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Fundamentals of Management, Chapters four and five Notes

by: Carson Talbert

Fundamentals of Management, Chapters four and five Notes MGMT 3202

Marketplace > East Carolina University > Business > MGMT 3202 > Fundamentals of Management Chapters four and five Notes
Carson Talbert
GPA 3.036
Fundamentals of Management
Tiffany Woodward

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About this Document

managing in a global environment, decision making and its process.
Fundamentals of Management
Tiffany Woodward
Class Notes
Management, business, global environment, decisions, decision-making
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This 0 page Class Notes was uploaded by Carson Talbert on Sunday February 21, 2016. The Class Notes belongs to MGMT 3202 at East Carolina University taught by Tiffany Woodward in Spring 2016. Since its upload, it has received 20 views. For similar materials see Fundamentals of Management in Business at East Carolina University.


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Date Created: 02/21/16
Chapter 4 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 decisionmaking of a manager it affects obtaining resources and the sales of the company s products Suppliers ses 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 suoDIiers 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 0 Shipping companies UPS FedEx Retain organizations WalMart 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 entrv 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 0 Brand loyalty consumers already enjoy a brand that already exists and don t need to try another one 0 Government regulations General Environment more difficult to detect than Task Environment but affects it greatly and has to do with the economical technological sociocultural demographic political and legal forces Economic unemployment in ation 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 0 Might mean that people will start shopping more and low price stores Dollar Tree 0 Threatens companies with high price items Car dealerships Technolodical 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 Sociocultural 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 Globalization a set of speci c or general forces that connect economic political and social systems across the countries cultures or geographical locations so that nations become increasingly interdependent and similar Declining trade barriers Made opportunities for companies to expand the market for their goods and services Allowed managers to buy and sell goods and services globally National culture the values that a society considers important and the norm behaviors that are accepted in that society Values ideas about what a society believes are good and desirable Provides the appropriate roles for men and women also takes a long time to be changed 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 lndividualism 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 quotgreater goodquot 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 worklife 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 LongTerm vs ShortTerm orientation 0 LongTerm planning for the future is important emphasis is placed on longterm health of business those with a longterm orientation might be happier with contribution to their retirement fund as opposed to the bonus 0 ShortTerm taking care of today is most important emphasis is placed on the bottomline and pro tability employees with a shortterm orientation are often motivated by immediate rewards like a bonus check Chapter 5 Decision making process which managers respond to certain opportunities and threats by analyzing options The outcome is usually based on the company s future goals and wellbeing Two tvpes 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 0 Example recording inventory Nonbrodrammed decisions these decisions have not been made before no rulesguidelines because lack of past experience greater likelihood of making mistake 0 Example launching a new product line Intuition vs Reasoned luddment decisions lntuition feelings and beliefs that come that come to mind effortlessly with little information gathered usually an onthe spot decision Intuition is suitable for minor decisions or for situations where time is limited Reasoned luddment 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 Classical model of decisionmaking prescriptive models tell us how decisions should be made in ideal settings but do not take into account the reasons why decisionmaking is difficult Administrative model of decision making approach to decisionmaking that explains why it is uncertain and risky and why managers make a satisfying decision rather than an optimal decision Bounded rationalitv 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 0 M 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 0 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 0 Ambiguous information information that can be interpreted in multiple ways and can be con icting Often global environments are ambiguous such as sociocultural 0 Time constraints and information costs decisionmaking 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 Six steps in the decision making process 1 2 Recognize the need for a decision typically happens when there is environmental change Generate alternatives must develop a convenient alternative course of action If there are only a few come up with the decision could be poor Assess alternatives must look at the advantages and disadvantages of a decision Choose among alternatives rank the alternatives and make the best decision Implement alternative must act on the alternative decision made Learn from feedback compare the outcome to what was the expected outcome and see why this happened for future decisions Group decisionmaking 0 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 Decisionmaking becomes emotional instead of logical Improvind droup decisionmakind 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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