Test one Study guide
Test one Study guide MGMT 340
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This 16 page Study Guide was uploaded by Vishal Gulati on Tuesday September 13, 2016. The Study Guide belongs to MGMT 340 at University of Illinois at Chicago taught by Peter B. Thompson in Fall 2016. Since its upload, it has received 12 views. For similar materials see Introduction to Organizations in Management at University of Illinois at Chicago.
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Date Created: 09/13/16
Chapter 1 Study Guide 11 Why Innovative management matters ● Twitter is used for all sorts of activities, from organizing protests and spreading the word about political turbulence or natural disasters to marketing products and gathering customer feedback. ● Square is used to process credit cards, and Dorsey’s team is looking for ways to expand into Latin America, Asia, and Europe. Square is also creating a variety of other products and services and is growing rapidly. ● Main point of section: Innovative applications like twitter and square are connecting people from all over the world. 12 The definition of management ● Managers: Today, more than a million small businesses and individuals use Square to process credit cards, and Dorsey’s team is looking for ways to expand into Latin America, Asia, and Europe. Square is also creating a variety of other products and services and is growing rapidly. ● In essence, managers set goals, organize activities, motivate and communicate, measure performance, and develop people. ○ Set goals: establish goals for the group and decide what must be done to achieve them ○ Organize: Divide work into manageable activities and select people to accomplish tasks ○ Motivate and communicate: Create teamwork via decisions on pay, promotions, and through communication ○ Measure: Set targets and standards; appraise performance ○ Develop people: recognize the value of employees and develop this critical organizational asset ● Management definition ○ The 4 functions above ○ The attainment of organizational goals in an effective and efficient manner ● Remember this ○ Managers get things done by coordinating and motivating other people. ○ Management often is a different experience from what people expect. ○ Innovative management is critical in today’s turbulent world. ○ The success of Twitter and Square can be attributed to the effectiveness of its innovative managers. ○ Management is defined as the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources. 13 The four management functions ● The process of management ○ Planning: Select goals and ways to attain them ○ Organizing: Assign responsibility for task accomplishment ○ Leading: use influence to motivate employees ○ Controlling: Monitor activities and make corrections. 14 Organizational performance ● Organization ○ is a social entity that is goal directed and deliberately structured. ■ Social entity means being made up of two or more people. ■ Goal directed means designed to achieve some outcome, such as make a profit (Walmart), win pay increases for members (AFLCIO), meet spiritual needs (United Methodist Church), or provide social satisfaction (a college sorority). ■ Deliberately structured means that tasks are divided, and responsibility for their performance is assigned to organization members ● Organizational effectiveness ○ Providing a product or service that customers value. ● Organizational efficiency ○ refers to the amount of resources used to achieve an organizational goal. ○ Efficiency can be calculated as the amount of resources used to produce a product or service. ● Efficiency and effectiveness can both be high in the same organization. ● The ultimate responsibility of managers is to achieve high performance, ● Performance using resources to complete organizational goals in an efficient and effective manner ● Example:Weak sales led managers to focus on financial efficiency, which successfully trimmed waste and boosted operating income. However, the efficiencies damaged the company’s ability to recruit new artists, which are vital to record companies, and also led to internal turmoil that caused some longtime acts like the Rolling Stones to leave the label. Thus, the company’s overall performance suffered. Managers are struggling to find the right balance between efficiency and effectiveness to get EMI back on the right track. ● Remember this ○ An organization is a social entity that is goal directed and deliberately structured. ○ Good management is important because organizations contribute so much to society. ○ Efficiency pertains to the amount of resources—raw materials, money, and people—used to produce a desired volume of output. ○ Effectiveness refers to the degree to which the organization achieves a stated goal. ○ Performance is defined as the organization’s ability to attain its goals by using resources in an efficient and effective manner. ○ Managers at Illumination Entertainment are concerned both with keeping costs low (efficiency) and producing animated films such as The Lorax that are critically and financially successful (effectiveness). 15 management skills ● Relationship of conceptual, human and technical skills to management ○ Nonmanagers ■ Technical skills, human skills, and then conceptual skills ○ Middle Managers ■ Human skills, conceptual skills, and then technical skills 16c Manager roles ● Role a set of expectations for a manager's behavior Ten manager roles. Exhibit 1.7 ● Informational managing by information ○ Monitor seek and receive info ○ Disseminator forward info to other organization members ○ Spokesperson transmit info to outsiders through speech ● Interpersonal managing through people ○ Figure head: greet visitors ○ Leader direct and motivate employees ○ Laision mainiation info links inside and outside the organization ● Decisionalmanaging through action ○ Entrepreneurinitiate improvement projects ○ Disturbance handler proper action during conflicts ○ Resource allocator: decide who gets resources ○ Negotiator: represent teams interests ● The functions of planning, organizing, leading and controlling apply to nonprofits just as they do to business organizations, and managers in nonprofit organizations use similar skills and perform similar activities 17 ● Good management is just as important for small businesses and nonprofit organizations as it is for large corporations. ● Managers in these organizations adjust and integrate the various management functions, activities, and roles to meet the unique challenges they face. ● Managers in small businesses often see their most important roles as being a spokesperson for the business and acting as an entrepreneur. ● Managers in nonprofit organizations direct their efforts toward generating some kind of social impact rather than toward making money for the organization. ● Nonprofit organizations don’t have a conventional bottom line, so managers often struggle with what constitutes effectiveness 18 ● Turbulent environmental forces have caused a significant shift in the competencies required for effective managers. ● Traditional management competencies could include a commandandcontrol leadership style, a focus on individual tasks, and standardizing procedures to maintain stability. ● New management competencies include the ability to be an enabler rather than a controller, using an empowering leadership style, encouraging collaboration, leading teams, and mobilizing for change and innovation. ● Vineet Nayar, CEO of India’s HCL, illustrates many of the new management competencies. ○ One manager who exemplifies the new management competencies is Vineet Nayar, CEO of India’s HCL, with employees and operations in more than twentyfive countries. When he took over as CEO, HCL was a traditional, hierarchical, commandandcontrol workplace, but Nayar shifted the mindset to treat employees like customers. He is always on the lookout to upgrade management competencies to serve employees and help them do their jobs better. When HCL needed to cut expenses by million due to the global recession, managers asked the employees to come up with ideas for cutting costs without issuing massive layoffs 19 ● Managers are always on the lookout for new techniques and approaches to meet shifting organizational needs. ● Looking at history gives managers a broader perspective for interpreting and responding to current opportunities and problems. ● Management and organizations are shaped by forces in the larger society. 110 ● Scientific management emphasizes scientifically determined jobs and management practices as the way to improve efficiency and labor productivity. ● However, because scientific management ignores the social context and workers’ needs, it can lead to increased conflict and clashes between managers and employees. ● The manner of change could be determined only by scientific study; hence the label scientific management emerged.Taylor suggested that decisions based on rules of thumb and tradition be replaced with precise procedures developed after careful study of individual situations ● Taylor calculated that with the correct movements, tools, and sequencing, each man was capable of loading 45.6 tons per day instead of the typical 12.5 tons ● Surgeons were able to save countless lives through the application of time and motion study 1.11 Characteristic of weberian bureaucracy: ● Division of labor with clear definitions or authority and responsibility ● Positions organized in a hierarchy of authority ● Managers subject to rules and procedures that will ensure reliable predictable behavior ● Management separate from the ownership of the organization ● Administrative acts and decisions recorded in writing ● Personal select and promoted based on technical qualifications 111A ● Folett addressed issues that are timely toda, such employees as aethics, power, and leading in a way that encourages employees to give their best ● Randomly select workers into one group or another. One group you do the experiment too and one group you don’t do anything. Experimental vs control group. ● Maybe the dim the lights to see the difference ● Break times Compared the productivity ● Noticed the productivity was up for both groups ● Due to them being watched, they worked harder ● Agree or disagree questions 111c Human capital ● Abraham Maslow ● Douglas McGregor Human capital: People are assets to be enhanced not costs to be minimized 111d Behavioral sciences approach ● The behavioral sciences approach uses scientific methods and draws from sociology, psychology, anthropology, economics and other disciplines to develop theories about human behavior and interaction in an organizational setting. ● To improve the organization's health and effectiveness through its ability to cope with change, improve internal relationships, and incase problem solving capabilities Remember this ● The humanistic perspective emphasized understanding human behavior, needs, and attitudes in the workplace. ● Mary Parker Follett and Chester Barnard were early advocates of a more humanistic approach to management. ● Follett emphasized worker participation and empowerment, shared goals, and facilitating rather than controlling employees. Barnard’s contributions include the acceptance theory of authority. ● The human relations movement stresses the satisfaction of employees’ basic needs as the key to increased productivity. ● The Hawthorne studies were important in shaping ideas concerning how managers should treat workers. ● The human resources perspective suggests that jobs should be designed to meet people’s higherlevel needs by allowing employees to use their full potential. ● The behavioral sciences approach draws from psychology, sociology, and other social sciences to develop theories about human behavior and interaction in an organizational setting. ● Many current management ideas and practices can be traced to the behavioral sciences approach. 112 Management Science ● Exhibit 1.12 ● Theory X human nature is lazy and the only way to get people to get them to work is with incentive or ● Theory y people like to work. Do what you love and the money will follow ● The quantitative perspective this view is distinguished for its application of mathematics, statistics, and other quantitative techniques to management decision making and problem solving. Remember this ● Management science became popular based on its successful application in solving military problems during World War II. ● Management science, also called the quantitative perspective, uses mathematics, statistical techniques, and computer technology to facilitate management decision making, particularly for complex problems. ● The Walt Disney Company uses management science to solve the problem of long lines for popular rides and attractions at its theme parks. ● Three subsets of management science are operations research, operations management, and information technology. ● Quants have come to dominate decision making in financial firms, and the Wall Street meltdown in 2007–2008 shows the danger of relying too heavily on a quantitative approach. ● Management scholar Peter Drucker’s classic 1946 book Concept of the Corporations parked a dramatic increase in the academic study of business and management. Exhibit 1.13 Without understanding system casualty, top managers would fail to understand why advertising budgets could cause inventory delays and temporarily reduce ..._____ There is no one best way 113c Total quality management Four significant elements of quality management are employee involvement, focus on the customer, benchmarking, and continuous improvement, often referred to as Kaizen Continuous improvement is the implementation of small incremental improvements in all areas of the organization on an ongoing bias Edward Demings ● he would go to companies and give them more ideas about being efficient but wasn’t taken seriously. WWII came along and everything get bombed. Quality became poor and Demming was trying to get people to understand how to be efficient and so he went to japan and was actually listened too and praised ● Make improvements continuously Quality is defined as meet customers requirements A system is a set of interrelated parts that function as a whole to achieve a common purpose. An organization is a system Systems thinking means looking not just at discrete parts of an organizational situation but also at the continually changing interactions among the parts. Subsystems are parts of a system that depends on one another for their functioning. 114 Innovative management thinking for a Changing world Management itself is subject to improvement 114b The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency Exhibit 1.15 Supplyu chain info In India, for example, Walmart managers have invested in an efficient supply chain that electronically links farmers and small manufacturers directly to the stores, maximizing value for both ends. ______________________________________________________________________________ Chapter 13 Study guide Be aware of how you communicate Managers spend at least 80 percent of every working day in direct communication with others. The other 20 percent is doing a desk work 131 Communication is the manager's job ● Communication is the process by which information is exchanged and understood by two or more people, usually with the intent to influence or motivate behavior. ● Message is a purpose to be conveyed ● The purpose of communication is to influence behavior 131B Complication is not just sending information, but sharing information in a planned way. Honoring this distinction between sharing and proclaiming Exhibit 13.2 ● Representing a thought or purpose ● Each of us has our own dictionary in our heads. Gestures, facial emotions, body language ● Sender: formulate message; interpret message ● message : verbal and nonverbal symbols ● Receiver: interpret message; formulate message ● message : verbal and nonverbal symbols Story: Something was stole and the teacher was interviewing students who was suspected and one of the student who got interviewed looked down was blamed. Turns out in the culture of puerto ricans was to look down not to look into the eyes of an adult ● The message is the tangible formulation of the thought or idea sent to the employee ● the channel is the medium by which the message is sent. The channel might be a telephone call, an email message, a formal report, or a facetoface conversation. ● The employee decodes the symbols to interpret the meaning of the message. ● Feedback occurs when the employee responds to a manager’s communication with a return message 132a Open communication climate ● Open communication means sharing all types of information throughout the organization, across functional and hierarchical boundaries. ● In a centralized network, team members must communicate through one individual to solve problems or make decisions. ○ Centralized communication can be effective for large teams because it limits the number of people involved in decision making. ● In a decentralized network, individuals can communicate freely with other team members. ○ Members process information equally among themselves until all agree on a decision. ○ Decentralized communication is best for complex, difficult work environments where teams need a free flow of communication in all directions. ● Lack of information fueled rumors and damaged morale. ● People that rely on rumors and will often to assume the worst ● When people have access to complete information they are more likely to come help with creative solutions to problems and make decisions that are good for the company ● Being transparent helps the organization Gender differences in communication ● 70 percent of communication occur nonverbally ● When a man nods, it means he agrees when a woman nods, it communicates that she is listening. ● When woman establish status they do it to whos popular girls ● When men do it, everyone's included but you better know your place. Who out ranks who Ex. bringing your brother to a soccer game. Younger brother doesn't get picked till last which mean. ● Sports talk: Did you see the game? They are not sharing info but they are just showing off Pg 553 The Hierarchy of channel richness ● Channel richness is the amount of information that can be transmitted during a communication episode ○ the ability to handle multiple cues simultaneously; ○ the ability to facilitate rapid, twoway feedback; and ○ the ability to establish a personal focus for the communication. ● Managers use email or text messaging to avoid the emotional discomfort of a real time conversation, hiding behind their computers to send rebukes or criticism that they would never deliver in person 132c Communication to persuade and influence others ● Although communication skills have always been important to managers, the ability to persuade and influence others is even more critical today. ● Managers should describe the benefits that employees will experience by embracing a new policy ● A manager's credibility is based on knowledge, expertise and interpersonal skills. ● The term communication apprehension describes this avoidance behavior and is defined as “an individual’s level of fear or anxiety associated with either real or anticipated communication.” ● Establish credibility ● Build goals on common ground ● Connect emotionally ● Use multiple media to send important messages 132d communicating with candor ● say what you mean mean what you say ● Use “I statements. “ To communicate with candor, you should keep the focus on the specific perception you have ,how it makes you feel and the effect it's having on you, rather than accusing to blaming the other person ● Story: Structure of i statement: State a fact, state the feeling, describe the consequence, what you want ● Stick to facts rather than judgments ● Be clear, specific, and direct in you requests ● Communicating with candor is an important part of creating an open communication ● Disagreeing takes more guys ● Make it a point to disagree. Don’t shoot messenger 132e Asking Questions ● Most managers do 80 percent telling and 20 percent asking, while it should be the other way around. ● Builds trust and openness between managers and employees ● Builds critical thinking skills ● Questions stimulate the mind and give people a chance to make a difference 132f ● Of all the competencies critical to successful managerial communication, listening is at the top of the test. ● Grasping both facts and feelings ● Listening involves the skill of grasping both e facts and feelings ● They concentrate on formulating what they are going to say next rather than on what is being said to them ● Some people want to to feeling heard ● Sympathy and empathy ● Our listening efficiency, as measured by the amount on what is being said to them 132g Nonverbal communication ● Manager should be aware that their body language facial expressions, gestures, touch, and use of space ca can communicate a range of messages , from enthusiasm, warmth and confidence to arrogance, indifference, and displeasure ● Nonverbal communication refers to messages sent through human actions and behavior rather than through words Exhibit 13.5 Keys to effecive listening ● Listen actively ● Find areas of intrest ● Resist directions ● Capitalize on the fact that thought is faster ● Be responsive ● Judge content, not delivery ● Avoid pemature judgment ● Listen for ideas ● Work at listening ● Excersise ones mine Poor listnet 133a Formal communication channels ● Formal communication channels are those the flow within the chain of command or task responsibility defined by the organization. ● Company, Division, Team or group, Individual ● Be aware so you understand intercommunication ● Downward communication refers to messages sent from top management down to subordinates; upward communication includes messages that flow from the lower to the higher levels in the organization’s hierarchy ● Downward and upward communication: Vertically organized companies ● Horizontal communication : Sharing info across departments and levels: ○ is the lateral or diagonal exchange of messages among peers or coworkers and includes team communication. Exhibit 13.6 ● Information goes downward, upward, and horizontal communication in organizations. ● Put lists in notes How to communicate ● Build it before you need it ● Never eat lunch alone ● Make it a winwin ● Focus on diversity ● Blackout story 133 b personal communication channels ● Personal communication channels exist outside the formally authorized channels ● Personal networking refers to the acquisition and cultivation of personal relationships that cross departmental, hierarchical, and even organizational boundaries. ● Employees use grapevine rumor to fill in information gap[ and clarify management decisions. ● If a leader has his car to the ground, gossip can be a way for him to get a sense of what his employees are thinking or feeling. ● Connecting the dots ● Respect the reader: Sloppy writing indicates that you think your time is more important that of your readers ● Write clearly rather than impressively: don’t use pretentious or infated language ● Get a second opinion.: in all cases, read, and revise the memo. Exhibit 13.7 ● Stay calm listen hard ● Be visible ● Get the awful truth out ● Communicate a vision for the future ● Plan for disasters and for the unthinkable ______________________________________________________________________________ Chapter 15 151 The meaning of control ● Control is simply problem solving ● Organizational control is the systematic process through which managers regulate organizational activities to meet planned goals and standards of performance. 152a steps of feedback control ● feedback control model helps managers meet strategic goals by monitoring and regulating an organization’s activities and using feedback to determine whether performance meets established standards. ● Tracking such measure a customer service, product quality, or order accuracy ● Standards should be defined clearly and precisely ● ● ● ● ● ● ● ● ● ● ● Exhibit 15.1 diagnose the cause 152b The balanced Scorecard ● The balanced scorecard is a comprehensive management control system that balances traditional financial measures with operational measures relating to a company’s critical success factors. ○ 4 major perspectives: financial performance, customer service, internal business processes, and the organization’s capacity for learning and growth. ● 3 legs of the stool ● Exhibit of the stool ● Movie idiocracy people don't learn from mistakes ● If you don't satisfy all three.. Then you will fail ● potential for learning and growth ● As with all management systems, the balanced scorecard is not right for every organization in every situation ● Story about burnt toast: Customer doesn't like burnt toast so employee scrapes it out but next customer is the same so now the employee has to figure out why the toast was burnt. LEARN FROM YOUR MISTAKES ● Links targets and measurements to corporate strategy 15.3 Budgetary control ● Definition: Process of setting targets for an organization's expenditures, monitoring results and comparing them to the budget, and making changes as needed ● A responsibility center is defined as any organizational department or unit under the supervision of a single person who is responsible for its activity. 153 a expense budget ● An expense budget includes anticipated and actual expenses for each responsibility center and for the total organization ● expense budgets help identify the need for further investigation but do not substitute for it. 153b revenue budget ● A revenue budget lists forecasted and actual revenues ● venues below the budgeted amount signal a need to investigate the problem to see whether the organization can improve revenues. ● In contrast, revenues above budget would require determining whether the organization can obtain the necessary resources to meet the higherthanexpected demand for its products or services. 153c Cash budget ● The cash budget estimates receipts and expenditures of money ● If the cash budget shows that the firm has more cash than necessary to meet short term needs, the company can arrange to invest the excess to earn interest income. ● In contrast, if the cash budget shows a payroll expenditure of coming at the end of the week but only in the bank, the organization must borrow cash to meet the payroll. 153d capital budget ● Capital budget lists planned investments in major assets such as buildings, heavy machinery, or complex IT systems, often involving expenditures ● Like how UH is being repaired because it is different cash. 15e zerobased budget ● Is an approach to planning and decision making that requires a complete justification for every line item in a budget, instead of carrying forward a prior budget and applying a percentage change ● Between thompson and wife make 100000 and <80000> in expenses so 20000 ● Next year thompson and wife make 105000 and <84000> in expenses so 21000 ● Zero based is saying get rid of the and starting from scratch ● Top down budgeting ○ The budget amounts for the coming year are made by middle and lower level managers ● Bottom up budgeting ○ Lower level managers anticipate their departments’ resource needs and pass them up to top management approval Accounting terminology GAAP generally accepted accounting principles Profits and cash are not necessarily the same number Income statements money coming in, money coming out 154B Financial analysis: Interpreting the numbers ● A manager's needs to be able to evaluate financial reports that compare the organization's performance with earlier data on industry norms 15.5 ratios ● The liquidity ratio indicates an organization's ability to meet its current debt obligations ○ Current ratio = current assets/current liabilities ○ Quick ratio= (cash + accounts receivable)/ current liabilities ● Activity ratio measure internal performance ○ Inventory turnover = total sales/ average inventory ○ Conversion ratio= purchase orders/ customer inquiries ● Profitability ratios describes the firm's profits relative to a source of profits ○ Profit margin on sales= net income/ sales ○ Gross margin = gross income/ sales ● The balance sheet shows the firm’s financial position with respect to assets and liabilities at a specific point in time. ● The income statement summarizes the firm’s financial performance for a given time interval.
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