Exam 2 Study Guide
Exam 2 Study Guide 301
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This 12 page Study Guide was uploaded by Ashley Butz on Wednesday March 11, 2015. The Study Guide belongs to 301 at Washington State University taught by Dr. Leah Sheppard in Winter2015. Since its upload, it has received 239 views. For similar materials see Principles of Managment and Operations in Business, management at Washington State University.
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Date Created: 03/11/15
MANAGEMENT 301 PRINCIPALS OF MANAGEMENT AND ORGANIZATION Exam 2 Study Guide Chapters 711 12 Angry Men CHAPTER 7 Information amp Decision Making 0 5 Criteria for Useful information o Timely Information is available when needed it meets deadlines for decision making and action High Quality Information is accurate and it is reliable it can be used with con dence Complete as possible Information is complete and sufficient for the task at hand it is as current and up to date as possible 0 Relevant The information is appropriate for the task at hand it is free from extraneous or irrelevant materials 0 Understandable The information is clear and easily understood by the user it is free from unnecessary detail 0 Difference between competencies o Technological competency Ability to understand new technology 0 Information competency Ability to locate and organize information 0 Analytical competency Ability to use that information 0 Ex airlines could save money by managing lift offs more efficiently 0 Difference between Information 0 Intelligence information Gathered from stakeholders and environment 0 Internal information Flows within organization 0 Public information Disseminated back to stakeholders public and consumers 0 Flow chart pg 165 amp 185 o How videos photos etc go viral can be problematic for company 0 Difference between classical and behavioral models of decision making 0 Classical Assumes perfect information make optimizing decision 0 Behavioral Assumes bounded rationality imperfect information make satis cing decision quotgood enoughquot 0 O Difference between a performance threat and a performance opportunity 0 Performance threat A situation that can hurt future if dealt with incorrectly 0 Ex High turnover in the service industry Can turn threat into opportunity 0 Performance opportunity A situation that offers the chance for a better future if dealt with correctly 0 Ex Find out why high turnover in service industry and x problem 0 Train employees to deal with difficult customers 0 Create a brand employees are part of Subway sandwich artists Three ways of approaching problems 0 Avoidance 0 Solving o Seeking 0 Manager should be a SEEKER Differences between ways of thinking 0 Systematic thinking Stepbystep rational 0 Ex buying a car look at mpg value cost engine interior etc o Intuitive thinking Quick and broad go with your gut 0 Ex what to eat for lunch Differences in Cognitive Styles 0 Multidimensionalthinking Ability to simultaneously address many problems at once Crucial in crises scenarios 0 Strategic opportunism Focuses on longterm objectives while being exible in dealing with short term problems 0 JC Penny ran commercial apologizing for changes and asking for customers to come back 0 Target ran full page ad in more than 50 newspapers in US to apologize for breach of security Know pro le of o Sensation thinkers Realistic approach deal with hard facts impersonal concrete Facts goals 0 Nurse 0 Doctor 0 Intuitive thinkers Comfortable with abstract take idealistic approach impersonal Idealistic theoretical Professor 0 Intuitive feelers Prefer broad issues insightful and value human relationships personal abstract Thoughtful exible Social marketers o Sensation feelers Tend to be realistic but emphasize both analysis and human relations personal concrete Facts feelings o Attorney 0 Social worker Steps of decisionmaking process 0 Step 1 Identifying and de ning problem Mistake 1 0 Don t be too narrow or too broad De ne problem in a way to provide best possible range of problemsolving options Mistake 2 0 Don t focus on symptoms rather than causes Mistake 3 0 Don t choose the wrong problem to deal with at a certain time Prioritize in order of importance 0 Step 2 Generate and Evaluate Alternative Courses After problem de ned process of collecting information must begin Costbene t analysis 0 Costs what are costs of implementing alternative 0 Bene ts what are bene ts of using alternative to solve a performance de ciency or take advantage of opportunity Timeliness how fast can the alternative be implemented and a positive impact be achieved Acceptability to what extent will alternative be accepted and supported 0 Ethical soundness how well does alternative meet acceptable ethical criteria in eyes of various stakeholders Groupthink be cautious quotTwo heads are better than onequot 0 People generally see decisions as being more fair when they were made by a group opposed to individual 0 Group of decisionmakers may fail to apply critical thinking to process and can make severe error in judgment 0 Similar to group polarization 0 Factors producing groupthink Fear of dissenting Time pressure 0 0 Isolation 0 Presence of authority 0 Ex Pearl Harbor bombing Challenger space shuttle disaster 0 Step 3 Choose preferred course Classical decision model Assumes decisionmaker acts rationally has perfect information makes optimizing decision that gives the best possible solution Behavioral Decision Maker 0 Questions assumption of perfect information o Introduces term bounded rationality Making decisions within constraints of limited information and alternatives 0 Decisionmaker makes satisficing decision First satisfactory alternative that comes to one s attention 0 Step 4 Implement decision Mistake in implementation lackof participation error 0 Failure to involve in a decision the person whose support is needed to implement it Need buyin and support for decision Critical error at all stages of process is not getting buyin 0 Step 5 Evaluate Results Might seem intuitive but lot of decisionmakers skip it Important to plan for this step ahead of time Do a pre and postdecision assessment 0 Decision errors and traps Bombarded with information use heuristics to simplify and understand Heuristics strategies for simplifying decision making Take short cuts to save time Framing error 0 Trying to solve a problem in context it was perceived positive vs negative framing Way information presented can change decisions we make 0 Decisionmaking and Judgment Biases 12 Angry Men Availability Bias 0 Based on recent or salient event 0 911 plane ticket demand down right after 0 Overestimate likelihood of dying from asthma or drowning vsshark 0 Coin toss Representativeness Bias 0 Judging something based on its similarity to other cases 0 Stereotyping Gambler s fallacy Think past probability affects case even though not related 0 Haven t won in last 2 hours so due to win soon Framing error In uences decision when framed positively Anchoring and adjustment Bases decision on incremental adjustments from prior decision point 0 Relevant to negotiations o Doorintheface Con rmation BiasError Seek out information to con rm opinions andor rationalize decisions 0 Buyer s remorse avoiding information after decision is made Escalation of commitment Continuation of course of action even though it is not working 0 Associated with sunk cost fallacy down faulty path but already invested so much denial 0 Buy tickets to concert get sick go to concert bc would have wasted money but made it worse by going bc sick Hindsight Bias 0 Bad feeling about something that was con rmed 0 Thinking of someone then they call you shortly after 0 CHAPTER 8 Planning processes and Techniques 0 Bene ts of planning Provides direction Reduces uncertainty Minimizes waste and redundancy Establishes goals or standards Helps organization understand what is within its control 0 Good planning helps make managers Advantageoriented All resources are used to the best advantage 0 Tactical plans Actionoriented A results driven sense of direction 0 Avoid complacency trap Changeoriented o Anticipating problems and opportunities to best deal with them Priorityoriented 0 Most important things get rst attention 0 Drawbacks of planning Can prevent or slow down needed change Decreased exibility Creates false sense of certainty 0 Planning based on assumptions that might not be true Detachment of planners from details could avoid details 0 Benchmarking Use external and internal comparisons to plan for future improvements 0 Be a good planner Set goals Develop commitment Develop effective action plans Track progress Maintain exibility o What makes great goal quotSMAR quot goals book 0 Speci c Measurable Attainable ReaHsUc o Timely Challenging stretch goal 0 Develop goal commitment Set goals jointly Management by objectives 0 Make goals public 0 Personal Time Management tips 0 OPORD Planning Template 1 Situation provides information essential to leader s understanding of situation 2 The Mission what is the task and why is it being completed 3 Execution what does the end state look like 0 Concept Maneuvers 4 Service Support what is needed to undertake the task 0 Goal Alignment How do goals differ from one organizational level to next 0 Goals need to motivate and inspire people to work hard 0 Goals set everywhere in org should ideally help advance overall mission or purpose Hierarchy of goals 0 Mission and purpose 0 Top management objective 0 Senior management objective Middle management objective 0 Lower management objective 0 Management by objectives Process of a team leader or supervisorjointly setting goals with subordinate or team member and following up on those goals Team leader gt and team member 0 jointly plan 0 Set objectives 0 Set standards 0 Choose actions Individually act 0 Performing tasks member 0 Providing support leader Jointly control 0 Reviewing results 0 Discussing implications 0 Renewing MBO cycle CHAPTER 9 Control Processes amp Systems 0 Controlling Process of measuring performance and making sure the right things happen at the right time and in the right way 0 Organizational learning Feedforward controls I Preliminary o Preventative in nature 0 Ensures directions and resources are right before the world begins 0 McDonald s requires suppliers to produce exact speci cations Concurrent controls I Steering 0 Focus on what happens during the process 0 Face to face supervision and observation 0 Likely most relevant during training 0 Often selfimplemented through trial and error Feedback controls I postaction after action review I call center recordings 0 customer satisfaction surveys 0 course evaluations Selfcontrol I Discipline Employees jointly set goals 0 Employees see meaning in job 0 Help employees get kind ofjobs they want within org 0 Measure outputs PEO example I Employees work best when I See purpose in job 0 Have resources they need 0 Are treated with respect and consideration 0 Bureaucratic control I Control that ows through org s hierarchy with policies procedures supervision I Daytoday supervision micro level I Performance bonuses meso level I Romantic relationship policies maco level 0 Clan control I normative control I in uence behavior through norms and expectations set by organizational culture I peer pressure Stanford Prison study Managers need to pay attention to social dynamics of workplace 0 Market control In uence of market competition on behavior of organizations and members 0 Walmart now largest supplier of green products 0 Input and Output standards Input 0 Work efforts 0 Conscientiousness responsiveness cooperation 0 Ex trying to improve 0 Subjective 0 Can t measure very well Output Quanti able performance measures 0 Quantity quality cost or time Ex quality index not very accurate 0 CPMPERT Critical path method program evaluation and review technique 0 Identify time required to complete tasks and order of steps 0 Each task assigned an earliest and latest start and end time o Tasks with no slack time lie among critical path 0 Critical path path must stay on time for subject to remain on schedule Gantt Chart Graphically displays the scheduling of tasks required to complete project 0 Breakeven Analysis book BEP units Fixed costPrice Variable BEP Fixed cost1 VariablePrice o Asch Line studies video Determines clan control 0 Types of conformity o Informational and normative Asch Line studies 0 Instructional and normative 0 Instructional and informational o Normative and nonnormative 0 Critical thinking Have to identify potential quotthird variablesquot aka lurking variables confounding variables andor quotspurious correlationsquot 0 Ex Students who sit closer to front in class earn higher grades than those who consistently sit in the back 0 Ex People with gum disease are more likely to suffer from heart attacks 0 Does gum disease cause heart attacks Ability to gather organize analyze and interpret information to make good decisions and arrive at more accurate conclusions 0 Errors in critical thinking Correlation does not imply causation o X and Y tend to cooccur so we assume X causes Y 0 In reality Z confounding or lurking variable is causing both Failure to consider base rates 0 1 of 1000 people have virus 0 Test has falsepositive rate of 5 wrong 5 time 0 Of 1000 people only 1 will have XYZ virus Of other 999 tested there will be 50 incorrectly diagnosed 05x999 bc 5 false positive rate 0 51 patients test positive but only 1 has the virus approx 2 0 CHAPTER 10 Strategy and Strategic Management 0 Strategy Means to achieving sustainable competitive advantage 0 Technology 0 Cost and quality 0 Knowledge and speed Barriers to entry 0 Financial resources Strategic Plan 0 Used to guide resource allocations for longterm advancement of organization s mission purpose and vision Levels of strategy 0 Corporate 0 Stars dominant market sharehigh growth markets growth Strategy invest into production improvements distribution promotion efficiency 0 Cash Cows dominant market sharelow growth markets stability or modest growth Strategy maintain price advantage product improvement 0 Question Marks low market sharehigh growth markets growth or retrenchment Strategy gain market share buy competitors 0 Dogs low market sharelow growth market retrenchment Strategy maximize shortterm returns or get rid of 0 Business 0 Gain a competitive advantage in industry occupied Choices about product and service mix facilities locations new technologies etc 0 Functional o How to best utilize resources Focus on management practices to improve things like operating efficiency product quality customer service or innovativeness 0 Industry Attractiveness Competition 0 Intensity of rivalry among rms in industry and ways they behave competitively toward one another New entrants Threat of new competitors entering market Alternatives 0 Threat of substitute products or services Supplier power 0 Ability of resource suppliers to in uence price Customer power 0 Ability of customers to in uence price 0 Corporate Strategies Growth 0 Vertical integration 0 Acquiring suppliers of distributers Global expansion 0 Adopts standardized products and advertising for use worldwide Acquisitions o Customizes products and advertising to best t local needs 0 Mergers o Seeks ef ciencies of global operations with attention to local markets Strategic allianceJoint Alliance 0 Organizations join in partnership to pursue an area of mutual interest Barnes amp Noble with Starbucks Nike with Apple Coopetition 0 Two competitors join to target same market 0 Collusion unethical way to coopetition RestructuringRetrenchment Bankruptcy liquidation turnaround divestiture downsizing 0 Business Strategy Imitation knockoffs Differentiation 0 Products unique and different Cost leadership 0 Produce at lower cost and sell at lower cost Focused differentiation focused cost leadership 0 Use differentiation and target needs of a special market Focused cost leadership 0 Use cost leadership and target needs of a special market 0 SWOT Analysis gure 104 Opportunities Threats o 12 Angry Men Themesconcepts o Groupthink 0 Decisionmaking o Intuitive Using information 0 Analytical competency Diversity 0 Cultural intelligence Ethical frameworks o Morals rights view justice view individualistic view 0 Procedural justice Cognitive Biases 0 Stereotyping Availability bias 0 juror s past issue with own son of abuse and no relationship now 0 Escalation of commitment 0 Con rmation bias Teamspeci c biases Fear of dissenting Peer pressure Illusion of unanimity Group polarization Not being open to devil s advocate role What they did wrong Bullying pressure Illusion of time pressure 0 Deliberating in a hot room 0 Raising hands to vote 0 Distraction idle chatter o Relying on intuition Exerting pressure on dissenters outside jury room What they did right 0 Allow anonymous responding Perspectivetaking Allowing everyone to speak 0 CHAPTER 11 Organization Structures and Design 0 Structures Formal Structure 0 Official structure of organization 0 Division of work 0 Supervisory relationships 0 Communication channels 0 Major subunits 0 Levels of management Informal Structure 0 Set of unofficial relationships among an organization s members 0 Can be susceptible to rumor inaccurate information Social Network Analysis 0 Components in social network analysis 0 Identi es the informal structures and their embedded social relationships that are active in an organization Functional structure 0 Groups together people with similar skills who perform similar tasks 0 Advantages 0 People share similar expertise interests responsibilities 0 Economies of scale with efficient use of resources 0 Task assignments consistent with expertise and training 0 Highquality technical problem solving 0 Disadvantages 0 Functional chimneys or functional silos problem Divisional structure 0 Advantages o Disadvantages Matrix structure 0 Advantages o Disadvantages Team structure Network structure 0 Organizations Organic Mechanistic o Empowerment I Critical part of decentralization Power can help people act and improve state of affairs Power makes people less aware of constraints to goal Helps people see more choices available when problemsolving 0 Giving power to people at all levels of organization 0 Can hinder perspectivetaking Can lead to more risktaking 0 Network more empowered I Decentralized power 0 No one person has absolute power 0 Problems with accountability 0 Provides checks and balances 0 Can break down status barriers Allows employees to appreciate leaders challenges Forces leaders to get better understanding of employees jobs
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