Introduction to Management Midterm Study Guide
Introduction to Management Midterm Study Guide MGT 111
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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) ● Legal/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 Performance 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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