MGT exam 2
the intuition model (part of nonrational model)
"it just feels right"
autonomous intelligence
(self driving cars) humans give operational control to the machine
4 stages associated with rational decision making:
1. identify the problem or opportunity 2. think up alternative solutions 3. evaluate alternatives and select a solution 4. implement and evaluate the solution chosen
wages or salaries
base pay consists of basic wage or salary paid employees in exchange for doing their jobs
sustainable competitive advantage
exists when other companies cannot duplicate the value delivered to customers.
nonrational decision making:
explains how managers make decisions; they assume that decision making is nearly always uncertain and risky, making it difficult to make optimal decisions.
EEO (discrimination laws) do NOT allow the use of ______________
hiring quotas
stage 1 of rational decision making
identify the problem of opportunity
what is wrong with the rational model?
it is prescriptive, describing how managers ought to make decisions.. not how they actually do.
intuition
making a choice without the use of conscious thought or logical inference
is the firm organized to exploit the resource or capability?
organization
the overconfidence bias: blind to our own blindness (9 common decision making biases)
the bias in which people's subjective confidence in their decision making is greater than their objective accuracy
the vertical hierarchy (in organizational chart)
the chain of command. shows the official communication of network- who talks to whom. (EX: in a 2 person organization owner might communicate with a secretary or assistance. In a complex org, the president talks principally to the VP who turns to assistant VP)
decision making
the process of identifying and choosing alternative courses of action
incentives
to attract high-performing employees and to induce those already employed to be more productive, many organizations offer incentives, such as commissions, bonuses, profit-sharing plans and stock options.
the likely sources for staffing
you can recruit employees from either inside or outside the org. In looking at those inside, you need to consider which employees are motivated, trainable, and promotable and what kind of training your organization might have to do.
support from the top (3 key attributes among analytics competitors)
"a companywide embrace of analytics impels changes in culture, processes, behavior and skills for many employees" says davenport.
integrity tests
"assess attitudes and experiences related to a person's honesty, dependability, trustworthiness, reliability, and pro-social behavior"
3rd principle of strategic positioning: strategy involves creating a "fit" among activities
"fit" has to do with the ways a company's activities interact and reinforce one another. EX: a mutual fund follows a low-cost strategy and aligns all its activities accordingly, distributing funds directly to consumers and minimizing portfolio turnover. However, when the short-lived airline tried to march some, but not all, of southwests airlines activities, it was not successful b/c it did not apply southwests entire interlocking system.
closed shop
(ILLEGAL) employer may hire only workers for a job who are already in the union
strategic positioning
(according to porter) attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company
rational model of decision making:
(also called classical model) explains how managers should make decisions; it assumes managers will make logical decisions that are the optimal means of furthering the organization's best interests
current reality assessment (step 2 of strategic management process)
(also organizational assessment) to look at where the organization stands and see what is working and what could be different so as to maximize efficiency and effectiveness in achieving the organization's mission
open shop
(applies in 22 "right to work" states) workers may choose to join or not join a union
agency shop
(applies to public sector teacher in some states, prohibited in others) workers must pay equivalent of union dues but aren't required to join the union
benchmarking
(comparing with the best) is a process by which a company compares its performance with that of high-performing organizations (EX: southwest might compare its on-time departures with key competitors and the industry as a whole)
internal recruiting
(hiring from the inside) means making people already employed by the org, aware of job openings. This means employees need to take responsibility for managing their own careers.
external recruiting
(hiring from the outside) means attracting job applicants from outside the org.
Human resources management
(managing an organization's most important resource) consists of the activities managers perform to plan for, attract, develop, and retain an effective workforce.
union shop
(not allowed in 22 "right to work" states) workers arent required to be a union member when hired for a job but must join within a specified time
the defensive strategy (3 overall types of corporate strategy)
(or a retrenchment strategy) a grand strategy that involves reduction in the organization's efforts
performance tests
(or skills tests) measure performance on actual job tasks-so called job tryouts- as when computer programmers take a test on a particular programming language or middle managers work on a small sample project
knowledge workers
(potential of brain workers) is someone whose occupation is principally concerned with generating or interpreting information, as opposed to manual labor
social capital
(potential of strong and cooperative relationships) the economic or productive potential of strong, trusting, and cooperative relationships. (employees hired through referrals tend to stay longer at jobs, as a result of a better person-organization fit)
contingency planning
(predicting alternative futures) also known as scenario planning and analysis- is the creation of alternative hypothetical but equally likely future conditions (EX: scenarios may be created with spreadsheet software such as excel to present alternative combinations of different factors- such as economic pictures, different strategies by competitors, etc)
assessment center
(some companies have this) in which management candidates participate in activities for a few days while being assessed by evaluators (more effective than performance)
organizational culture: the shared assumptions that affect how work gets done
(sometimes called corporate culture) defined as the set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments
the union security clause
(the basic underpinning of union security is this) the part of the labor-management agreement that states that employees who receive union benefits must join the union, or at least pay dues do it.
interviewing
(unstructured, situational and behavioral-description) the most commonly used employee-selection technique, may take place face to face, by videoconference or-the internet.
the 5 steps of the strategic-management process
1. establish the mission, vision, and values statement 2. asses the current reality 3. formulate corporate, business and functional strategies 4. execute the strategies 5. maintain the strategic control
an election is held by NLRB, if _________ percent or more of the votes cast agree to unionization, the NLRB certifies the union as the workers' exclusive representative
50
bargaining unit
Group of employees a union wants to represent.
organization chart
a box and lines illustration showing the formal lines of authority and the organization's official positions or work specializations
decision
a choice made from among available alternatives
related diversification
a company is implementing this when they purchase a new business that is related to the company's existing business portfolio (EX: Disney purchased 21st century fox)
grievance
a complaint by an employee that management has violated the terms of the labor-management agreement (EX: working too much overtime)
use of modeling (3 key attributes among analytics competitors)
a data mining technique used to predict future behavior and anticipate the consequences of change (EX: capital one uses data mining to identify potential and most profitable customers)
disadvantages of group decision making
a few people dominate or intimidate, groupthink, satisficing, goal displacement
Vertical Integration
a firm expands into businesses that provide supplies it needs to make its products or that distribute and sell its products (EX: netflix follows this path by producing and distributing its own entertainment programming. Starbucks buys and roasts all of its coffee and then sells through starbucks stores)
organizational structure: who reports to whom and who does what
a formal system of task and reporting relationships that coordinates and motivates an organization's goals
VRIO analysis
a framework for analyzing a resource or capability to determine its competitive strategic potential by answering four questions about its value, imitability, rarity, and organization
the growth strategy (3 overall types of corporate strategy)
a grand strategy that involves expansion- as in sales revenue, market share, number of employees, or number of customers or (for non profits) clients served
the stability strategy (3 overall types of corporate strategy)
a grand strategy that involves little or no significant change (EX: without much changing in their product, the makers of Timex watches decided to stress the theme of authenticity "wear it well" over durability)
decision tree
a graph of decisions and their possible consequences; it is used to create a plan to reach a goal
trend analysis
a hypothetical extension of a past series of events into the future (EX: time-series forecast, which predicts future data based on patterns of historical data)
human resource inventory
a report listing your organizations employees by name, education, training, languages, and other important information. In looking outside, you need to consider the availability of talent in your industry's and geographical area's labor pool.
project post-mortems
a review of recent decisions in order to identify possible future improvements,
forecasting
a vision or projection of the future
valuable but not rare? you are
about equal competitively
2 type of workplace discrimination:
adverse impact and disparate treatment
preventing groupthink
allow criticism, allow other perspectives
Health Insurance Portability and Accountability Act (HIPAA) 1996
allows employees to switch health insurance plans when changing jobs and receive new coverage regardless of preexisting health conditions; prohibits group plans from dropping ill employees
goal displacement
although the primary task of the meeting may be to solve a particular problem, other considerations may rise to the fore, such as rivals trying to win an argument. THIS occurs when the primary goal is subsumed by a secondary goal
some uses of big data analytics:
analyzing consumer behavior and spurring sales, improving hiring and HR management, tracking movie, music, TV and reading data, advancing healthcare and medicine, aiding public policy
diagnosis
analyzing the underlying cause
advantages of external recruiting
applicants may have specialized knowledge and experience, applicants may have fresh viewpoints
background information
application forms and resumes provide a basic background info about job applicants, such as citizenship, education, work history and certifications.
functional-level strategy
applies to the key functional departments or units within the business units. The functional managers lead planning discussions at this level, and focus on the more tactical issues that support business-level strategies. (EX: McGraw Hill's decision to go into the textbook leasing business would require marketing managers to decide how to market the program, royalty managers to determine the formula for paying author royalties, and production managers to decide the best digital and print versions)
benefits
are additional nonmonetary forms of compensation designed to enrich the lives of all employees in the organization, which are paid all or in part by the organization. (EX: health insurance, dental insurance, etc)
employment tests
are legally considered to consist of any procedure used in the employment selection decision process, even application forms, interviews, and educational requirements. (EX:cognitive tests, personality tests, medical examinations, credit checks, and criminal background checks are among the common types)
explaining stage 1 of rational decision making (identify the problem of opportunity)
as a manager you'll probably find no shortage of problems, or difficulties that inhibit the achievement of goals, however you'll also find opportunities. whether you have one or the other, the decision you are called on to make is how to make improvements
the "curse of knowledge"
as our knowledge and expertise grow, we may be less and less able to see things from an outsiders' perspective- hence, we are often apt to make irrational decisions
3 areas of AI
assisted intelligence, augmented intelligence, autonomous intelligence
the staffing the organization might need
assume the organization will change. Thus, you need to understand the organizations vision and strategic plan so that proper people can be hired to meet the future strategies and work
the dialect method
attempting to identify a truth, called thesis, by exploring opposite positions, called antithesis.
the environment: Mechanistic Organization (the Burns and Stalker model)
authority is centralized, tasks and rules are clearly specified, and employees are closely supervised. Works best when an organization is operating in a stable environment.
the environment: Organic Organization (the Burns and Stalker model)
authority is decentralized, there are fewer rules and procedures, and networks of employees are encourage to cooperate and respond quickly to unexpected tasks. ("loose structure").
assisted intelligence
automated basic tasks (the most simple), making it faster and cheaper for humans to accomplish them
9 common decision-making biases: rules of thumb or "heuristics" that tend to bias how decision makers process information
availability, representativeness, confirmation, sunk cost, anchoring and adjustment, overconfidence, hindsight, framing, and escalation of commitment
don'ts of a consensus
avoid log rolling and horse trading (i'll support your project if you support mine"), avoid making an agreement simply to keep relations amicable and not rock the boat. Don't try to achieve consensus by putting questions to a vote
3 types of selection tools:
background information, interviews, and employment tests
To help eliminate bias, interviews can:
be designed, conducted, and evaluated by a committee of three or more people
satisficing
because most people would just as soon cut short a meeting, the tendency is to seek a decision that is "good enough" rather than to push on pursuit of other possible decisions. It can occur b/c the groups have limited time, lack the right kind of information, or are unable to handle large amounts of info
4 group-think problem solving techniques
brainstorming, devil's advocacy, the dialect method, post-mortems
a company focuses on high-net worth client. what type of strategic positioning is this?
broad needs, few customers
national movie theatre operator operates only in cities with populations fewer than 200,000 people. what type of strategic positioning is this?
broad needs, many customers
level 2 of strategies:
business
a company usually should operate by investing profits from one or more successful but slow-growing units, called ______________, into new products or services called __________ that have demonstrated strong potential in growing markets and should be appropriately funded
cash cows, stars
high market share, low market growth
cash cows- income finances stars and question marks
types of unionized and nonunionized workplaces: (4)
closed shop, union shop, agency shop and open shop
3 methods to understanding corporate-level strategies are:
common grand strategies, the Boston consulting group matrix, and diversification
2nd principle of strategic positioning: strategy requires trade-offs in competing
companies choose both a strategy to follow and what not to follow. EX: neutrogena soap is positioned more medicinal than cleansing. In achieving this narrow positioning the company gives up sales based on deodorizing: gives up large volume; and, manufacturing efficiencies
not valuable? you have a
competitive disadvantage
assumptions of the rational model:
complete information, no uncertainty (you should obtain complete, error free info about all alternative courses of action and the consequences that would follow), logical, unemotional analysis (having no prejudices or emotional blinds spots, you are able to logically evaluate the alternatives, ranking them from best to worst according to yours personal preferences), best decision for the organization
strategic human resource planning
consists of developing a systematic, comprehensive strategy for a) understanding current employee needs and b) predicting future employee needs
collective bargaining
consists of negotiations between management and employees about disputes over compensation, benefits, working conditions, and job security
sexual harassement
consists of unwanted sexual tension that creates an adverse work environment
level 1 of strategies:
corporate
SWOT , VRIO, forecasting and benchmarking are all among the tools for assessing the __________________
current reality
multiple applications, not just one (3 key attributes among analytics competitors)
davenport: "don't gain advantage from one killer app, but rather from multiple applications supporting many parts of the business" (EX: UPS tracks not only movement of packages, but examines usage patterns to try and identify potential customer defections so that salespeople can make contact and solve problems)
the escalation of commitment bias: feeling overly invested in a decision (9 common decision making biases)
decision makers increase their commitment to a project despite negative information about it
6 rules for brainstorming
defer judgement, build on the ideas of others, encourage wild ideas, go for quantity over quality, be visual, one conversation at a time
job specification
describes the minimum qualifications a person must have to perform the job successfully
the values statement (step 1 of strategic management process)
describes what the organization stands for, its core priorities, the values its employees embody, and what its products contribute to the world
the nonrational models are ___________ rather than prescriptive, describing how managers actually make decisions, not how they should.
descriptive
the BCG matrix
developed by the Boston Consulting Group, is a management strategy by which companies evaluate their strategic business units on the basis of 1) their business growth rates and 2) their share of the markets
minority dissent
dissent that occurs when a minority in a group publicly opposes the beliefs, attitudes, ideas, procedures, or policies assumed by the majority of the group
companies usually __________ to either grow revenue or reduce risk
diversify
low market share, low market growth
dogs- should be gotten rid of
drivers and flow of organizational culture
drivers of culture->organizational culture->organizational structure and internal processes->group and social processes->work attitudes and behaviors->overall performance
cost of living adjustment
during the period of the contract ties future wage increases to increases in the cost of living
givebacks
during tough economic times, the union agrees to give up previous wage or benefit gains in return for something else, usually job security or no-layoff policy
authorization card
each worker must sign this, before forming a union. when at least 30% have signed, the union may ask the employer for official recognition
parts of Business-level strategy
electronic components unit, services unit, retail unit
in general the most effective sources are ________________ for external recruiting
employee referrals
advantages of internal recruiting
employees tend to be inspired to greater effort and loyalty. Morale is enhanced because they realize that working hard and staying put can result in more opportunities, the whole process of advertising interviewing and so on is cheaper, there are fewer risks. Internal candidates are already known and familiar
patient protection and affordable care act
employers with 50+ employees must provide health insurance
National Labor Relations Board
enforces procedures whereby employees must vote to have a union and for collective bargaining
3 factors to be considered in designing an organization's structure
environment- mechanistic vs organic, environment- differentiation vs integration, link between strategy, culture, and structure
OUTSIDE organizational threats
environmental factors that hinder an organization's achieving a competitive advantage
OUTSIDE organizational opportunities
environmental factors that the organization may exploit for competitive advantage
the strategic human resource management process
establish the mission and vision, establish the grand strategy, formulate the strategic plans, plan human resources needed, recruit and select people, orient, train and develop, perform appraisals of people, purpose: get optimal work performance to help realize a company's mission and vision
Fair Labor Standards Act
established minimum living standards for workers engaged in interstate commerce, including provision of a federal minimum wage and a maximum workweek, along with banning products from child labor. Salaried executives, administrative, and professional employees are exempt from overtime rules
stage 3 of rational decision making
evaluate alternatives and select a solution- ethics, feasibility and effectiveness
jiffy lube provides only lubricants, but it provides them to all kinds of people with all kinds of motor vehicles. what type of strategic positioning is this?
few needs, many customers
strategic positioning emerges from 3 sources: (1st key principle of strategic positioning: creation of unique and valuable position)
few needs, many customers. broad needs, few customers. broad needs, many customers
SWOT analysis (a tool for assessing current reality)
first step into gaining insight on whether or not a company has competitive advantage. It is a situational analysis in which a company assesses its strengths, weaknesses, opportunities and threats
affirmative action
focuses on achieving equality of opportunity within an organization. it tries to make up for past discrimination in employment by actively finding, hiring, and developing the talents of people from groups traditionally discriminated against. Steps include active recruitment, elimination of prejudicial questions in interviews, and establishment of minority hiring goals.
business-level strategy
focuses on individual business units or products/service lines. Senior level managers BELOW C-suite are usually responsible. Issues involve: how much time to spend on marketing, new-product development, product expansion or contraction, facilities expansion or reduction, equipment, pricing, and employee development. (EX: the education business unit of McGraw-Hill, the publisher teamed up with a weekly textbook rental platform, to allow students to rent both digitally and print versions of textbook)
corporate level-strategy
focuses on the organization as a whole. Executives at most senior levels, generally referred to as the "C-suite" typically conduct this level. "what business are we in?" and "what products and services shall we offer?" (EX: amazon's acquisition of wholefoods)
once a firm analyzes their organizations strengths, weakness, opportunities and threats.. planners need to do ____________ for making a long-term strategy
forecasting
what drives an organizational culture?
founder's values, industry and business environment, national culture, organization's vision and strategies, behavior of leaders
level 3 of strategies:
functional
evaluation- what should you do if the action is not working? (4 possibilities) (stage 4 of rational decision making)
give it more time, change it slightly, try another alternative, start over
realistic job preview
gives a candidate a picture of both positive and negative features of the job and the organization before he or she is hired
privacy act 1974
gives employees legal rights to examine letter of reference concerning them
advantages of group decision making
greater pool of knowledge, different perspectives, intellectual simulation (brainstorming), better understanding of decision rationale (if you participate in making a decision, you are more apt to understand the reasoning behind the decision), deeper commitment to the decision
Labor-management conflict can be resolved through (3)
grievance procedures, mediation and arbitration
innovation strategy
growing market share or profits by innovating improvements in products or services
3 common grand strategies are:
growth, stability and defensive
compensation
has 3 parts 1) wages or salaries 2) incentives, and 3) benefits
is the resource or capability costly for other firms to imitate?
imitability
stage 4 of rational decision making
implement and evaluate the solution chosen
big data
includes not only data in corporate databases, but also web-browsing data trails, social network communications, sensor data and surveillance data
right-to-work laws
individual states are allowed to pass legislation outlawing union and agency shops. As a result, 28 states have done so, statutes that prohibit employees from being required to join a union as a condition of employment
often a growth strategy takes the form of an ______________
innovation strategy
automated experience
intuition based on feelings- the involuntary emotional response
holistic hunch
intuition that stems from expertise- a person's explicit knowledge about a person, situation an object or decision opportunity
structured interview, type 1: the situational interview
involves asking each applicant the same questions and comparing their responses to a standardized set of answers. the interviewer focuses on hypothetical situations, EX: "what would you do if you saw a fight in the workplace"
questions to ask for stage 3 of rational decision making
is it ethical? is it feasible? (if time is short, costs are high, technology is unavailable..) is it effective?
big data analytics
is the process of examining large amounts of data of a variety of types to uncover hidden patterns, unknown correlations, and other useful information
questions for ethical decision tree
is the proposed action legal? Does the proposed action maximize shareholder value? is the proposed action ethical? would it be ethical not to take the proposed action?
intuition has 2 benefits:
it can speed up decision making, useful when deadlines are tight and it helps managers when resources are limited
augmented intelligence
learns from human inputs in order to assist humans in making better decisions
unstructured interview
like an ordinary conversation, it involves asking probing questions to find out what the applicant is like. There is no fixed set of questions asked of all applicants and no systematic scoring procedure. As a result, it has been criticized as overly subjective and apt to be influenced by the bias of the interview. However, it has been found to provide more accurate assessments than the structured one
satisficing model (part of nonrational model)
managers seek alternatives until they find one that is satisfactory, not optimal.
ability tests
measure physical abilities, strength and stamina, mechanical ability, mental abilities and clerical abilities.
personality tests
measures such personality traits as emotional intelligence, social intelligence, resilience, personal adaptability, and need for achievement. Many of these represent competencies associated with career readiness
2 tier wage contracts
new employees are paid less or receive lesser benefits than veteran employees have
unrelated diversification
occurs when a company acquires another company in a completely unrelated business. this strategy reduces risk because losses in one business or industry can be offset by profits from other companies in the corporate portfolio
adverse impact
occurs when an organization uses an employment practice or procedure that results in unfavorable outcomes to a protected class over another group of people. (EX: basing a persons starting salary on what he or she earned at a previous job. This can discriminate against women, because they tend to make less money than men for the same skills)
workplace discrimination
occurs when employment decisions about people are made for reasons not related to the job, such as skin color, gender, religion. THOUGH, 1) even though the law prohibits discrimination in all aspects of employment, it does not require an employer to extend preferential treatment because of race, color, religion etc. 2)employment decisions must be made on the basis of job-related criteria
groupthink
occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation
the sunk cost bias: money already spent seems to justify continuing (9 common decision making biases)
occurs when managers add up all of the money already spent on a project and conclude it is too costly to simply abandon it.
consensus
occurs when members are able to express their opinions and reach agreement to support the final decision
The confirmation bias: seeking information to support your point of view (9 common decision making biases)
occurs when people seek information to support their point of view and discount data that do not support it.
ratification
once the union representative and management reach and agreement, the collective bargaining results are brought back to the members for this
system 1- intuitive and largely unconscious (system of decision making)
operates automatically and quickly; fast, automatic, intuitive, and largely unconscious mode.
contingency approach to organization design
organizations are more effective when they are structured to fit the demands of the situation, and when the structure is aligned with the strategies and internal actions of the organization
labor unions
organizations of employees formed to protect and advance their members' interests by bargaining with management over job-related issues
__________ are an organizations most important asset and it is important to invest in HR
people
civil rights act
permits suits against employers for punitive damages in cases of intentional discrimination
successful implementation- for implementation to be successful you need 2 things: (stage 4 of rational decision making)
plan carefully and be sensitive to those affected
time-series forecast
predicts future data based on patterns of historical data
strategy formulation (step 3 of strategic management process)
process of choosing among different strategies and altering them to best fit the organizations needs
civil rights act, Title VII
prohibits discrimination on basis of race, color, religion, national origin, sex, or sexual orientation
sarbanes-oxley act 2003
prohibits employers from demoting or firing employees who raise accusations of fraud to a federal agency
step 4 of the strategic management process (execute the strategy)
putting strategic plans into effect is strategy implementation. Strategic planning is not effective unless it can be translated into lower-level plans. This means that the top managers need to check on possible roadblocks within the organizations structure and culture and see if the right people and control systems are available to execute the plan
low market share, high market growth
question marks- risky new ventures.. some will become stars others will become dogs
2 types of sexual harassement
quid pro quo harassement and hostile environment
"is the resource or capability currently controlled by only a few firms or none?"
rarity
2 approaches managers may take to making decisions:
rational or nonrational
According to Harvard business review, advances in AI's decision-making capabilities will not ________ our reliance on human decision making, but rather _________ it
reduce, enhance
bullying
repeated mistreatment of one or more persons by one or more perpetrators; it is abusive physical, psychological, verbal or nonverbal behavior that is threatening, humiliating or intimidating
consolidated omnibus budget reconciliation act (COBRA)
requires an extension of health insurance benefits and termination
immigration reform and control act 1986
requires employers to verify the eligibility for employment of all their new hires (including US citizens)
disadvantages of internal recruiting
restrict the competition for positions and limits the pool of fresh talent and viewpoints, it may encourage some employees to assume that longevity and seniority will automatically result in promotion, whenever a job is filled it creates vacancy elsewhere
disparate treatment
results when employees from protected groups (such as disabled individuals) are intentionally treated differently
2 nonrational models are:
satisficing and intuition
because of so many constraints, managers do not make an exhaustive search for the best alternative. They follow what Simon calls, the __________________
satisficing model
symptoms of groupthink
sense of invulnerability (group members have the illusion that nothing can go wrong, breeding excessive optimism and risk taking.. also may ignore ethical implications), rationalization (protects the pet assumptions underlying the group's decisions from critical questions), illusion of unanimity and peer pressure (members silence= consent), "the wisdom of crowds" (members with different ideas may censor themselves)
employee retirement income security act (ERISA) 1974
sets rules for managing pension plans; provides federal insurance to cover bankrupt plans
grievance procedures are often handed initially by the union's ____________ who represents the unionized employees on a daily basis
shop steward
system 2- analytic and conscious
slow, deliberate, analytical and consciously effortful mode of reasoning
high market share, high market growth
stars- definite keepers
the vision statement (step 1 of strategic management process)
states what the organization wants to become, where it wants to go strategically
step 5 of strategic management process (the feedback loop)
strategic control consists of monitoring the execution strategy and making adjustments. To keep the strategic plans on track, managers need control systems to monitor progress and take corrective action (early and rapidly).
___________ means "performing different activities from rivals, or performing similar activities in different ways"
strategic positioning
heuristics
strategies that simplify the process of making decisions (rule of thumb)
3 key principles underlying strategic positioning:
strategy is the creation of a unique and valuable position, strategy requires trade-offs in competing, strategy involves creating a "fit" among activities
wage rates
subject to negotiation include overtime pay, different wages for different shifts, and bonuses.
job description
summarizes what the holder of the job does and how and why he or she does it
2 systems of decision making
system 1- intuitive and largely unconscious, system 2- analytical and conscious
valuable, rare but not costly to imitate? you have
temporary competitive advantage
bounded rationality (part of nonrational model)
the concept suggests that the ability of decision makers to be rational is limited by numerous constraints. Such as, complexity, time and money, and their cognitive capacity, values, skills, habits and unconscious reflexes
reliability
the degree to which a test measures the same thing consistently
the horizontal specialization: who specializes in what work (in organizational chart)
the different jobs or work specialization. (the husband-and-wife partners in a 2 person firm might agree one is the "outside person" handling sales, clients, and finances and the other is the "inside person", handling production and research)
INSIDE organizational weaknesses
the drawbacks that hinder an organization in executing strategies in pursuit of its vision
human capital
the economic or productive potential of employee knowledge, experience and actions
3 overall types of corporate strategy:
the growth strategy, the stability strategy and the defensive strategy
structured interview, type 2: Behavioral-Description interview
the interviewer explored what applicants have actually done in the past. EX: "what was the best idea you ever sold to a supervisor?"
The mission statement (step 1 of strategic management process)
the organization's purpose or reason for being
(more typical) hostile environment
the person being sexually harassed doesn't risk economic harm but experiences an offensive or intimidating work environment. (EX: unwelcoming touching, sexually oriented jokes)
quid pro quo harassement
the person to whom the unwanted sexual attention is directed is put in the position of jeopardizing being hired from a job or obtaining job benefits unless he or she implicitly or explicitly acquiesces (EX: a supervisor requesting sexual favors as a condition for hiring) (EX 2: a manager threatening to terminate if sexual favors are not given)
mediation
the process in which a neutral third party, a mediator, listens to both sides in a dispute, makes suggestions and encourages them to agree on a situation (can be retired judges or specialists in the field)
arbitration
the process in which a neutral third party, an arbitrator, listens to both parties in dispute and makes a decision that the parties have agreed will be binding on them
recruiting
the process of locating and attracting qualified applicants for jobs open in the organization
why ethical violations are more likely than ever before (5 reasons):
the public is "less forgiving" of poor behavior by executives, regulations are more stringent, companies are expanding operations into developing countries where ethical risk may be higher and laws less protective, digital communications increase exposure to risk from both hackers and whistle-blowers, the 24/7 news cycle and proliferation of the media amplifies negative info in real time
job analysis
the purpose is to determine, by observation and analysis, the basic elements of a job. (UPS has this, where a specialist rides with the driver and time how long it takes to deliver a load of packages and not what problems are encountered- traffic jams, dogs, not home)
disadvantages of external recruiting
the recruitment process is more expensive and takes longer, the risks are higher because the persons hired are less well known
"one of the most extraordinary features of big data is that it signals the end of _____________"
the reign of statistics
selection process
the screening of job applicants to hire the best candidate. Essentially, this becomes an exercise in prediction: How well will the candidate perform the job and how long will he or she stay?
INSIDE organizational strengths
the skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its vision
diversification
the strategy of moving into new lines of business, such as amazon purchasing whole foods
the framing bias: shaping the way a problem is presented (9 common decision making biases)
the tendency of decision makers to be influenced by the way a situation or problem is presented to them (EX: 85% lean meat instead of 15% fat)
The Environment: Differentiation (Lawrence and Lorsch model)
the tendency of parts of an organization to disperse and fragment. The more subunits into which an organization breaks down, the more highly differentiated it is. (when force pushes the organization apart)
the hindsight bias: the I-knew-it-all-along effect (9 common decision making biases)
the tendency of people to view events as more predictable than they really are
The Environment: Integration (Lawrence and Lorsch model)
the tendency of the parts of an organization to draw together to achieve a common purpose, the specialists work together to achieve a common goal. The means for achieving this are a formal chain of command, standardization of rules and procedures, and use of cross-functional teams and computer networks so that there is frequent communication and coordination of the parts (when forces pull the organization together)
the representativeness: faulty generalizing from a small sample or single event (9 common decision making biases)
the tendency to generalize from a small sample or single event. Bias= just because something happens once, does not mean it is representative (EX: people hear about millionaires from the lottery, so they buy a ticket)
The anchoring and adjustment bias being influenced by an initial figure (9 common decision making biases)
the tendency to make decisions based on an initial figure. Bias= the initial figure may be irrelevant to market realities. (EX: managers often give employees a standard percentage raise in salary, basing the decision on whatever the workers made the preceding year. Even if it is completely out of alignment with what other companies are paying for the same skills)
validity
the test measures what it purports to measure and is free of bias
evidence-based decision making
the translation of principles based on best evidence into organizational practice, bringing rationality to the decision-making process
the availability bias: using only the information available (9 common decision making biases)
the use of information readily available from the memory to make judgements. Bias= readily available information may not present a complete picture of a situation (may not present a complete picture of a situation)
2 kinds of information that organization charts reveal about organizational structure are:
the vertical hierarchy of authority (who reports to whom) and the horizontal specialization (who specializes in what work)
what makes it hard to be evidence based:
theres too much evidence, theres not enough good evidence, the evidence does not apply, people are trying to mislead you, you are trying to mislead yourself, the side effects outweigh the cure, stories are more persuasive anyways
characteristics of group decision making: (4)
they are less efficient, their size affects decision quality, they may be too confident, knowledge counts (decision-making accuracy is higher when group members know a good deal about the relevant issues)
stage 2 of rational decision making
think up alternative solutions (both the obvious and the creative)
step 3 of the strategic management process:
translate the broad mission and vision statement into a corporate strategy, which after the current reality, explains how the organization's mission is to be accomplished.
7 implementation principles
treat your org as an unfinished prototype, no brags just facts, see yourself and your org as outsiders do, evidence based mgt is not just for senior executives, like everything else you still need to sell it, if all else fails slow the spread of bad practice, the best diagnostic q: what happens when people fail?
valuable, rare, costly to imitate but not organized to exploit value, rarity, imitability? you have
unexploited competitive advantage
the most commonly used employee selection technique- interviewing, takes 3 forms:
unstructured interviews, and 2 types of structured interviews
do's of a consensus
use active listening skills, involve as many members as possible, seek out the reasons behind arguments, dig for the facts
3 key attributes among analytics competitors:
use of modeling, multiple applications, and support from top management
"does the resource or capability allow your firm to exploit an opportunity or neutralize a threat?"
value
organizations can also purchase a diversification strategy through ________________ integration
vertical
when a group can help in decision making: (3)
when it can increase quality, when it can increase acceptance, when it can increase development