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MGMT Exam 2 Study Guide

by: Kiera Howard

MGMT Exam 2 Study Guide MGMT 3202

Marketplace > East Carolina University > Business > MGMT 3202 > MGMT Exam 2 Study Guide
Kiera Howard
GPA 3.95

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Chapters 3-5
Fundamentals of Management
Tiffany Woodward
Study Guide
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This 7 page Study Guide was uploaded by Kiera Howard on Friday February 19, 2016. The Study Guide belongs to MGMT 3202 at East Carolina University taught by Tiffany Woodward in Spring 2016. Since its upload, it has received 89 views. For similar materials see Fundamentals of Management in Business at East Carolina University.


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Date Created: 02/19/16
THIS STUDY GUIDE WILL BE UPDATED AFTER THE REVIEW SESSION! Chapter 3 Ethical Dilemma • Dilemma people find themselves in when they have to decide if they should act in a way that might help another person even though doing so much go against their own self- interest Ethics & The Law • Legal, but unethical: CEO of WorldCom, Bernie Ebbers, appoints close personal friends to the Board of Directors • Illegal, but seeming ethical: doctors in a small town agree to set their prices at a below- average level to reduce patient cost • Neither ethics nor the law are fixed principles Stakeholders • The people and groups that supply the company with its productive resources and so have a claim on and stake in the company Utilitarian Rule • A manager of an organization with high labor costs must decide whether or not to restructure the company (downsize) • Restructuring hurts employees and managers that lost their jobs, improves efficiency, and increases profitability o It benefits stockholders due to dividends and stock prices o It benefits customers due to lower purchasing prices o Benefits the remaining staff as the companies competitive position will improve • Not restructuring will benefit employees and managers that keep their jobs but there will be no increase in efficiency and profitability o Hurts stockholders due to lower dividends and stock prices o Hurts customers due to higher product prices o Hurts the staff as the companies competitive position declines o The organization may fail • After looking into both options, restructuring benefits the most people and is the better choice Moral Rights Rule • Freedom, life/safety, property, privacy, free speech, etc. are all things effected by this rule • An example would be a manager discovers that a product is potentially defective and must decide whether to issue a recall • A recall would maintain and protect the customers’ right to life/safety but it causes stock prices to drop, can damage the company image, and is potentially costly • No recall would mean that the customers are not protected but the company saves money for now • After looking at both options, recalling the product is what should be done when considering the moral rights rule Justice Rule • An example would be a manager that wants to create a pay increase for employees and must decide how to divide the raise among employees • If the raise is based on performance, there will be objective criteria meaning that it is solely based on numbers. This will reward employees regardless of other characteristics which is fair and unbiased • If the manager gives raises based on personal relationships, the criteria is subjective, unfair, and biased. This will contribute to a sense of favoritism in the workplace Practical Rule • An ethical decision that a manager would not hesitate to communicate to people outside of the company because the average person would find it acceptable Types of Sexual Harassment • Quid pro quo: asking or forcing an employee to perform sexual favors in exchange for some reward or to avoid negative consequences • Hostile work environment: telling joke, displaying pornography, making sexually oriented remarks about someone’s personal appearance, and other sex-related actions that make the work environment unpleasant Diversity • The law does not allow discriminatory behavior based on age, gender, race/ethnicity, religion, and disabilities o The law protects workers over 40 years old and restricts mandatory retirement o The law requires equal pay for equal work in regards to gender. Employment decisions cannot be based on pregnancy, childbirth, etc. o Employment decisions cannot be based on race/ethnicity o The law protects religion and requires that reasonable accommodations be made and that there be flexibility for workers o The law protects workers with disabilities and requires reasonable accommodations • There is no federal law that prohibits discriminatory behavior based on sexual orientation, physical appearance, or socioeconomic background o 40% of LGBT employees reported unfair treatment/harassment o It has been noted that job applicants that are more “attractive” are hired more often and earn more o In a weak economy, employees in lower socioeconomic class (people who don’t make as much money) are often the first to be laid off Chapter 4 Task Environment • Has an immediate and direct impact on a manager. It affects the ability to obtain resources and sell products/services General Environment • More difficult to identify and respond to, but these forces create opportunities and threats for managers • The level of affect varies Suppliers • Fewer suppliers means stronger force. This creates less bargaining power for managers because you don’t have a lot of options • More suppliers means weaker force. More bargaining power for managers because you can go somewhere else Distributors • Shipping companies: UPS, FedEx, etc. • Retail organizations: Wal-Mart, etc. • Fewer distributors means stronger force: you have less options on where to sell • More distributors means weaker force Customers • They are ALWAYS a strong force in the environment Competitors • Competition is considered to be the most threatening force in the task environment • More competition means lower prices, smaller market share and lower profitability • Competition changes all of the time so it is important to think about future competition The Barriers to Entry • Higher barriers means less competition because it is harder to enter the market • Lower barriers means more competition because it is easier to enter the market • This helps to predict future competition • Economies of scale, brand loyalty, government regulation Economic Forces • Whether this force presents an opportunity or a threat depends on the type of products/service you sell • A weak economy might be an opportunity for an organization that sells low price items (The Dollar Tree) • A weak economy might be a threat to an organization selling a high price item like a luxury car • The economy may be irrelevant to an organization that sells a necessity item like toilet paper Technological Forces • The technological force can make it easier to innovate, produce, and sell products • Technology can also change the way that your employees perform their jobs • However, this force can make your product/service obsolete (outdated) o Examples would be VCR’s, CRT monitors, and Walkman/discman Political & Legal Forces • Can affect all business or a single industry • Example would be the Affordable Care Act because is has affected numerous companies, as well as the medical and insurance industries • Politics that led to the partial government shutdown affected many organizations Demographic Forces • The average age is increasing for many nations • This might represent an opportunity for the medical and home health care industries • It might also mean that more people are working past the typical retirement age, leaving less room for younger employees Sociocultural Forces • This force affects a manager’s job in two ways 1. It creates trends that may represent threats or opportunities to an organization Ex. Increased interest in personal health/fitness 2. It impacts what managerial styles/actions will work best in a particular society Mores • Mores are usually converted into laws (theft would be an example) • They are critical to society: it is a big deal if you break one of these rules Folkways • Folkways concern customs and common practices • An example is what people should do during the playing of the National Anthem • They are not critical: you may get looked at funny but will not be arrested for breaking these unwritten rules Individualism • Self-reliant, independent, motivated by what is best for individualism • People focus on the care of themselves and their immediate family • Employees would be comfortable working alone and would expect to be recognized for their individual accomplishments Collectivism • The individual is subordinate to their group and the “greater good,” motivated by what is best for others • People focus on the care of extended family and the community • Employees would be comfortable working in groups and would expect to be recognized for their group accomplishments Power Distance • Low power distance means that there is a smaller gap between classes in society. o Inequality is minimized o Managers and employees collaborate o Employees expect to be able to contribute their ideas • High levels of power distance means that there is a large gap between classes in society. o Inequality is evident (the powerful have special privileges) o Managers and employees do not collaborate o Managers tell subordinates what to do Achievement Orientation • Hard work is valued and careers are important • Money and accomplishment are the keys to happiness • 40-40+ hour work weeks are standard • Working nights, holidays, and weekends is common Nurturing Orientation • Relationships and a good work/life balance are the most important and lead to happiness • The work week is shorter (less than 40 hours). • Vacations and holidays are extended and employees receive extended leave in order to attend to personal matters Uncertainty Avoidance • Low levels of uncertainly avoidance means that the environment is easygoing, diversity is valued, and differences in personal beliefs are tolerated. o Innovation and creativity are accepted o Conformity and rules are not as important o Taking risks and doing things differently is often encourages • A high level of uncertainty avoidance means that the there is skepticism of those that are different and have unusual ideas. o The established rules and guidelines are very important o Maintaining the status quo, being conservative, and following traditional methods are encouraged Long-Term Orientation • Planning for the future is the most important • Emphasis is placed on the long-term health of the business • Those with long-term orientation might be happier with a contribution to their retirement fund (as opposed to a bonus) Short-Term Orientation • Taking care of today is the most important • Emphasis is placed on the bottom line and profitability • Employees with short-term orientation are often motivated by immediate rewards like a bonus check Chapter 5 Programmed Decisions • Managers have made the same decisions many times before • There are rules and guidelines to follow based on past experience • There is a lower likelihood of making a poor decision • Example: reordering inventory Non-programming Decisions • Decisions that have not been made before • There are no rules to follow because there is a lack of past experience • There is a greater likelihood of making a mistake • Example: launching a new product line Intuition • Intuition is suitable for minor decisions, or for situations where time is limited. • The disadvantage of intuition is that it is not always right • Example: emergency responders on a call Reasoned Judgment • Reasoned judgment is more time consuming, but may yield better results since more information can be gathered. Classical Model of Decision Making • Prescriptive models tell us how decisions should be made in ideal settings, but do not take into account the reasons why decision-making is difficult • This model is not realistic or applicable Bounded Rationality • Managers are not capable of processing all of the information that is available Incomplete Information • Managers are unable to gain access to all information and will have to work with a limited set Risk • Risk occurs when managers know something • Pharmaceutical companies know that drugs have a 10% chance of passing FDA trials and a 90% chance of failing Uncertainty • Uncertainty occurs when managers don’t know the likelihood of success or failure, or what outcomes may occur. This is much more common Ambiguous Information • Changes in the global environment are often ambiguous (unclear) • A shift in sociocultural trends could represent a threat to one manger or an opportunity to another Time Constraints & Information Costs • The decision-making process often occurs in a deadline environment • If you have one month to make a decision, this will limit your ability to gather the information that you need • In addition, gathering information costs money • Managers operate under budget constraints Satisficing • Imagine that you are hungry and decide to eat at a restaurant close to campus instead of the best restaurant in town. This is satisficing Four Criteria for Evaluating Alternatives • Legal, ethical, economic, and practical Group Decision Making • Superior to individual decision making • Choices are less likely to be bias • Combine skills • Improve feasible alternatives • Allows managers to process more information • Better probability of success Groupthink • A pattern of faulty and biased decision making that occurs in groups whose members strive for agreement among themselves at the expense of accurately assessing information relevant to a decision • A group may rally around one person (top manager or CEO) and blindly support that individual’s choices. Decision-making becomes emotional, instead of logical


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