct and decision making. An ethical issue is present in a situation when the actions of a person or organization may harm or benefit others. Human behavior falls into three categories, the first is codified law, in which values and standards are written into the legal system and enforceable in the courts. In this area, lawmakers set rules that people and corporations must follow in a certain way. The domain of free choice is at the opposite end of the scale and pertains to behavior about which the law has no say and for which an individual or organization enjoys complete freedom. Between these domains lies the area of ethics. This domain has no specific laws, yet it does have standards of conduct based on shared principles and values about moral conduct that guide an individual or company. One must recognize the domain of ethics and accept moral values as a powerful force for good that can regulate behaviors both inside and outside organizations.
What is "Ethnocentrism?"
Ethnocentrism refers to a natural tendency of people to regard their own culture as superior and to downgrade or dismiss other cultural values. Ethnocentrism can be found in all countries, and strong ethnocentric attitudes within a country make it difficult for foreign firms to operate there. One way that managers can fight their own ethnocentric tendencies is to understand and appreciate differences in social values.
Describe Globalization.
Globalization refers to the extent to which trade and investments, information, social and cultural ideas, and political cooperation flow between countries. One result is that countries, businesses, and people become increasingly interdependent.
Describe the five major social value dimensions: Power Distance, Uncertainty Avoidance, Individualism and Collectivism, Masculinity/Femininity, Time Orientation.
High power distance means that people accept inequality in power among institutions, organizations, and people. Low power distance means that people expect equality in power. High uncertainty avoidance means that members of a society feel uncomfortable with uncertainty and ambiguity and thus support beliefs that promise certainty and conformity. Low uncertainty avoidance means that people have great tolerance for the unstructured, the unclear, and the unpredictable. Individualism reflects a value for a loosely knit social framework in which individuals are expected to take care of themselves. Collectivism means a preference for a tightly knit social framework in which individuals look after one another and organizations protect their members' interests. Masculinity stands for preference for achievement, heroism, assertiveness, work centrality (with resultant high stress), and material success. Femininity reflects the values of relationships, cooperation, group decision making, and quality of life. Regarding time orientation, American managers favor a short time horizon and quick results, and they viewed their assignments as stepping stones to future career advancement while Chinese managers favor a long-term approach, building a system and setting a proper course of action to enable long-term success. A long-term orientation reflects a greater concern for the future and a high value on thrift and perseverance, while a short-term orientation reflects a concern with the past and present and a high value on meeting current obligations.
Distinguish between "High-context" and "Low-context" cultures.
In a high-context culture, people are sensitive to circumstances surrounding social exchanges. People use communication primarily to build personal social relationships; meaning is derived from context—setting, status, and nonverbal behavior—more than from explicit words; relationships and trust are more important than business; and the welfare and harmony of the group are valued. In a low-context culture, people use communication primarily to exchange facts and information; meaning is derived primarily from words; business transactions are more important than building relationships and trust; and individual welfare and achievement are more important than the group.
List and describe the four basic functions of management.
Planning - setting goals and deciding activities/select goals and ways to attain them Organizing - organizing activities and people/assign responsibility for task assignment Leading - motivating, communicating with, and developing people/use influence to motivate employees Controlling - establishing targets and measuring performance/monitor activities and make corrections
Define "Social Responsibility."
In one sense, the concept of social responsibility, like ethics, is easy to understand: It means distinguishing right from wrong and doing right and being a good corporate citizen. The formal definition of corporate social responsibility (CSR) is management's obligation to make choices and take actions that will contribute to the welfare and interests of society, not just the organization. As straightforward as this definition seems, CSR can be a difficult concept to grasp because different people have different beliefs as to which actions improve society's welfare. To make matters worse, social responsibility covers a range of issues, many of which are ambiguous with respect to right or wrong.
Explain why International Management is more complex than the management of a domestic business.
International managers must give considerable thought to economic, legal-political, and sociocultural factors.
What does it mean to say that managers have Interpersonal, Informational, and Decisional Roles?
Interpersonal means managing through people, informational means managing by information, and decisional means managing through action. Informational: Monitor, Disseminator, Spokesperson Interpersonal: Figurehead, Leader, Liaison Decisional: Entrepreneur, Disturbance Handler, Resource Allocator, Negotiator
Describe the modern field of Management Science.
Management Science, also referred to as the quantitative perspective, uses mathematics and statistics to aid management decision making, which was enhanced by development and perfection of the computer. It was originally designed to defend against the modern global warfare of WWII. Coupled with the growing body of statistical techniques, computers made it possible for managers to collect, store, and process large volumes of data for quantitative decision making, and the quantitative approach is widely used today by managers in a variety of industries. Three subsets of management science are operations research, operations management, and information technology.
What can managers and employees do to encourage ethical behavior and discourage unethical behavior?
One of the most important steps managers can take is to practice ethical leadership. Managers and first-line supervisors are important role models for ethical behavior, and they strongly influence the ethical climate in the organization by adhering to high ethical standards in their own behavior and decisions. Moreover, managers are proactive in influencing employees to embody and reflect ethical values. A code of ethics is a formal statement of a company's values concerning ethics and social issues; it communicates to employees what the company stands for. An ethics committee is a group of executives (and sometimes lower-level employees as well) appointed to oversee company ethics. The committee provides rulings on questionable ethical issues and assumes responsibility for disciplining wrongdoers. Many companies set up ethics offices with full-time staff to ensure that ethical standards are an integral part of company operations. These offices are headed by a chief ethics officer, a company executive who oversees all aspects of ethics and legal compliance, including establishing and broadly communicating standards, ethics training, dealing with exceptions or problems, and advising senior managers in the ethical and compliance aspects of decisions. A toll-free confidential ethics hotline allows employees to report questionable behavior, as well as seek guidance concerning ethical dilemmas. Whistle-blowers often report wrongdoing to outsiders, such as regulatory agencies, senators, or newspaper reporters. Some firms have instituted innovative programs and confidential hotlines to encourage and support internal whistleblowing.
Explain the difference between Efficiency and Effectiveness.
Organizational efficiency refers to the amount of resources used to achieve an organizational goal or to produce a product or service, while organizational effectiveness means providing a product or service that customers value. Organizational effectiveness is the degree to which the organization achieves a stated goal, or succeeds in accomplishing what it tries to do.
What is meant by "Sustainability" and the "Triple Bottom Line?"
Sustainability refers to economic development that generates wealth and meets the needs of the current generation while preserving the environment and society so that future generations can meet their needs as well. With a philosophy of sustainability, managers weave environmental and social concerns into every strategic decision so that financial goals are achieved in a way that is socially and environmentally responsible. Managers in organizations that embrace sustainability measure their success in terms of a triple bottom line. The term triple bottom line refers to measuring an organization's social performance, its environmental performance, and its financial performance. This is sometimes called the three P's: People, Planet, and Profit.
Describe Systems Thinking, the Contingency View, and Total Quality Management.
Systems Thinking is the ability to see both the distinct elements of a system or situation and the complex and changing interaction among those elements. The Contingency View shows that since every situation is unique (Case View), managers must determine what method will work and must identify key contingencies for the current situation. Organizational structure should depend upon industry and other variables, and organizational phenomena exist in logical patterns, so managers devise and apply similar responses to common types of problems. Total quality management comes from the ideas of W. Edwards Deming, known as the "father of the quality movement," which were initially scoffed at in the United States, but the Japanese embraced his theories and modified them to help rebuild their industries into world powers. During the 1980s and into the 1990s, this focus on managing the total organization to deliver better quality to customers moved to the forefront in helping U.S. managers deal with global competition. The approach infuses high-quality values throughout every activity within a company. Four significant elements of quality management are employee involvement, focus on the customer, benchmarking, and continuous improvement, often referred to as kaizen.
What are some of the major changes that have recently occurred in how managers must act in order to be effective (see "State of the Art Competencies")?
Technological advances such as social media and mobile apps, the rise of virtual work, global market forces, the growing threat of cyber crime, and shifting employee and customer expectations have led to a decline in organizational hierarchies and more empowered workers, which calls for a new approach to management that may be quite different from managing in the past. Overseeing work went from being a controller to an enabler. Accomplishing tasks went from supervising individuals to leading teams. Managing relationships went from conflict and competition to conversation and collaboration. Leading went from autocratic to dispersed and empowering leadership. Designing went from maintaining stability to mobilizing for change.
How are new trading alliances such as the European Union and NAFTA changing international trade? What are the pros and cons of these alliances?
The European Union is an alliance to improve economic and social conditions among members that evolved to 27-nation European Union. The goal of the EU is to create a powerful single-market system for Europe's millions of consumers, allowing people, goods, and services to move freely. The increased competition and economies of scale within Europe enable companies to grow large and efficient, becoming more competitive in the United States and other world markets. Another aspect of European unification is the introduction of the euro. However, not all has gone smoothly for the integration, particularly since the global recession began. Small but vocal factions in several countries are arguing that companies and citizens would be better off withdrawing from the eurozone. As economic stability varied from country to country, pitting winners against losers, the economic crisis revived national loyalties and cross-border resentments, slowing the move toward a unified and cohesive "European identity." Spain, Ireland, Portugal, and particularly Greece all have had trouble paying their debts, putting the entire eurozone at risk and leading to a possible breakup of the euro system. Even though government and industries in most of these countries have reversed the downward slide and renewed their competitiveness by cutting spending, raising taxes, and laying off millions of employees, economic uncertainties remain, with some suggestion that Greece might need another bailout. In addition, even though debt is declining in many countries, the numbers of the unemployed are soaring. Moreover, citizens are questioning whether government leaders are telling the truth about the extent of the crisis. Some analysts think a broad breakup of the eurozone is unlikely, but eurozone economies are at a crossroads. Smart managers are rethinking what they would do in the event that a return to national currencies required a rethinking of everything from how to expand operations to how to pick suppliers and pay employees. The North American Free Trade Agreement (NAFTA) merged the United States, Canada, and Mexico into a single market. Intended to spur growth and investment, increase exports, and expand jobs in all three nations, NAFTA broke down tariffs and trade restrictions over a 15-year period in a number of key areas. Thus, by 2008, virtually all U.S. industrial exports into Canada and Mexico were duty-free. Over the first decade of NAFTA, U.S. trade with Mexico increased more than threefold, while trade with Canada also rose dramatically. Significantly, NAFTA spurred the entry of small businesses into the global arena. However, opinions over the benefits of NAFTA appear to be as divided as they were when talks began, with some people calling it a spectacular success and others referring to it as a dismal failure. In a 2011 survey of managers, only 53 percent of North American managers surveyed said they thought reducing trade barriers and increasing free trade was a positive thing, down from 74 percent in 2003. Although NAFTA has not lived up to its grand expectations, experts stress that it increased trade, investment, and income and continues to enable companies in all three countries to compete more effectively with rival Asian and European firms.
Why did the Hawthorne Studies lessen the influence of the Classical Perspective?
The Hawthorne studies lead to the Human Relations Movement, which believed that truly effective control comes from within the individual worker rather than from strict, authoritarian control. The studies found that human relations played key variable in increasing performance, and employees performed better when managers treated them positively. This strongly shaped management practice and research.
What is the World Trade Organization (WTO) and what does it do?
The WTO represents the maturation of GATT into a permanent global institution that can monitor international trade and has legal authority to arbitrate disputes on some 400 trade issues. As a permanent membership organization, the WTO is bringing greater trade liberalization in goods, information, technological developments, and services; stronger enforcement of rules and regulations; and greater power to resolve disputes among trading partners.
Define "Management."
The attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources
Describe the Classical Perspective on management and its sub-fields: Scientific Management, Bureaucratic Organizations, and Administrative Principles.
The classical perspective on management emerged during the nineteenth and early twentieth centuries when managers began developing and testing solutions to the mounting challenges of organizing, coordinating, and controlling large numbers of people and increasing worker productivity. Scientific management emphasizes scientifically determined jobs and management practices as the way to improve efficiency and labor productivity and management decisions would be based on precise procedures based on study. Frederick Winslow Taylor, known as the father of scientific management, proposed that workers "could be retooled like machines, their physical and mental gears recalibrated for better productivity." Henry Gantt developed the Gantt chart to measure and plan work, and the Gilbreths pioneered time and motion studies to promote efficiency. Bureaucratic Organizations, developed by Max Weber, believed in managing organizations on an impersonal, rational basis. Organization depends on rules and records, and managers use power instead of personality to delegate. Administrative Principles focused on the entire organization, and Henry Fayol identified five functions of management, Planning, Organizing, Commanding, Coordinating, and Controlling, and also developed 14 general principles of management such as Unity of command, Division of work, Unity of direction, and Scalar chain.
Distinguish between General, Task, and Internal Environments. Be able to recognize examples of each.
The general environment affects organizations indirectly. It includes social, economic, legal-political, international, natural, and technological factors that influence all organizations about equally. Changes in federal regulations or an economic recession are part of the organization's general environment, as are shifting social attitudes toward matters such as how and where the products we use are made. These events do not directly change day-to-day operations, but they do affect all organizations eventually. The task environment is closer to the organization and includes the sectors that conduct day-to-day transactions with the organization and directly influence its basic operations and performance. It is generally considered to include competitors, suppliers, customers, and the labor market. Students and suppliers are major elements of the task environment for university bookstores, for example. The internal environment includes the elements within the organization's boundaries and is composed of current employees, management, and especially corporate culture, which defines employee behavior in the internal environment and how well the organization will adapt to the external environment.
How are the Human Relations Movement and the Human Resources Perspective different?
The human relations movement believed that satisfied workers will produce more work. Gradually, views with deeper content began to emerge. The human resources perspective maintained an interest in worker participation and considerate leadership but shifted the emphasis to consider the daily tasks that people perform. The human resources perspective combines prescriptions for design of job tasks with theories of motivation. In the human resources view, jobs should be designed so that tasks are not perceived as dehumanizing or demeaning but instead allow workers to use their full potential.
What were the general strengths and weaknesses of the Classical Perspective?
The overall classical perspective as an approach to management was very powerful and gave companies fundamental new skills for establishing high productivity and effective treatment of employees. Scientific Management demonstrated the importance of compensation for performance, initiated the careful study of tasks and jobs, and demonstrated the importance of personnel selection and training, however, it did not appreciate the social context of work and higher needs of workers, acknowledge variance among individuals, and tended to regard workers as uninformed and ignored their ideas and suggestions.
Explain the Utilitarian, Individualism, Moral-Rights, Justice, and Practical approaches for evaluating ethical behavior.
The utilitarian approach holds that moral behavior produces the greatest good for the greatest number. The individualism approach contends that acts are moral when they promote the individual's best long-term interests. In theory, with everyone pursuing self-direction, the greater good is ultimately served because people learn to accommodate each other in their own long-term interest. Individualism is believed to lead to honesty and integrity because that works best in the long run. This concept is not considered appropriate today because it is easily misused to support one's personal gain at the expense of others. The moral-rights approach asserts that human beings have fundamental rights and liberties that cannot be taken away by an individual's decision. Thus, an ethically correct decision is one that best maintains the rights of those affected by it. To make ethical decisions, managers need to avoid interfering with the fundamental rights of others, such as the right to privacy, the right of free consent, or the right to freedom of speech. The justice approach holds that moral decisions must be based on standards of equity, fairness, and impartiality. Distributive justice requires that different treatment of people not be based on arbitrary characteristics. Procedural justice requires that rules be administered fairly. Rules should be clearly stated and consistently and impartially enforced. Compensatory justice argues that individuals should be compensated for the cost of their injuries by the party responsible. The practical approach sidesteps debates about what is right, good, or just and bases decisions on prevailing standards of the profession and the larger society, taking the interests of all stakeholders into account.
