Principles of Management Exam 2 (Chapter 5-8)
Credibility
"How believable is the information about the situation?"
Urgency
"How quickly must I act on the information about the situation?"
Importance
"how high priority is this situation?"
Porter's Five Competitive Forces
1. Threats of new entrants 2. Bargaining power of suppliers 3. Bargaining power of buyers 4. Threat of substitute products or services 5. Rivalry among competitors
Key attributes among analytics competitors
1. Use of modeling: going beyond simple descriptive statistics 2. Having multiple applications, not just one 3. Support from the top
The strategic-management process
1. establish the mission and vision 2. assess the current reality 3. formulate the grand strategy 4. implement the strategy 5. maintain strategic control
The company's CEO puts pressure on the firm's R&D managers to develop products that can be created cheaply. The firm would be following a ______ strategy:
A. Cost-leadership B. Differentiation C. Cost Focus D. Retrenchment
The United Way, a charitable Organization, is considered a _________ Organization.
A. For-profit B. Nonprofit C. Mutual-benefit D. May be any one of the above Answer:
XYZ Hospital has a Chief of Medical Services, a Director of Administrative Services, and a Director of Outpatient Services. XYZ has a _______ structure.
A. Functional B. Simple C. Divisional D. Matrix Answer:
Bill has been a manager for 14 years. He has seen many different situations with his employees. He often makes decisions without really thinking about them. This is called ________.
A. Intuition B. Satisficing C. Bounded Rationality D. Unbounded Rationality Answer:
John owns a piano sales and tuning store. He wants to be the biggest retailer in the Midlands. Adding salespeople would be part of his strategic ______.
A. Locution B. Execution C. Efficacy D. Efficiency Answer:
When analyzing the "W" in SWOT analysis, Roberta, the manager might be assessing:
A. Possible challenges in the market B. Competitors' actions C. High turnover of employees D. Good financial resources of the firm Answer:
In the Mary Kay Cosmetics Co., the best salespeople receive pink Cadillacs in special award ceremonies. This is an example of a :
A. Symbol B. Value C. Rite or Ritual D. Both A and C Answer:
Norma is trying to decide on a new contract for copier services. One of the salesman has an excellent bid, but Norma feels that there are things he is not telling her. Why does this make it had for her to use evidence-based decision making?
A. There's too much evidence B. There's not enough good evidence C. People are truing to mislead you D. The evidence doesn't quite apply Answer:
Rites and Rituals
Activities and ceremonies, planned and unplanned, that celebrate important occasions, and accomplishments in the organization's goals
Management Efficiencies
Administration spread over several business.
Symbol
An object, act, quality, or event that conveys meaning to others
Matrix Structure
An organization combines functional and divisional chains of command in a grid so that there are two command structures-vertical and horizontal.
Hierarchy Culture
Apt to have a formalized structured work environment aimed at achieving effectiveness through a variety of control mechanisms.
Division of Labor
Arrangement of having discrete parts of a task done by different people
Non rational models of decision making
Assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimal decision.
Strategic positioning
Attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. Performing different activities from rivals or performing similar activities in different ways.
Adhocracy Culture
Attempts to create innovative products by being adaptable, creative, and quick to respond to changes in the marketplace.
Internal strengths
Attention to detail and a frugality the shuns waste of every kind.
Ample structure
Authority is centralized in a single person with few rules and low work specialization
Reduced Risk
Because more than one product
Chapter 6
Chapter 6
Chapter 7
Chapter 7
Chapter 8
Chapter 8
Decision
Choice made from among available alternatives
Organizational weaknesses
Drawbacks that hinder an organization in executing strategies in pursuit of its mission.
Trend Analysis
Hypothetical but equally likely future conditions. Also called scenario planning and scenario analysis.
Centralized authority
Important decisions are made by higher-level managers
Decentralized Authority
Important decisions are made by middle-level and superior-level managers
Big Data
Includes not only data in corporate databases but also web-browsing data trails, social network communications, sensor data, and surveillance data
Clan Culture
Internal focus values flexibility rather than stability encourages collaboration among employees
Growth Strategy
Involves expansion - as in sales revenues, market share, number of employees, or number of customers
Stability
Involves little or no significant change
Defensive
Involves reduction in the organization's efforts retrenchment
Cost-Focus Strategy
Keep costs of a product below those of competitors and to target a narrow market.
Cost-leadership strategy
Keep the costs, and hence the prices, of a product or service below those of competitors and to target a wide market.
Intuition
Making a choice without the use of conscious though or logical inference. Sources are expertise and feelings
Accountability
Managers must report and justify work results to the managers above them.
Satisfying Model
Managers seek alternatives until they find one that is satisfactory, not optimal.
Competitive Intelligence
Means gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately. public prints and advertising, investor information, informal sources
Responsibility
Obligation you have to perform the tasks assigned to you.
Groupthink
Occurs when group members strive to agree for the sake of unanimity and this avoid accurately assessing the decision situation.
Consensus
Occurs when member are bale to express their opinions and reach agreement to support their final decision.
Focused-differentiation
Offer products that are of unique and superior value compared to those of competitors and to target a narrow market.
Differentiation Strategy
Offer products that are unique and superior value compared to those of competitors but to target a wide market.
Diversification
Operating several business in order to spread the risk related, unrelated
Virtual Organization
Organization whose members are geographically apart, usually working with e-mail, collaborative computing, and other computer connections.
Current Reality Assessment
Organizational assessment to look 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.
Internal weakness
Parts were supplied by outside companies rather than trusted traditional suppliers
Directive
People are efficient, logical, practical, and systematic in their approach to solving problems Action oriented, decisive, and like to focus on facts
Divisional Structure
People with diverse occupational specialties are put together in formal groups by similar products, customers or geographic regions.
Functional Structure
People with similar occupational specialties are put together in formal groups.
Hero
Person whose accomplishments embody the values of the organization
Level 1: Observable artifacts
Physical manifestations such as manner of dress, awards, myths and stories about the company visible behavior exhibited by managers and employees
Delegation
Process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy.
Strategy Formulation
Process of choosing among different strategies and altering them to best fit the organization's needs.
Decision Making
Process of identifying and choosing alternative courses of action
Strategy implementation
Putting strategies into effect.
Span of Control
Refers to the number of people reporting directly to a given manger narrow, wide
Person-Organization Fit
Reflects the extent to which your personality and values match the climate and culture in an organization.
Enacted values
Represent tha values and norms actually exhibited in the organization.
Level 3: Basic Assumptions
Represent the core values of the organization's culture Those taken for granted and highly resistant to change
Authority
Rights inherent in a managerial position to make decisions and utilize resources.
Organizational strengths
Skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission.
Ethics Officer
Someone trained about matters of ethics in the workplace, particularly about resolving ethical dilemmas
Analytics
Sophisticated forms of business data analysis portfolio analysis, time-series forecast Also called business analytics
Rational Decision Making
Stage 1 - Identify the problem or opportunity Stage 2 - Think up alternative solutions Stage 3 - Evaluate alternatives & select a solution Stage 4 - Implement & evaluate the solution chosen
External opportunities
Stressed commitment to customers Still ranks high in quality
Bounded Rationality
Suggest that the ability of decision makers to be rational is limited by numerous constraints. complexit, time and money, cognitive capacity
Behavioral
Supportive, receptive to suggestions, show warmth prefer verbal to written information
Conceptual
Takes a broad perspective to problem solving likes to consider many options and future possibilities
Horizontal Design
Teams or workgroups, either temporary or permanent, are used to improve collaboration and work on shared tasks by breaking down internal boundaries.
Brainstorming
Technique used to help groups generate multiple ideas and alternatives for solving problems.
Differentiation
Tendency of the parts of an organization to disperse and fragment.
Integration
Tendency of the parts of an organization to draw together to achieve a common purpose.
Coordinated effort
The coordination of individual effort into group wide effort
Synergy
The economic value of separate, related business under one ownership and management is greater together than the business are worth separately.
Hallow Structure
The organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster.
Big Data Analytics
The process of examining large amounts of data of a variety of types to uncover hidden patterns, unknown correlations, and the useful information
Organizational Culture
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. Also called corporate culture
Common purpose
Unifies employees or members and gives everyone an understanding of the Organization's reason for being
Mutual-benefit Organization
Voluntary collectives whose purpose is to advance member's interests
Grand Strategy
Which after the assessment of the current reality, explains how the organization's mission is to be accomplished. Three common grand strategies are growth, stability, and defensive.
Story
narrative based on true events, which is repeated - and sometimes embellished upon - to emphasize a particular value
Decision-making style
reflects the combination of how an individual perceives and responds to information value orientation Tolerance for ambiguity
Building a foundation of Execution
-Know your people and your business -insist on realism -set clear goals and priorities -follow through -Reward the doers -expand the capabilities -know yourself
Disadvantages of Group Decision Making
-a few people dominate or intimidate -groupthink -satisficing -goal displacement
Advantages of Group Decision Making
-greater pool of knowledge -different perspectives -intellectual stimulation -better understanding of decision rationale -deeper commitment to the decision
Knowledge of your decision-making style:
-helps you understand yourself -can increase your ability to influence others -gives you an awareness of how people can take the same information and yet arrive at different decisions
What managers need to know about groups and decision making
-they are less efficient -their size affects decision quality -they may be too confident -knowledge counts
Common Decision-Making Biases
1. Availability 2. Representativeness 3. Confirmation 4. Sunk Cost 5. Anchoring an adjustment 6. Escalation of commitment 7. Hindsight 8. Framing 9. Escalation of Commitment
Three levels of Organizational Culture
1. Observable artifacts 2. Espoused Values 3. Basic Assumptions
The 3 key principles of strategic positioning.
1. Strategy is the creation of a unique & valuable position 2. Strategy requires trade-offs in competing 3. Strategy involves creating a "fit" among activities
Decision support system
A computer-based information system that provides a flexible tool for analysis and helps managers focus on the future business intelligence
Organizational Structure
A formal system of task and reporting relationships that coordinates and motivates an organization's members so that they can work together to achieve the organization's goals.
Decision Tree
A graph of decisions and their possible consequences Used to create a plan to reach a goal
BCG Matrix
A means of evaluating strategic business units on the basis of (1) Their business growth rates and (2) Their share of the market.
Benchmarking
A process by which a company compares its performance with that of high-performing organizations.
Organization
A system of consciously coordinated activities or forces of two or more people for profit, nonprofit, mutual-benefit
Bill is supportive of his employees and prefers to have viral conversations rather that written memos. His style is:
A. Analytical B. Behavioral C. Conceptual D. Directive Answer:
Organization chart
Box-and-lines illustration showing the formal lines of authority and the organization's official positions or work specializations
Environmental Scanning
Careful monitoring of an organization's internal and external environments to detect early signs of opportunities and threats that may influence the firm's plans.
Single-product strategy
Company makes and sells only one product within its market Benefit-focus Risk-vulnerability
Virtual Structure
Company outside a company that is created "specifically to respond to an exceptional market opportunity that is often temporary"
Strategy
Consider how success will be accomplished
Operations
Consider what path will be followed
people
Consider who will benefit you in the future
Analytical
Considers more information and alternatives
Strategic control
Consists of monitoring the execution of strategy and making adjustments if necessary.
Execution
Consists of using questioning, analysis, and follow-through in order to mesh strategy with reality, align people with goals, and achieve results promised. Central part of any company's strategy.
Hierarchy of Authority
Control mechanism for making sure the right people do the right things at the right time unity of command
Organizational Threats
Environmental factors that hinder an organization's achieving a competitive.
Organizational Opportunities
Environmental factors that the organization may exploit for competitive advantage.
Level 2: Espoused Values
Espoused values and enacted values
Rational Model of Decision Making
Explains how managers should make decisions Assumes managers will make logical decision that will be optimum in furthering the organization's best interests. Also called the classical model
Espoused Values
Explicitly states values and norms preferred by an organization
Modular Structure
Firm assembles product chunks, or modules, provided by outside contractors.
Market Culture
Focused on the external environment driven by competition and a strong desire to deliver results
For-profit Organization
Formed to make money, or profits, by offering products or services
Nonprofit Organization
Formed to offer services to some clients, not to make a profit