MGMT Concepts Exam 1 (Ch 1, 2, 3, 4)
contingency approach
a management approach that recognizes organizations as different, which means they face different situations (contingencies) and require different ways of managing >no simplistic or universal rules for managers to follow, "if, then"
strategic alliance
a partnership between an organization and foreign company partner(s) in which both share resources and knowledge in developing new products or building production facilities >significant (direct investment) >Honda Motor and General Electric teamed up to produce a new jet engine
industrial revolution
a period during the late 18th century when machine power was substituted for human power, making it more economical to manufacture goods in factories than at home >these factories needed managers
total quality management (TQM)
a philosophy of management that is driven by continuous improvement and responsiveness to customer needs and expectations >needs statistical techniques that measure every critical variable in the organizations work processes >inspired by W. Edwards Deming and Joseph M. Juran
programmed decision
a repetitive decision that can be handled by a routine approach >no need to develop alternatives >lower-level managers >the manager offers to have the coat cleaned at the restaurant's expense
procedure
a series of sequential steps used to respond to a well-structured problem
Hawthorne Studies
a series of studies during the 1920s and 1930s that provided new insights into individual and group behavior >most important contributions to organizational behavior came out of this >provided foundation for current theories of motivation, leadership, group behavior and development
system
a set of interrelated and interdependent parts arranged in a manner that produces a unified voice >two basic types are closed and open
euro
a single common European currency
uncertainty
a situation in which a decision maker has neither certainty nor reasonable probability estimates available >choices are influenced by the psychological orientation of the decision-maker and the limited amount of info available >rely on intuition more than quantify a decision
certainty
a situation in which a manager can make accurate decisions bc all outcomes are known >few managerial decisions are made under this condition
risk
a situation in which the decision maker is able to estimate the likelihood of certain outcomes >more common condition >past personal experience or secondary info >ski resort calculated expected value by multiplying expected revenues by snowfall probabilities
uncertainty avoidance
a society's reliance on social norms and procedures to alleviate the unpredictability of future events
joint venture
a specific type of strategic alliance in which the partners agree to form a separate, independent organization for some business purpose >Hewlett-Packard has had numerous joint ventures with various suppliers around the globe to develop different components for its computer equipment
technological
concerned with scientific or industrial innovation >has changed more rapidly than any other element
sociocultural
concerned with societal and cultural factors such as values, attitudes, trends, traditions, lifestyles, beliefs, tastes, and patterns of behavior
demographic
concerned with trends in population characteristics such as age, race, gender, education level, geographic location, income, and family composition >constraints/challenges: different age groups all working together (Baby Boomers, Generation Y/Millennials, Post-Millennials); race/ethnicity >by 2050 China will have more people age 65+ than the rest of the world combined
management
coordinating and overseeing the work activities of others so their activities are completed efficiently and effectively >what managers do
institutional collectivism
degree to which individuals are encouraged by societal institutions to be integrated into groups within organizations and society
people orientation
degree to which management decisions take into account the effects on people in the organization
outcome orientation
degree to which managers focus on results or outcomes rather than how these outcomes are achieved
stability
degree to which organizational decisions and actions emphasize maintaining the status quo
team orientation
degree to which work is organized around teams rather than individuals
classical approach
first studies of management, early 20th century, which emphasized rationality and making organizations and workers as efficient as possible
2 types of economic systems
free market economy, planned economy
principles of management
fundamental rules of management that could be applied in all organizational situations and taught in schools
type of empoyee
hire people with personalities and attitudes consistent with customer service: friendly, attentive, enthusiastic, patient, good listening skills
Henri Fayol
his attention was directed at the activities of all managers, he believed that management was an activity to all business endeavors, government, and even the home >developed 14 principles of management
Frederick Winslow Taylor
his book "Principles of Scientific Management" was published 1911 (birth of management) describing the theory of scientific management
controlling
management function that involves monitoring, comparing, and correcting work performance >evaluating whether things are going as planned
planning
management function that involves setting goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate activities
leading
management function that involves working with and through people to accomplish organizational goals >help resolve work group conflicts, influence individuals or teams as they work, select the most effective communication channel, deal with employee behavior issues
Henry Mintzberg
management researcher who concluded that what managers do can best be described by looking at the managerial roles they engage in at work >concluded that managers perform 10 different roles, which are highly interrelated
informational roles
managerial roles that involve collecting, receiving, and disseminating information >monitor, disseminator, spokesperson
interpersonal roles
managerial roles that involve people and other duties that are ceremonial and symbolic in nature >figurehead, leader, liaison
decision roles
managerial roles that revolve around making choices >entrepreneur, disturbance handler, resource allocator, negotiator
4 popular contingency variables
organization size, routineness of task technology, environmental uncertainty, individual differences
strong cultures
organizational cultures in which the key values are intensely held and widely shared >strong cultures are associated with high organizational performance bc employees know what's expected of them and can act quickly to take care of the problem >most orgs have moderate to strong cultures meaning they have a relatively high agreement on what's important, what defines good employee behavior, and what it takes to get ahead
9 dimensions on which national cultures differ
power distance, uncertainty avoidance, assertiveness, humane orientation, future orientation, institutional collectivism, gender differentiation, in-group collectivism, performance orientation
environmental uncertainty
the degree of change and complexity in an organization's environment >two dimensions of uncertainty: (1) degree of change, (2) complexity in an organization's environment
performance orientation
the degree to which a society encourages and rewards group members for performance improvement and excellence
humane orientation
the degree to which a society encourages and rewards individuals for being fair, altruistic, generous, caring, and kind to others
ethnocentric attitude
the parochial belief that the best work approaches and practices are those of the home country >don't believe foreign countries have the needed skills or knowledge and don't trust them with key decisions or technology
3 types of challenges managers face in a global environment
the political/legal environment, the economic environment, the cultural environment
socialization
the process that helps employees adapt to the organization's culture >new employees learn the organizations way of doing things >Starbucks new employees go through 24 hrs of intensive training to turn them into baristas
heuristics
rules of thumb that managers use to simplify decision making >not always reliable, may lead to errors and biases in processing and evaluating info
universality of management
the reality that management is needed in all types and sizes of organizations, at all organizational levels, in all organizational areas, and in organizations no matter where located
develop your ability to think clearly
so you an make better choices at work and in life, doesn't come naturally, must study about decision making
Frank and Lillian Gilbreth
studied work to eliminate inefficient hand-and-body motions and experimented with the design and use of the proper tools and equipment for optimizing work performance
Henri Fayol
suggested that all managers perform 5 functions: planning, organizing, commanding, coordinating, and controlling >today we use four
organizational culture
the shared values, principles, traditions, and ways of doing things that influence the way organizational members act and that distinguish the organization from other organizations
5 characteristics of customer responsive cultures
type of employee, type of job environment, empowerment, role clarity, consistent desire to satisfy and delight customers
effectiveness
"doing the right things," or doing those work activities that will result in achieving goals >ends, attainment of organizational goals
efficiency
"doing things right," or getting the most output from the least amount of inputs >means of getting things done
6 characteristics of a decision-making process
(1) focus on what's important, (2) logical and consistent, (3) acknowledges both subjective and objective thinking and blends analytical with intuitive thinking, (4) requires only as much info and analysis as is necessary to resolve a particular dilemma, (5) encourages and guides the gathering of relevant information and informed opinion, (6) it's straight-forward, reliable, easy to use, and flexible
4 essential elements of EBMgt
(1) the decision maker's expertise and judgement, (2) external evidence that's been evaluated by the decision maker, (3) opinions, preferences, and values of those who have a stake in the decision, (4) relevant organizational (internal) factors such as context, circumstances, and organizational members >strength or influence of each of these elements on a decision will vary with each decision
3 ways the environment constrains and challenges managers
(1) through its impact on jobs and employment, (2)through the environmental uncertainty that is present, (3) through the various stakeholder relationships that exist between organizations and its external constituencies
3 things the definition of organizational culture implies
1. culture is a perception: employees perceive it on the basis of what they experience w/in the org 2. culture is descriptive: concerned with how members perceive and describe the culture, not whether they like it 3. culture is shared: even though individuals have different backgrounds they describe the organization's culture in similar terms
3 other economic issues managers need to understand
1. currency exchange rates: profits can vary dramatically 2. inflation rates: monitor to anticipate possible changes in a country's monetary policies and make good decisions on purchasing and pricing 3. diverse tax policies: understand to minimize business's overall tax obligation
Taylor's 4 scientific management principles
1. develop a science for each element of an individual's work to replace the old "rule-of-thumb" method 2. scientifically select and then train, teach, and develop the worker 3. heartily cooperate with the workers to ensure that all work is done in accordance with the principles of the science that has been developed 4. divide work and responsibility almost equally between management and workers, management does all work for which it is better suited than the workers
3 common characteristics of an organization
1. distinct purpose: typically expressed through goals the organization hopes to accomplish 2. composed of people: which are necessary for an organization to achieve its goals 3. deliberate structure: within which members do their work
3 reasons why managers are important
1. in uncertain, complex and chaotic times managers identify issues and craft responses 2. they're critical to getting things done: create and coordinate workplace systems, if things aren't getting done they find out why and fix it 3. the relationship of manager to their employees and supervisors is the single most important variable in employee productivity and loyalty
3 choices during uncertainty
1. maximax: maximizing the maximum possible payoff (optimistic) 2. maximin: maximizing the minimum possible payoff (pessimistic) 3. minimax: minimize the maximum "regret" >Visa strategies example
2 practices to help maintain culture
1. when selecting employees managers judge candidates on the job requirements and how well they might fit into the organization 2. through what top managers say and how they behave they establish norms and can have a positive effect on employee behavior >Gravity CEO raised minimum wage to $70,000 and cut his pay to do so, the company's financial performance soared
3 characteristics of problems
1. you must be aware of the problem, be sure to identify the actual problem rather than a symptom of the problem 2. you must be under pressure to act, a problem without pressure to act can be postponed 3. you must have the authority or resources to act
globalization video
>1986, global trade reached $2,000 billion >1996, it reached $5,200 billion, 260% increase >due to this increase foreign made products that were rarely seen in countries around the world prior to globalization became a common sight >globalization is a process where countries around the world are becoming closer in a number of areas; it influences people, immigration, employment, ideas and knowledge >the main economic expression of globalization is international trade, it brings knowledge w/in reach, riches our knowledge and expands it >world trade has grown at twice the rate of the global economy since 1960 as a result of globalization in the financial markets, payments, injections of capital, and cross-boarder investments > globalization had caused the rise of many world powers in history (China: large export machine)
achievement v. nurturing
>achievement: values such as assertiveness, acquiring money and goods, and competition prevail >nurturing: values such as relationships and concern for others prevail
degree of change
>characterized as being dynamic or stable
technology
>cloud computing, social media, and robotics are all changing how things get done in the workplace >managers need to get employees on board with new technology and ensure that they are comfortable with it, can use it, and understand how it improves their lives
Hofstede's Five Dimensions of National Culture video
>different cultures have different views of the world based on their culture and history, understanding these areas and being able to identify them will help you to work with and understand people of varying backgrounds and cultures >different cultures have different views of life and business, these dimensions have shaped cultures, and these cultures are shaped by these dimensions >US is an aggressive culture, we strive for success, are driven to succeed and thrive on competition, that culture promotes those aspects of our society >individualism (US, "I") v. collectivism (Japan, "we") >uncertainty avoidance: US low, Japan high >power distance: US and Japan are the same >masculinity v. femininity: US low, Japan high
job and employment
>economic downturns result in higher unemployment and place constraints on staffing and production quotas for managers >external conditions affect the types of jobs available and how those jobs are created and managed >changing conditions can create demands for more temporary work and alternative work arrangements (freelancers hired to work on an as-needed basis)
customers
>employee attitudes and behaviors play a big role in customer satisfaction and return on investment >managers must create a customer-responsive organization where employees are friendly, courteous, accessible, knowledgable, and prompt in responding to customer needs >successful airlines have friendly announcements and offer amenities
exporting and importing
>exporting: making products domestically and selling them abroad >importing: acquiring products made abroad and selling them domestically >both usually entail minimal investment and risk, which is why so many small businesses often use these approaches to doing business globally
high power distance v. low power distance
>high power distance: accepts wide differences in power; great deal of respect for those in authority >low power distance: plays down inequalities; employees are not afraid to approach nor are in awe of the boss
high uncertainty avoidance v. low uncertainty avoidance
>high uncertainty avoidance: threatened with ambiguity and experience high levels of anxiety >low uncertainty avoidance: comfortable with risks; tolerant of different behavior and opinions
individualistic v. collectivist
>individualistic: people look after their own and family interests >collectivist: people expect the group to look after and protect them
long-term orientation v. short-term orientation
>long-term orientation: people look to the future and value thrift and persistence >short-term orientation: people value tradition and the past
employee
>progressive companies recognize the importance of treating employees well not only bc it's the right thing to do but bc it is good business, well treated employees are more likely to go the extra mile >regularly providing performance feedback provides the foundation for discussing developmental opportunities >successful managers often embrace work-life practices
Whole Foods: Culture and Community website
>purpose is to nourish people and the planet: quality is a state of mind at Whole Foods, we are a purpose driven company that aims to set the standards of excellence for food retailers, we recognize the interdependence among our stakeholders, our success is optimized by a win-win-win-win strategy and all our stakeholders are benefiting >values: we sell the highest quality natural and organic foods, we satisfy and delight our customers, we promote team member growth and happiness, we practice win-win partnerships with our suppliers, we create profits and prosperity, we care about our communities and the environment
creating a sustainability culture
>rituals can be used to create and maintain sustainability cultures (Social Responsibility Day) >through rewards can also be used >Styron LLC management begins each corporate meeting with the topic of sustainability, employee's bonuses are tied to meeting sustainability goals
where culture comes from
>the original source of an organizations culture is usually a reflection of the vision or mission of the organization's founders >the culture is a result of the interaction between the founder's biases and assumptions and what the first employees subsequently learned from their own experiences
One Toyota video
Jim Lentz, Toyota North American CEO, was asked what he needed to make the business sustainable for the next 50 year >he decided that they needed to create "one Toyota" by getting all affiliates in one location >moved from Torrance, California to Plano, Texas
4 global trade mechanisms
World Trade Organization (WTO), International Monetary Fund (IMF), World Bank Group, Organization for Economic Cooperation and Development
decision
a choice among two or more alternatives >all managers and all organizational members make decisions
transnational or borderless organizations
a MNC in which artificial geographical barriers are eliminated (geocentric attitude) >managers choose this approach to increase efficiency and effectiveness in a competitive global marketplace >Ford Motor Company is pursuing the second generation of what is calls the One Ford concept as it integrates its operations around the world
Organization for Economic Cooperation and Development (OECD)
a Paris based international economic organization whose mission is to help its 34 member countries achieve sustainable economic growth and employment and raise the standard of living in member countries while maintaining financial stability in order to contribute to the development of the world economy >when needed, the OECD gets involved in negotiations with OECD countries so they can agree on "rules of the game" for international cooperation
multinational corporation (MNC)
a broad term that refers to any and all types of international companies that maintain operations in multiple countries
sustainability
a company's ability to achieve its business goals and increase long-term shareholder value by integrating economic, environmental, and social opportunities into its business strategies >greening of management >Microsoft reducing its emissions of carbon dioxide
organization
a deliberate arrangement of people to accomplish some specific purpose
problem
a discrepancy between an existing and a desired condition, an obstacle that makes it difficult to achieve a desired goal or purpose >every decision starts with a problem >Amanda is a sales manager whose reps need new laptops >problem identification is subjective
bureaucracy
a form of organization characterized by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships >not popular today but bureaucratic mechanisms are necessary to ensure that resources are used efficiently and effectively
World Trade Organization (WTO)
a global organization of 161 countries that deals with the rules of trade among nations >the goal of the WTO is to help countries conduct trade through a system of rules, it plays an important role in monitoring, promoting, and protecting global trade >Airbus received improper EU subsidies for the A380 super jumbo jet hurting its rival Boeing, any member found to have provided improper subsidies is obliged to bring its policies into compliance with global trade rules >US, the EU, and Japan filed a challenge with the WTO against China's export restrictions on essential minerals
World Bank Group
a group of five closely associated institutions that provides financial and technical assistance to developing countries >its goal is to promote long-term economic development and poverty reduction by providing members with technical and financial support >during the recent global recession, financial commitments by the Word Bank Group reached $100 billion as it helped nations respond to and recover from the economic downturn
policy
a guideline for making decisions >typically contains an ambiguous term that leaves interpretation up to the decision maker (satisfied, whenever possible, competitive)
Association of Southeast Asian Nations (ASEAN)
a trading alliance of 10 Southeast Asian nations >biggest problem getting 6 other countries to join is that individual members haven't been willing to sacrifice for the common good >the large differences in wealth among ASEAN members have made it difficult to create common standards bc national standards remain so far apart >Jan 1, 2010 China and ASEAN launched an ambiguous free trade agreement making it the world's 3rd largest trade agreement >in the future, the Southeast Asian region promises to be one of the fastest-growing and increasingly influential economic regions of the world
European Union (EU)
a union of 28 European nations created as a unified economic and trade entity >currently its membership covers a base of more than half a billion people and 16% of the world's global exports and imports >larger economic source than the US and China combined and is a major source of world demand for goods and services >the last few years have been difficult economically for the EU and its members, however the economic recover that began in 2013 is expected to continue
geocentric attitude
a world-oriented view that focuses on using the best approaches and people from around the globe >managers have a global view and look for the best approaches and people regardless of origin >successful managers need this attitude in today's world
satisfice
accept solutions that are "good enough"
Robert Owen, Hugo Munsterberg, Mary Parker Follett, Chester Barnard
all believed that people were the most important asset of the organization and should be managed accordingly >their ideas provided the foundation for employee selection procedures, motivation programs, and work teams
global company
an MNC that centralizes management and other decisions in the home country (ethnocentric attitude) >although these companies may have considerable global holdings, management decisions with company-wide implications are made from headquarters in the home country
multidomestic corporation
an MNC that decentralizes management and other decisions to the local country (polycentric attitude) >local employees typically are hired to manage the business, and marketing strategies are tailored to that country's unique characteristics >in parts of Europe Nestle sells products that are not available in the US or Latin America
North American Free Trade Agreement (NAFTA)
an agreement among the Mexican, Canadian, and U.S. governments in which barriers to trade have been eliminated >went into effect Jan 1, 1994 and today is the world's largest trading block in terms of GDP >eliminating the barriers to free trade (tariffs, import licensing requirements, custom user fees) has strengthened the economic power of all three countries
scientific management
an approach that involves using scientific methods to define the "one best way" for a job to be done
general administrative theory
an approach to management that focuses on describing what managers do and what constitutes good management practice
planned economy
an economic system in which economic decisions are planned by a central government >China's economy founded on communism which draws on the principle of community ownership; all property, businesses, and natural resources are community owned but controlled by the single political party (Communist Party); the government provides basic necessities based on need
free market economy
an economic system in which resources are primarily owned and controlled by the private sector >US economy based on the idea of capitalism in which the government does not posses ownership of all land, businesses, or natural resources, relies on market sources in which supply and demand for products, services, and labor determine monetary value
rule
an explicit statement that tells managers what can or cannot be done
escalation of commitment
an increased commitment to a previous decision despite evidence it may have been wrong >don't want to admit that their initial decision may have been flawed >challenger space shuttle disaster
Global Leadership and Organizational Behavior Effectiveness (GLOBE) program
an ongoing research program that extended Hofstede's work by investigating cross-cultural leadership behaviors and giving managers additional information to help them identify and manage cultural differences >lead by Robert House, identified nine dimensions on which national cultures differ
licensing
an organization gives another organization the right to make or sell its products using its technology or product specifications >primarily used by manufacturing organizations that make or sell another company's products >Anheuser-Busch InBev licensed the right to brew and market its Budweiser beer to brewers
franchising
an organization gives another organization the right to use its name and operating methods >primarily used by service organizations that want to use another company's name and operating methods >South Koreans can indulge in Dunkin' Donuts coffee bc of franchises in the country
International Monetary Fund (IMF)
an organization of 188 countries that promotes international monetary cooperation and provides advice, loans, and technical assistance to establish and maintain financial stability and strengthen economies >during the global financial turmoil of the last few years, the IMF was on the forefront of advising countries and governments in getting through the difficulties
how culture affects managers
an organization's culture is important bc it establishes constraints on what managers can do >ready-aim-fire culture: managers will study and analyze proposed projects endlessly before committing to them >ready-fire-aim culture: managers take action then analyze >in an org whose culture conveys a basic distrust of employees, managers are likely to use an authoritarian leadership style, rather than democratic
stakeholders
any constituencies in the organization's environment that are affected by an organization's decisions and actions >these groups have a stake in or are significantly influences by what the organization does, in turn these groups can influence the organization >Starbucks coffee bean farmers, employees, and competitors (stakeholders) may influence decisions/actions of Starbucks managers
design thinking
approaching management problems as designers approach design problems >opening up your perspective and gaining insight by using observation and inquiry skills and not rely simply on rational analysis >PepsiCo new Pepsi Spire machine which changes the way customer and machine interact
debates
are employees allowed to express opinions and put forth ideas for consideration and review
challenge and involvement
are employees involved in, motivated by and committed to the long-term goals and success of the organization
trust and openness
are employees supportive and respectful of eachother
the challenge of openness
as companies compete in the international arena, the openness that is necessary to conduct business successfully in a global environment poses great challenges >the increased threat of terrorism, economic interdependence of trading companies (domino-effect), and significant cultural differences >successful global managers need to have great sensitivity and understanding
dynamic environment
components of the environment change frequently >record music industry faces dynamic environment because of digital formats and music downloading sites >if change can be accurately anticipated, it's not considered dynamic
global trade mechanisms
as trade issues arise, global trade systems ensure that trade continues efficiently and effectively >one of the realities of globalization is the interdependence of countries (what happens in one can impact others) >the financial crisis that started in the US threw things out of control but did not collapse bc of governmental interventions
global mind set
attributes that allow a leader to be effective in cross-cultural environments >has 3 components 1. intellectual capital: knowledge of international business and the capability to understand how business works on a global scale 2. psychological capital: openness to new ideas and experiences 3. social capital: ability to form connections and build trusting relationships with people who are different from you
understand cultural differences
best way to make decisions depends on values, beliefs attitudes, and behavioral patterns >L'Oreal encourages open debate, but in Southeast Asia confrontation is negative bc it makes the other person lose face
stable environment
components of the environment change minimally >Zippo lighters have few competitors and little technological change, main concern is decrease of tobacco smokers
freedom
can employees independently define their work, exercise discretion, and take initiative in their day-to-day activities
material artifacts and symbols
can tell you what type of work environment it is (formal, causal, fun, serious) and create an organization's personality >convey to employees who is important and kinds of behavior (risk taking, conservative) that are expected >include layout of facilities, how employees dress, type of automobiles provided to top executives
3 different decision making conditions
certainty, risk, uncertainty
8 characteristics of an innovative culture (Goran Ekvall)
challenge and involvement, freedom, trust and openness, idea time, playfulness/humor, conflict resolution, debates, risk taking
select an alternative
choose the best alternative or the one that generated the highest total when analyzing the alternatives
consistent desire to satisfy and delight customers
clarify organization's commitment to doing whatever it takes, even if it's outside an employee's normal job requirements
4 major approaches to management theory
classical, behavioral, quantitative, contemporary
regional trading alliances
countries enter into these alliances mainly with the goal of stimulating economic growth >reducing trade barriers such as tariffs or taxes imposed upon imported goods opens new markets for companies in participating countries >Ford and General Motors participation in NAFTA has let them establish facilities in Mexico where labor costs are lower and to sell those vehicles in the US without restrictive tariffs
3 current cultural issues that managers should consider
creating an innovative culture, creating a customer-responsive culture, creating a sustainability culture
decision criteria
criteria that define what's important or relevant to resolving a problem >Amanda decides that memory and storage capabilities, display quality, battery life, and warranty are the relevant criteria in her decision
cultural intelligence
cultural awareness and sensitivity skills >encompasses 3 main dimensions 1. knowledge of culture as a concept - how cultures vary and how they affect behavior 2. mindfulness - the ability to pay attention to signals and reactions in different cross-cultural situations 3. behavioral skills - using one's knowledge and mindfulness to choose appropriate behaviors in those situations
2 suggestions of what global managers need
cultural intelligence, global mind set
common stakeholders
customers, social and political action groups, competitors, trade and industry associations, governments, media, suppliers, communities, shareholders, unions, and employees (internal)
6 ways the manager's job is changing
customers, technology, social media, innovation, sustainability, and the employee
bounded rationality
decision making that's rational, but limited (bounded) by an individual's ability to process information >bc they can't possibly analyze all information on alternatives, managers satisfice >accepting first job choice that is okay but does not meet all needs (satisfice)
aggressiveness
degree to which employees are aggressive and competitive rather than cooperative
innovation and risk taking
degree to which employees are encouraged to be innovative and take risks >used by Tesla to develop better batteries for cars
attention to detail
degree to which employees are expected to exhibit precision, analysis, and attention to detail
rational decision making
describes choices that are logical and consistent and maximize value >making decisions in the best interest of the organization, not his/her own interest >problem faced would be clear and unambiguous, and the decision maker would have a clear and specific goal and know all possible alternatives and consequences
immediate gratification bias
describes decision-makers who tend to want immediate rewards and avoid immediate costs
type of job environment
design jobs so employees have as much control as possible to satisfy customers, without rigid rules and procedures
Max Weber
developed a theory of authority structures and relations based on an ideal type of organization called a bureaucracy
Geert Hofstede
developed one of the most widely referenced approaches to help managers better understand differences between national cultures >his research found that countries vary on 5 dimensions of national culture
foreign subsidiary
directly investing in a foreign country by setting up a separate and independent production facility or office >can be managed as a multidomestic organization (local control) or as a global organization (centralized control) >involves the greatest commitment of resources and poses the greatest amount of risk
Fayol's 14 principles of management
division of work, authority, discipline, unity of command, unity of direction, subordination of individual interests to the general interest, remuneration, centralization, scalar chain, order, equity, stability of tenure of personnel, initiative, esprit de corps >today serves as a frame of reference which many current management concepts has evolved
idea time
do individuals have time to elaborate on new ideas before taking action
conflict resolution
do individuals make decisions and resolve ideas based on the good of the organization versus personal interest
risk taking
do managers tolerate uncertainty and ambiguity, and are employees rewarded for taking risks
economic
encompasses factors such as interest rates, inflation, changes in disposable income, stock market fluctuations, and business cycle stages >constraints/challenges: commodity (raw material) costs are increasing; slow, fragile recovery of global economies; income gap between the rich and the rest
analyze alternatives
each of the alternatives must now be critically analyzed by evaluating it against the criteria established >multiple each alternative by the assigned weight, the total score for each alternative is the sum of its weighted criteria
6 external conditions that may affect the organization (constraints and challenges)
economic, demographic, political/legal, sociocultural, technological, global
global
encompasses issues associated with globalization and a world economy, global competitors and global consumer markets
3 possible global attitudes managers might have
ethnocentric, polycentric, geocentric
5 different aspects of intuition
experience-based decisions, affect-initiated (feelings) decisions, cognitive-based decisions, subconscious mental processing, values or ethics based decisions
innovation
exploring new territory, taking risks, and doing things differently >success in business today demands innovation >problem is getting everyone involved in innovative process >Best Buy idea of a "team close" that an employee came up with
gender differentiation
extent to which a society maximizes gender role differences as measured by how much status and decision-making responsibilities women have
social media
forms of electronic communication through which users create online communities to share ideas, information, personal messages, and other content >platforms such as Facebook and Twitter have moved beyond personal uses to work >managers need to understand their powers and dangers
empowerment
give service-contact employees the digression to make day-to-day decisions on job-related activities
6 approaches organizations use to go international
global sourcing (global outsourcing), exporting and importing, licensing, franchising, strategic alliance, foreign subsidiary
create standards for good decision making
good decisions are forward looking, use available information, consider all available and viable options, and do not create conflicts of interest
8 steps of the decision-making process
identifying a problem, identifying decision criteria, allocating weights to the criteria, developing alternatives, analyzing alternatives, selecting an alternative, implementing an alternative, and evaluating decision effectiveness
allocate weights to the criteria
if the relevant criteria aren't equally important, the decision maker must weight the items in order to give them the correct priority in the decision
Adam Smith
in 1776 published "The Wealth of Nations" in which he argued the economic advantages that organizations and society would gain from division of labor
systems theory
in 1938, Chester Barnard wrote in "The Functions of an Executive" that an organization functioned as a cooperative system
political/legal
includes the general political stability of countries in which an organization does business and the specific attitudes that elected officials have toward business >federal, state, and local governments can influence what organizations can/cannot do
Hofstede's 5 dimensions of national culture
individualistic v. collectivist, high power distance v. low power distance, high uncertainty avoidance v. low uncertainty avoidance, achievement v. nurturing, long-term orientation v. short-term orientation
7 dimensions of an organization's culture
innovation and risk taking, attention to detail, outcome orientation, people orientation, team orientation, aggressiveness, stability
6 elements of total quality management
intense focus on the customer, concern for continual improvement, process focused, improvement in the quality of everything the organization does, accurate measurement, empowerment of employees
evaluate decision effectiveness
involves evaluating the outcome or result of the decision to see whether the problem was resolved, if the problem still exists the manager needs to assess what went wrong
playfulness/humor
is the workplace spontaneous and fun
technical skills
job-specific knowledge and techniques needed to proficiently perform work tasks >more important for first-line managers bc they typically manage employees who use tools and techniques to provide the products or service
the political/legal environment
legal and political forces are unique to each country and sometimes the laws of one contradict those of another, or are ignored all togehter >US managers are used to a stable legal and political system, this is not the same in all countries >managers must stay informed of the specific laws in countries where they do business >some countries have risky political climates (armed commandos raided BP's office in Russia)
develop alternatives
list the viable alternatives that could resolve the problem >Amanda identifies 7 laptops as possible choices
contemporary approach
looking at what is happening in the external environment outside the boundaries of the organization
intuitive decision making
making decisions on the basis of experience, feelings, and accumulated judgement >can complement both rational and bounded rational decision making >can't replace rational but plays an important role
organizing
management function that involves arranging and structuring work to accomplish the organization's goals >what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made
top managers
managers at or near the upper levels of the organization structure who are responsible for making organization-wide decisions and establishing the goals and plans that affect the entire organizations >titles: executive vice president, president, managing director, chief operating officer, chief executive officer
first-line (frontline) managers
managers at the lowest level of management who manage the work of non-managerial employees >titles: supervisors, shift managers, district managers, department managers, officer managers
middle managers
managers between the lowest level and top levels of the organization who manage the work of first-line managers >titles: regional manager, project leader, store manager, division manager
2 views in how much difference a manager makes on a organization's success or failure
omnipotent, symbolic
4 different types of international organizations
multinational, multidomestic, global, transitional
overconfidence bias
occurs when decision-makers tend to think that they know more than they do or hold unrealistically positive views of themselves and their performance
12 common decision errors and biases of managers
overconfidence bias, immediate gratification bias, anchoring effect, selective perception bias, confirmation bias, framing bias, availability bias, representation bias, randomness bias, sunk costs error, self-serving bias, hindsight bias
four functions of management
planning, organizing, leading, controlling
unstructured problems
problems that are new or unusual and for which information is ambiguous or incomplete >how HR professionals should modify their health insurance plans to comply with the Patient Protection and Affordable Care Act
3 types of programmed decisions
procedure, rule, policy
2 types of decisions
programmed, nonprogrammed
Robert L. Katz
proposed that managers need three critical skills in managing >technical, human, conceptual
global sourcing (global outsourcing)
purchasing materials or labor from around the world wherever it is cheapest >minimal investment >goal is to take advantage of lower costs in order to be more competitive >Mass. General Hospital uses radiologists in India to interpret CT scans
implement the alternative
put the decision into action by conveying it to those affected and getting their commitment to it >more likely to if people who must implement a decision participate in the process
4 perspectives on how managers make decisions
rationality, bounded rationality, intuition, evidence-based management
role clarity
reduce uncertainty about what service-contact employees can and cannot do by continual training on product knowledge, listening and other behavioral skills
self-serving bias
refers to decision-makers who are quick to take credit for their success and blame failure on outside factors
rituals
repetitive sequence of activities that express and reinforce the key values of the organization, which goals are most important, and which people are important or expendable >Facebook founder Zuckerberg ended employee meetings by pumping his fists and leading chant of domination >Mary Kay Cosmetics has an annual awards ceremony where rewards and price incentives are given for sales goal achievements
Toyota building corporate retreat center article
semi-rural area in Denton County will be used as a corporate retreat center hosting employee retreats, internal meetings, and special company events >they are taking steps to eliminate any negative impact that there might be such as retaining an around-the-clock caretaker and building a sound wall
manager
someone who coordinates and oversees the work of other people so organizational goals can be accomplished
managerial roles
specific actions or behaviors expected of and exhibited by a manager >refers to specific categories of managerial behavior
4 ways employees learn an organization's culture
stories, rituals, material artifacts and symbols, language
structured problems
straightforward, familiar, and easily defined problems >server spills a drink on a customer's coat
closed systems
systems that are not influenced by and do not interact with their environment
open systems
systems that interact with their environment >today when we describe organizations as systems, we mean open >an organization takes inputs (resources) from the environment and transforms them into outputs distributed to the environment
3 critical skills managers need in managing
technical, human, conceptual
hindsight bias
tendency for decision-makers to falsely believe, once the outcome is known, that they would have accurately predicted the outcome
therblings
the Gilbreths devised a classification scheme to label 17 basic hand motions (search, grasp, hold), >gave a more precise way of analyzing a worker's exact hand movements
conceptual skills
the ability to think and to conceptualize about abstract and complex situations, see organization as a whole, understand the relationship among various subunits, visualize how the organization fits into its broader environment, can get everyone on the same page >most important to top managers
interpersonal skills
the ability to work well with other people individually and in a group >equally important to all levels of management bc all managers deal with people
division of labor (job specialization)
the breakdown of jobs into narrow and repetitive tasks >Adam Smith concluded it increased productivity by increasing each worker's skill and dexterity, saving time lost in changing tasks and creating labor-saving inventions and machinery >meal preparation team, hospital surgery team
power distance
the extent to which a society accepts that power in institutions and organizations is distributed equally
assertiveness
the extent to which a society encourages people to be tough, confrontational, assertive, and competitive rather than modest and tender
in-group collectivism
the extent to which members of a society take pride in membership in small groups, such as their family and circle of close friends, and organizations in which they are employed
future orientation
the extent to which society encourages and rewards future-oriented behaviors such as planning, investing in the future, and delaying gradification
creating an innovative culture
the most important driver of innovation for companies is a supportive culture >IDEO takes ideas corporations bring and turns them into reality, it's critical that IDEO's culture support creativity and innovation
simple
the number of components (competitors, customers, suppliers, government agencies) and the need for sophisticated knowledge is minimal >Hasbro Toy company simplified its environment by acquiring many of its competitors
environmental complexity
the number of components in an organization's environment and the extent of the organization's knowledge about those components >characterized as being simple or complex
organizational behavior (behavioral approach)
the study of the actions of people at work >is seen today in way managers design jobs, work with teams, and communicate
evidence-based management (EBMgt)
the systematic use of the best available evidence to improve management practice >Bon-Ton stores used data-driven decision approach to devise a more precise pre-employment assessment test
quantitative approach (management science)
the use of quantitative techniques to improve decision making >today used for things such as budgeting, scheduling, quality control decisions >airline using research in space-time geometry to create "reverse pyramid" process to board planes faster
national culture
the values and attitudes shared by individuals from a specific country that shapes their behavior and beliefs about what is important >has a greater influence effect on employees than their organization's culture >is steeped in a country's history (society's social traditions, political and economic philosophy, and legal system)
big data
the vast amount of quantifiable information that can be analyzed by highly sophisticated data processing >collecting and analyzing data for data's sake is wasted effort >goals are needed when collecting and using this type of information >correlation does not equate with cause and effect
omnipotent view of management
the view that managers are directly responsible for an organization's success or failure >managers are held accountable for an organization's poor performance (normally fired) >Twitter Chief Executive was fired summoning bold thinking bc the company's growth had slowed
symbolic view of management
the view that much of an organization's success or failure is due to external forces outside managers' control >performance is influenced by factors over which managers have little control such as the economy, customers, governmental policies
polycentric attitude
the view that the managers in the host country know the best work approaches and practices for running their business
complex
there are a number of dissimilar components and a high need for sophisticated knowledge >Pinterest managers must know a great deal about their internet service provider's operations to ensure their website is working properly
external environment
those factors outside the organization that affect its performance >BMW replaced its old way of doing things at dealerships bc of technological advances
stories
typically contain a narrative of significant events or people, including the organization's founders, rule breaking, and reaction to past mistakes >help employees learn culture by providing explanations and legitimacy for current practices, exemplify what is important to the organization, and provide compelling pictures of an organization's goals >Disney employees hear the story of Walt asking an employee to help get more money out of the park, when their ideas worked they received higher revenue
5 guidelines for effective decision making
understand cultural differences, create standards for good decision making, know when its times to call it quits, use an effective decision-making process, develop your ability to think clearly
nonprogrammed decisions
unique and nonrecurring decisions that require a custom-made solution >upper-level managers
language
used to identify and unite members of a culture, by learning this language members attest to their acceptance of the culture and their willingness to help preserve it >Build-A-Bear employees are told to "strive for five" meaning to try to sell each customer 5 items
US cultural characteristics
very informal, direct, competitive, achievers, independent/individualistic, questioners, dislike silence, value punctuality, value cleanliness
parochialism
viewing the world solely though your own perspectives, leading to an inability to recognize differences between people >they ignore other's values and customs thinking "ours is better than theirs" >is an obstacle for many US managers and stems from monolingualism
sunk costs error
when a decision-maker forgets that current choices cannot correct the past >instead of ignoring sunk costs, the decision-maker cannot forget them >in assessing choices, the individual fixates on past expenditures rather than future consequences
representation bias
when decision-makers assess the likelihood of an even based on how closely it resembles other events or sets of events >seeing identical situations when none exist
anchoring effect
when decision-makers fixate on initial information as a starting point and then, once set, fail to adequately adjust for subsequent information
confirmation bias
when decision-makers seek out information that reaffirms their past choices and discount information that contradicts their past judgement
framing bias
when decision-makers select and highlight certain aspects of a situation while excluding others
selective perception bias
when decision-makers selectively organize/interpret events based on their biased perception
availability bias
when decision-makers tend to remember events that are the most recent and vivid in their memory
randomness bias
when decision-makers try to create meaning out of random events
know when its time to call it quits
when it's evident that a decision isn't working, don't be afraid to call it quits >CEO of Marks and Spencer closed dozens of stores to boost profitability, previous CEO didn't want to believe their decision was bad