fundamentals of Management, test two study guide
fundamentals of Management, test two study guide MGMT 3202
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This 7 page Study Guide was uploaded by Carson Talbert on Sunday February 21, 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 67 views. For similar materials see Fundamentals of Management in Business at East Carolina University.
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Date Created: 02/21/16
Test 2-study guide Ethical Dilemma- When you want to help someone but helping them goes against your values and principles. Ethics V.S Law: Laws can be ethical or unethical Neither are fixed values/principals Examples: Legal but unethical- CEO of Worldcom, Bernie Ebbers, appoints close personal friends to the Board of Directors. This makes it so that he can make decision on his own that everyone will agree with. This is unethical because he has full power now rather than being second questioned on his decisions. Illegal but ethical- Doctors in small towns agree to set their prices at below average to reduce patient costs. Stockholders- People that invest in the company to own a portion of it and helps the company with the resources needed to run. Want their investments to have a maximum return and by doing this they want the company to run ethically by not taking any risks or bad decision to harm it. Managers- responsible for making decisions on a company’s human resources and financial capital to maximize profitability. Have to manage many interests. Employees- company acts ethically so that their employees feel well treated to create efficiency in the work place. Suppliers- expect to be paid the agreed upon price and at the agreed upon time. Distributors- expect to pay the agreed upon price for the expected quality of product. Customers- considered the most critical stockholder. Companies must produce effective and efficient products to ensure that there customers are satisfied. Community- this is the location of the company and the ethnic community it is surrounded or apart of. Utilitarian Rule- ethical decision that is the best decision to be made for the most amount of people. Examples: manager of a company with high labor costs must decide whether or not to restructure. Best for company= Restructuring: Improves efficiency and increases profitability Benefits stockholders and customers Benefits employees still working for better opportunity for competitive positions Not restructuring: Benefits employees and managers that keep jobs No increase in efficiency or profitability Hurts stockholders and customers Also hurts staffs competitive advantage for higher positions Moral Rights Rule- ethical decision that is made to protect people’s rights, freedom, life and safety, property, privacy, free speech. Example: a manager of an organization discovers that a product is potentially defective and must decide recall or not. Ethical decision= Recall: Maintain life and safety of customers Damage companies image and stock Potentially costly No Recall: Doesn’t maintain life and safety Saves company money Justice Rule- ethical decision that creates equal punishments for wrong doings and rewards for accomplishments. Example: a manager wants to implement a pay increase for employees and must decide how to allocate raises. Ethical= Raises based on performance: Objective criteria Will reward on performance regardless of anything Fair and unbiased Raises based on relationships: Subjective criteria Will reward on relationship with employee Unfair and biased Practical Rule- this is an ethical decision that is made and that would be comfortable to communicate with anyone. Unethical Workplace Behaviors: Sexual harassment and discrimination 2 Types of sexual harassment: Quid Pro Quo- asking or making an employee to do something sexual for a reward Hostile work environment- making sexual remarks or actions in the workplace, which in return makes someone uncomfortable. Sources of Diversity: The Law prohibits discrimination based on these: Age- protects workers over 40. Gender- equal pay for equal work. Race- can’t base decisions on race. Ethnicity- can’t base decisions on ethnicity. Religion- law protection requires reasonable accommodations. Disability- law protection requires reasonable accommodations. No discrimination laws based on these: Sexual orientation- often treated unfairly. Physical appearance- applicants more “attractive” often are hired. Socioeconomic background Global Environment- Conditions on a global scale that make it difficult and sometimes impossible for a manage to obtain or use an organizations resources. Forces of Global Environment: Task Environment- this is a group containing suppliers, distributors, customers, and competitors. This group can have a huge impact on the decision-making of a manager; it affects obtaining resources and the sales of the company’s products. Suppliers- sells resources to other companies need it in order to produce their product. If a company only has a few suppliers the manager doesn’t have much bargaining power because there isn’t anywhere else to get it from. However, if a company has multiple suppliers the manager has more bargaining power than the supplier because he can take his business elsewhere. Relationships with suppliers: Can be difficult to have because of shortage of resources, and have a critical item a company might need. This gives the bargaining power to the supplier because they can raise the prices and companies will still need it and ill have to purchase. Distributors- help sell the goods and services of another companies. Two types: Shipping companies (UPS, FedEx) Retain organizations (Wal-Mart) Customers- buys the goods and services from a company. Customers are a strong factor of how well the company does. Competitors- companies that sell similar goods and services. Competition is considered the most threatening factor. Barriers to entry- factors that make it difficult for a company to join a task environment. High barriers= less competition Low barriers= more competition Types of barriers: Economies of scale- saving cost level by increasing level of production. Brand loyalty- consumers already enjoy a brand that already exists and don’t need to try another one. Government regulations General Environment- more difficult to detect than Task Environment but affects it greatly and has to do with the economical, technological, socio-cultural, demographic, political and legal forces. Economic- unemployment, inflation, economic growth, and interest rates. All of these can affect an organizations well being, depending on the type of product it sells. Example: in a weak economy Might mean that people will start shopping more and low price stores. (Dollar Tree) Threatens companies with high price items. (Car dealerships) Technological- the change in technology that managers use to develop their products. This can make it easier to innovate, produce, and sell products. It can also change the way that employees perform their jobs. Political and Legal- the change in laws and regulations. Examples: Deregulation of industries Privatization of companies Increases emphasis on environmental protection Demographic- the change or changing of characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class. The average age in increasing for many nations because more people are working past the typical retirement age, which makes less jobs for younger employees. Socio-cultural- pressures from the social structure of a country, society, national culture. Affects a manager in two ways: 1. Creates trends that may represent threats or opportunities to an organization. 2. Impacts what managerial styles or actions work best in a particular society. National culture- the values that a society considers important and the norm behaviors that are accepted in that society. Norms- codes that typically advise how people should act in certain situations. Two types of norms: 1. Mores- norms that are considered important to a functional society or social life. a. Example: expect people to be honest or chew with ones mouth closed. 2. Folkways- informal rules that guide routine of everyday life. a. Example: what people should do during the national anthem. Hofstede’s model of national culture: Individualism vs. Collectivism: Individualism- self reliant, independent, motivated by what is best for themselves, care about themselves and immediate family. These types of employees would be comfortable working alone, and expect to be recognized for their individual accomplishments. Collectivism- subordinate to their group and the “greater good”, motivated by what is best for others. These employees care about extended family and community, also comfortable working in groups and expect to be recognized for their group’s accomplishments. The United States is more individualism Power distance low vs. high: Low- a smaller gap between classes in society, inequality is minimized, managers and employees collaborate, and employees are expected to share their ideas. High- a large gap between classes in society, inequality is evident and the powerful have special privileges, managers and employees do not collaborate, and managers tell subordinates what to do. The United States use a little of both Achievement vs. Nurturing orientation: Achievement- hard work is valued, careers are important, money and accomplishments are keys to happiness, forty plus hour work weeks are considered standard, working nights, holidays, and weekends is common. Nurturing- relationships and good work/life balance are most important and lead to happiness, work weeks is forty hours or less, vacations and holidays are extended, employees receive extended leave in order to attend personal matters. Uncertainty avoidance low vs. high: Low- easygoing, value diversity, tolerates differences in personal beliefs, innovation and creativity are accepted, rules aren’t as important, taking risks and doing things differently is often encouraged. High- skeptical of those that are different and have unusual ideas, establishing rules and guidelines are important, maintaining status quo, being conservative, and following traditional methods are encouraged. Long-Term vs. Short-Term orientation: Long-Term- planning for the future is important, emphasis is placed on long-term health of business, those with a long-term orientation might be happier with contribution to their retirement fund (as opposed to the bonus). Short-Term- taking care of today is most important, emphasis is placed on the bottom-line and profitability, employees with a short-term orientation are often motivated by immediate rewards like a bonus check. Two types of decisions: Programmed decisions- managers have made decision many times before, there are rules and guidelines to follow based on past experience, lower likelihood of making poor decision o Example: recording inventory Non-programmed decisions- these decisions have not been made before, no rules/guidelines because lack of past experience, greater likelihood of making mistake o Example: launching a new product line Intuition vs. Reasoned Judgment decisions: Intuition- feelings and beliefs that come that come to mind effortlessly with little information gathered, usually an on-the- spot decision. Intuition is suitable for minor decisions or for situations where time is limited. Reasoned Judgment- decisions that take time and effort to make with a lot of information gathered, also generate multiple alternatives. Reasoned judgment may yield better results since information can be gathered and have more time to think it through. Administrative model of decision making- approach to decision-making that explains why it is uncertain and risky and why managers make a satisfying decision rather than an optimal decision. Bounded rationality- limitations on one’s ability to interpret, process, and act on information. Managers are not capable of processing all of the information that is available. Incomplete information- never be able to get all the information that you want, managers are unable to gain access to all information and will have to work with a limited set. o Risk- occurs when the probability that the possible outcomes will occur based on the course of action. Often occurs when the manager knows the risk. Example: pharmaceutical companies know that drugs have a ten percent chance of passing FDA trials. o Uncertainty- future outcomes are unknown and can’t be determined. Often occurs when the managers don’t know the likelihood of success or failure. These are much more common. o Ambiguous information- information that can be interpreted in multiple ways and can be conflicting. Often global environments are ambiguous such as socio-cultural. o Time constraints and information costs- decision-making often occurs in a deadline which limits your ability to gather information. Also gathering information can be costly and managers work within a budget. Satisficing- exploring a limited sample of all potential alternatives. May not be the best decision but is what you have to work with. Group decision-making: Advantages- less likely to be bias, typically results better outcomes, creates more alternative ideas, processes more information. Disadvantages- more time consuming, agreement is often difficult, groupthink. Groupthink- a group may rally around one person (maybe top manager or CEO) and blindly support that individual’s choice. Decision-making becomes emotional instead of logical. Improving group decision-making: Group diversity- different minds will come up with different alternatives. Devil’s advocacy- looking at the preferred alternative to assess its strengths and weakness before it is implemented.
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