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Introduction to Management Midterm Study Guide

by: Mollie Baruch

Introduction to Management Midterm Study Guide MGT 111

Marketplace > Rutgers University > Business, management > MGT 111 > Introduction to Management Midterm Study Guide
Mollie Baruch
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About this Document

These notes are on all of the sessions (sessions 1-11) covered in class up till the midterm. It covers the concepts of the definitions applied to each session. I made a quizlet for all of the terms...
Introduction to Management
Denis Hamilton
Study Guide
Management, Introduction
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This 14 page Study Guide was uploaded by Mollie Baruch on Tuesday January 19, 2016. The Study Guide belongs to MGT 111 at Rutgers University taught by Denis Hamilton in Spring 2016. Since its upload, it has received 67 views. For similar materials see Introduction to Management in Business, management at Rutgers University.

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Date Created: 01/19/16
  page 1  Mollie Baruch  Topic 1 ‐ Introduction to Management ​ (Session 1‐2)  Three Stages of Management Theory Evolution  1. Age of Scientific Management (1880‐1940): PRODUCTION  a. Frederick Taylor​  ‐ Principles of Scientific Management, 1911  2. Human Relations or Behavioral Movement (1940‐1980)  a. Mary Parker Follett​  (1924) ‐ Power with rather than power over employees  b. Hawthorne Studies (1924‐1932) ‐ ​ Elton Mayo​  ‐ not about physical conditions  i. result/factors: group dynamics + workers had been ​ engaged​  by management in  soliciting their feedback and input  c. Peter Drucker​  ‐ corporation as a social institution in which the capacity and potential of  everyone involved were to be respected  d. Douglas McGregor   i. Theory X = people are inherently lazy (Frederick Taylor view)  ii. Theory Y = people want to find meaning in their work and will continue in positive ways  if the work is well designed  3. Strategic Management (1980‐Present)  a. Bruce Henderson​  (1963) ‐ proposed analytical approach for developing business strategy  b. Drucker​  (1964) ‐ results driven management​ , businesses exist to produce results  c. John Kenneth Galbraith​  (1967) ‐ raises concern that top 200 U.S. firms controlled 67% of assets,  and 60% of sales, employment, and income  i. went from fragmented economy in 1800’s → massive organizations  d. Michael Porter​  (Strategy Guru)  i. (1980) Competitive Strategy: the 5 forces, generic strategies  ii. (1985) Competitive Advantage: value chain  e. Jensen ​(1980) ‐ Agency Theory  i. deals with how boards hand off authority to executive committees to a CEO and that  gets cascaded down  f. Peters & Waterman​  (1982) ‐ “In Search of Excellence”  i. identified what best companies were doing, but failed to look at band ones  g. Michael Hammer​  (1990) ‐ Reengineering  i. starting with a clean sheet of paper, look at your business and forget about what you’re  doing now, and focus on what SHOULD you be doing    Topic 2 ‐ Strategic Management​  (Sessions 3‐7)  What is Strategy? (Session 3)       Building Competitive Advantage  1. Low‐cost provider​  (efficiency)  a. achieve lowest cost in industry for producing goods and services  2. Differentiation on features ​ (effectiveness)  a. differentiate on products others cannot  3. Focus on market niche​  (efficiency and/or effectiveness)  a. choose to pick some subsite in market and better serve that segment  4. Best‐cost provider   a. take a few of the more luxury attributes of a product and being able to offer that bundle  more cost effectively than someone trying to differentiate    page 2    ○ Deliberate:  you have strategy and ways you want to compete  ○ Emergent​ : as you’re working in the marketplace/ as you try out your strategies, you recognize  the need to modify, alter, or abandon those     ​hree Tests of a Winning Strategy  1. The Strategic Fit Test: dynamic fit with firm’s external and internal situation  a. external = taking advantage of an opportunity in market that offers potential to earn  above average profits  b. internal = you have capabilities to execute strategy  2. The Performance Test: ​ can it produce good performance?  a. profitability  b. market standing  c. competitive strengths  3. The Competitive Advantage Test​ : helps firm attain a significant and sustainable competitive  advantage  a. able to create a value proposition that can defend    The Strategy Process (Session 4)       The 5 Stages of the Strategy Process  1. Vision, Mission, & Values  2. Setting Objectives  3. Crafting Strategy to Achieve Objectives  a. Elements of a Firm’s Strategic Plan  i. it’s strategic vision, business mission, and core values  ii. its strategic and financial objectives  iii. its chosen strategy  4. Executing the Strategy  5. Monitoring and Adjusting  a. Evaluating Performance (3 tests of winning strategy)  i. good fit    page 3  ii. competitive advantage  iii. strong performance    External Analysis (Session 5)    PESTEL Analysis: focuses on principal components of strategic significance in             macro‐environment  ● Po ​litical factors  ● Ec ​onomic condition (local to worldwide)  ● So ​ciocultural forces  ● T​ echnological factors  ● E​ nvironmental factor(natural environment)  ● L​egal/regulatory conditions         The Five Competitive Forces (Porter):  ● competition from rival sellers  ● competition from potential new entrants  ● competition from producers of substitute products  ● supplier bargaining power  ● customer bargaining power    page 4    ○ when forces are strong→ downward pressure on prices; profitability is lower  ○ when forces are weak→ price pressures are less; profitability is high        A Framework for Competitor Analysis    Internal Analysis (Session 6)     Evaluating a Firm’s Internal Situation → Internal Analysis  1. How well is the firm’s ​ present strategy working? ​  a. the firm is achieving its stated financial and strategic objectives  b. the firm is an above‐average industry performer  2. What are the firm’s competitively important ​ resources and capabilities​?  a. competitive assets    page 5  b. resource  c. capability or competence  d. VRIN Testing  3. Is the firm able to take advantage of market ​ opportunities​ and overcome ​ external threats​ to its  external well‐being?  a. SWOT analysis  b. Characteristics of Market Opportunities  i. an absolute “​must pursue” ​ market  1. represents much potential but is hidden in “fog of the future”  ii. a marginally interesting ​market  1. presents high risk and questionable profit potential  iii. an unsuitable/mismatched ​ market  1. is best avoided as the firm’s strengths are not matched to market factors  c. Types of threats:  i. normal course‐of business threats  ii. sudden‐death (survival) threats ‐ moves by competitors or disruptive events in industry  that can leads to firm’s demise (immediate action)  4. Are the firm’s ​price and costs competitive​ with those of key rivals, and does it have an appealing  customer value proposition? ​       Differentiation Strategy        page 6       Low‐Cost Strategy      5. Is the firm ​competitively stronger or weaker​  than key rivals?  6. What strategic ​ issues and problems​  merit front‐burner managerial attention?    Crafting & Implementing Strategy (Session 7)       The Five Generic Competitive Strategies  Low‐Cost  Striving to achieve lower overall costs​  than rivals on products that attract  Provider  a broad spectrum of buyers  Broad  Differentiating the firm’s product​  offering from rivals’ with attributes that  Differentiation  appeal to a broad spectrum of buyers  Focused  Concentrating on a narrow ​ price‐sensitive buyer segment​  and on costs to  Low‐Cost  offer a lower‐priced product (ex: location/students)  Focused  Concentrating on a narrow buyer segment by ​ meeting specific tastes​  and  Differentiation  requirements of niche members (ex: prefer particular color)  Best‐Cost  Giving customers more value for the money by offering ​ upscale product  Provider  attributes at a lower cost than rivals​  (ex: Lexus features cheaper things  than German competitors)        page 7  LOW‐COST PROVIDER       The Keys to Driving Down Company Costs    BROAD DIFFERENTIATION​ : offering customers something that rivals cannot  1.  Incorporate product attributes and user features thlower the buyer’s overall cost of using the firm’s  product. (ex: designing expensive product that reduce cost of manufacturing customer’s product)  Incorporate tangible feature (eg: styling) that increase customer satisfaction with the product. (ex:  2.  offering feature on TV that improves sound quality)  Incorporate intangible feature (eg: buying image) that enhance buyer satisfaction in noneconomic ways.  3.  (ex: Porsche ‐ the identity people gain at owning one)  Signal the valu of the firm’s product (eg: price, packaging, placement, advertising) offering to buyers. (ex:  4.  Tiffany’s blue box or VS bag)         Uniqueness Drivers: The Keys to Creating a Differentiation Advantage       page 8         When a Differentiation Strategy Works Best      FOCUSED LOW‐COST AND FOCUSED DIFFERENTIATION          BEST‐COST PROVIDER                  THE BIG RISK OF A BEST‐COST PROVIDER STRATEGY ‐ GETTING SQUEEZED ON BOTH SIDES!    page 9      Topic 3 ‐ Managing a Positive & Productive Work Environment​  (Session 8‐11)  5 key steps for Designing and Managing a Positive and Productive Work Environment:  (1.) Create Productive and Meaningful Jobs (Session 8)        (2.) Group Jobs and Create Organizational Structure (Session 9)       Key Considerations in Designing Structures:  1. Critical ​low of info/knowledge​  are enabled/supported  2. Key individuals (groups) are able to ​ effectively interact routinely and spontaneously​  with each other  to create value  3. There is ​clarity of responsibility and authority  4. Each individual’s ​role is clear in the context of the overall organization’s vision, mission, and goals  5. Meaningful connection to organization       Grouping Jobs: Structural Models  ● Functional Structure​ : organizational structure composed of all the departments that an organization  requires to produce its goods or services  ○ goal: to improve skills through proximity to other individuals with similar skills/roles and to  leverage common resources (managers, equipment, suppliers, etc.)    page 10    ● Divisional Structure ‐ Product Market & Geographical Structures​ : an organizational structure composed  of separate business units within which are the functions that work together to produce a specific  product for a specific customer   ○ goal: to create smaller, more manageable business units within the organization that provide all  the necessary resources under the direction of one organization to support optimizing  performance of products, or markets, or regions    ● Matrix Structures​ : an organizational structure that simultaneously groups people and resources by  function and by product (2 responsibilities)  ○ goal: when customer needs or technology is changing rapidly this structure provides more  flexibility to respond quickly    page 11    ● Product Team Structures​ : organizational structure in which employees are permanently assigned to a  cross‐functional team and report only to the product team (full time job ‐ to support ONE product  team)  ○ goal: to avoid the two‐boss issues of the matrix structure while preserving the  flexibility/adaptability the matrix structure provides    ● The Hypertext Organization​ : theoretical, informal structure in which employees are initiating  self‐directed interactions with each other, and with the formal structures of the Organization, and with  the organization’s info. systems in order to access critical info., knowledge, skills, and capabilities  essential to their work  ○ goal: to not be encumbered in getting work done by formal organizational structures; to speed  up information flows and decisions    page 12         Factors Affecting Organizational Structures     Strategy​: differentiation → adaptive  Technology:  more complexity → adaptive  Org. environment​ : more uncertaining → adaptive  Human​  resources:​ higher skilled workers → adaptive                            Problems with Too Many Organizational Levels  ● Communication problems  ● Distortion of messages (accidental or deliberate)  ● Too many managers (=expensive)  GOAL: MINIMUM CHAIN OF COMMAND                    page 13  (3.) Integrate/Coordinate Work Flows (Session 10)         Culture: establish and reinforce social rules  1. Take ​ responsibility for the whole task ​ (not just your part)  2. Value knowledge, and make what you know accessible to others (​ share expertise​ )  3. Explore potential by ​ experimenting​ , looking for alternatives and options (don’t just reach for a quick  solution to eliminate the problem)    (4.) Motivate/Monitor Performance (Session 10)     A good performance evaluation and reward system energizes maximum employee        performance ‐   ● Key Elements:  ○ Define performance​ : establish clear goals tied to strategy; turn the mission, values, and  strategy into actionable goals  ■ develop goals  ■ create milestones for key steps  ■ assign accountability for goals and milestones  ○ Measure performance​ : create metrics to track progress towards goals; conduct performance  evaluations of progress  ■ create measures of performance vs. goals  ■ conduct performance evaluation using measures  ○ Reward performance​ : establish a system that recognizes and rewards results in achieving goals  using: monetary rewards, non‐monetary rewards, and punishment (when necessary)       Striking the Right Balance Between Rewards and Punishment        page 14  (5.) Engage Employees (Session 11)     nner Work Life (Amabile & Kramer)  ● Emotions  ● Perceptions  →  ​ETTER WORK PERFORMANCE   ● Motivations  (High Performance Drivers: creativity, productivity, commitment, collegiality)  Two key actions managers can take to improve the Inner Work Life experiences of their employees:  1. Enables employees to move forward in their work  2. Treat them decently as human beings     Employee Engagement    Blessing White X Chart of Engagement    JOB = GIVE + TAKE  Recommended Manager Actions with Employees:  ‐ educate them  ‐ Provide tools  ‐ Redefine career success  ‐ Provide development and growth opportunities                     Management Actions to Engage Employees Organization Level  1. Develop a worthwhile ​mission​ supported by clear, sensiblstrategies  2. Create a ​ ell‐designed organization with meaningful jobs  a. meaningful work  b. properly resourced  c. clear link to mission  d. autonomy  3. Implement an effective P​erformance Management System  4. Establish strong, positivvalues and culture  a. ethical practices  b. values diversity  c. committed to CSR  5. Implement proactive ​HR practices and policies  a. employee dev.  b. advancement  c. recognition  d. rewards  e. leadership dev.  6. Hire, train, and developemotionally intelligent supervisors  a. share info.  b. listen to employees  c. treat as individuals  d. empower employees  OUTCOME: ​ ENGAGED EMPLOYEES​  → POSITIVE MINDSET + POSITIVE BEHAVIOR 


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