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by: Karen Padberg


Karen Padberg
Texas State
GPA 3.92

C. Heuring

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C. Heuring
Class Notes
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This 58 page Class Notes was uploaded by Karen Padberg on Wednesday September 23, 2015. The Class Notes belongs to MGT 3303 at Texas State University taught by C. Heuring in Fall. Since its upload, it has received 26 views. For similar materials see /class/212891/mgt-3303-texas-state-university in Business, management at Texas State University.

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Date Created: 09/23/15
Management Review Chap 1 Management Getting work done through others with Efficiency and effectiveness Functions 0 Planning Involves determining organizational goals and a means for achieving them 0 Organizing deciding where decisions will be made who will do what jobs and tasks 0 Leading Inspiring and motivating workers 0 Controlling monitoring progress and taking corrective action when progress isn t being made 9Meta analysis a study that estimates how well management theories work Kinds of managers 1 Top Managers chief officer CEOCOO are responsible for the overall direction of the organization a Creating context for change b Developing employees commitment or buyin c Create positive organizational culture d Monitoring their business environments 2 Middle Managers plant manger or regional manager a Responsible for setting objectives consistent with top management goals b Plan and allocate resources to meet objectives c Monitor and manage subunits who report to them d Implement changes or strategies generated by top managers 3 FirstLine Managers office manager or shit supervisor a Manage the performance of entry level employees b Encourage monitor and reward the performance of their workers c Teach entrylevel positions how to do their jobs d Make schedules and plans based on middle managers middle range planning 6 Looks 710 days ahead for hiring needs 4 Team Leaders Team contact or leader New position developed as companies shifted to selfmanaging teams a Facilitating team activities toward accomplishing a goal b Not responsible for team performance the team is c Help team members plan work and solve problems 3 Major Roles 1 2 3 4 Skills 1 539quot Interpersonal Roles a Figurehead greeting company visitors speaking at the opening ofa new facility or representing the company at a luncheon Fly s into opening ofnew facility Leader motivate and encourage workers to accomplish organizational objectives Walks into office with cash bonus in hand for employees Liaison dealing with people outside their units Goes on sales calls markets to potential customers Informational a Monitor scan environment for info contact others for info Reading WallStreet journal b Disseminator share info they have collected inside organization Managers sit down with employees to review pamphlet outlining goals c Spokesperson share information with people Outside the company CEO explaining decisions to public Decisional a Entrepreneur adapt themselves and units to change Leader institutes change to improving entire system Disturbance handler respond to pressures and problems so they demand immediate attention and action CEO tells employees to help out during hurricane Katrina Resource Allocator decides who will get what resources and how many of those they will get During recession managers made sure that they cut spending but not Research and Development Negotiator negotiate schedules projects goals outcomes and recourses Instead of paying a lawsuit manager negotiated allowing a settlement b Technical specialized procedures techniques and knowledge required to get the job done also needed to troubleshoot problems employees cant handle Most important for team leaders and lower level managers Human the ability to work well with others help encourage others to express their thoughts and feelings and are good listeners Important for all leaders Conceptual the ability to see the organization as a whole to understand how different parts of the company affect each other must be able to recognize understand and reconcile multiple complex problems Most important for top and middle managers Motivation to manage motivated to actually manage the work of others Important for all managers especially top managers 9Companies want managers with a balance of skills Ones who know their stuff Technical are equally comfortable working with blue collar and whitecollar employees Human Skills are able to assess the marketplace and position their companies for success Conceptual skills and they want to assume positions of leadership and power Motivation to manage Mistakes 9Arrivers managers who made it all the way up to the top of their companies 9Derailers managers who were successful at the start of their careers but who were knocked offthe fast track by the time they reached upper management These are the mistakes that these Derailers made Insensitive to others bullying managing style Cold arrogant being so expert treating others with contempt Betrayal of trust failing to admit when mistakes are made Taking credit treating people as though they don t matter Performance problems Over managing unable to build a team Unable to staff effectively Unable to think strategically Unable to adapt to a boss with a different managing style 10 Over dependent on advocator or mentor 9 N9 P H WNquot 0 Transition 9Becoming a manager produced a profound psychological transition that changed the way that these managers viewed themselves and others 0 Initial expectations 0 To be the boss 0 Have formal authority 0 Manage all tasks 0 Believed job wasn t managing people 0 After 6 Months 0 Concluded initial expectations were wrong 0 Found out managing is fast paced o Realized there was a heavy workload 0 Must be a problem solver and trouble shooter 0 After 1 year 0 Thought of themselves as managers and no longer quotdoerquot 0 Communication listening and positive reinforcement o Learned to adapt to situations and control stress 0 Realized their job was people development Advantages 9Wellmanaged companies 0 Sales revenue Stock market returns 0 Profits Employee satisfactionsCustomer satisfaction 9 Improving management means 0 Establishing goals results and schedules 0 Coaching and conducting annual appraisals o Rewarding employee performance 9Good management 1 Employment security Increase productivity without fear ofjob loss 2 Selective hiring recruit and hire the most talented people 3 Self managed teams produces increases in productivity 4 High wages contingent on organization s performance needed to attract and detain talented workers and indicate employee value 5 Training and skill development company dependent on people must invest in training and skill development ofits employees 6 Reduction of status differences company treats everyone no matter what the job as equal 7 Sharing information to promote the long run and health ofa company employees must be given information ie costs finances development times Chapter 2 Origins ofmanagem ent Sumerians 5000 BCE Record keeping controlling Egyptians 40002000 BCE Recognized the need for planning organizing and controlling when building pyramids Hammurabi 1800 BCE Controlling established controls by using witnesses Nebuchadnezzar 600 BCE Organizing and controlling wage incentives and production control Sun Tzu 500 BCE Planning amp Leading indentifying and attacking opponents weaknesses Xenophon 400 BCE Plan Lead Control Organize Recognized management as a separate art Cyrus 400 BCE Organize Lead Control Human relations and motion study Cato the elder 175 BCE Organize Job descriptions Diocletian 284 Organize Delegation of authority Alfarabi 900 Leading Listed leadership traits Ghazali 1100 Leading Listed managerial traits Barbarigo 1418 Organizing Different organizational Formsstructures Venetians 1436 Controlling Numbering standardization and interchangeability of hearts 0 Sir Thomas More 1500 Leading Critical of poor management 0 Machiavelli 15 25 Organizing Cohesiveness power and leadership in organizations Origins of management cont 9Pre Industrial No need for managers 1 Work in familieson farmsno commute a In 1870 twothirds of Americans earned living from agriculture 2 Skill laborers a Usually worked in shops by their homes 3 Self organized groups a Cottage workers worked with each other in small homes built in a semicircle 4 Unique small batches ofproduction 91ndustrial Need for managers 1 Work in factoriesCommute 2 Specialized but unskilled laborers running machines a Began to replace high paid skilled artisans 3 Large Factories a Instead ofbeing preformed in fields homes or small shops 4 Standardized mass production a Time rapidly dropped man hours Evolution ofmanagement ln 1881 Joseph Wharton gave the University ofPennsylvania 100000 to establish a department teaching management skills Scientific Managemen thoroughly studying and testing different work methods to identify the best most efficient way to complete a job 0 Indentify Most effective way quotOne best way 0 Indentify Most efficient way quotOne best wayquot Before quotseat of pants management 0 No standards which to judge performance 0 No follow up of productivity and quality 0 No standardization ofprocedures 21 Father ofscientific TAYLOR 1 Develop a science for each element ofa man s work a Avoid Soldering Soldering when a worker deliberately slow there pace or restricts their work output 2 Scientifically select then train teach and develop the worker a Incentives breaks shorter hours hire first class workers instead of playing favorites 3 Cooperate with employees to ensure that the scientific principals were actually implemented a Don t make managers the enemies as they were so often viewed No Rate busters Rate buster A group member whose work pace is significantly faster then the normal pace in his or her group 4 Divide the work and responsibility equally between managers and workers a Each worker should be taught daily and receive friendly help from those who are over him 9Taylor believed in a quotfair day s work what an average worker can produce at a reasonable pace day in and day out 22 Motion Studies Frank amp Lillian Gilbreth Frank and Lillian developed long term interest in using motion study to simplify work improve productivity and reduce the level of effort required to perform a job 9Time study timing how long it takes good workers to complete each part of their jobs Workers pay would increase or decrease depending on whether the worker exceeded or fell below the standards 9Motion study breaking each taskinto separate motions and then eliminating those that are unnecessary or repetitive 91ndustrial psychology LILLIAN Improving office communication incentive programs job satisfaction and management training Lead to laws in workplace safety and child lab or 23 Gantt Chart 9Visually indicates what tasks must be completed at which times in order to complete a project Various units in the X axis and tasks on the y axis Revolutionary in the detailed planning they provided to managers Unlike Taylor Gantt s task and bonus system did not punish workers for not achieving higher levels ofproduction workers who produced more received a bonus those who didn t simply received their standard pay The key was his system didn t punish workers as they took time to learn how to increase their production Production usually doubled with Gantts system 31 Bureaucratic and administrative management Monarchy Favoritism 0 Family members birthright tradition 9Bureaucracy the exercise of control on the basis of knowledge expertise or experience Rational Legal authority achieve goals efficiently 31 Elements of bureaucratic organizations Weber Qualification based hiring Meritbased promotion Chain of commands Division of labor Impartial application of rules and procedures Recorded in writing 7 Mangers separate from owners 9914935 32 Administrative management Fayol 9How and what manager should do in their jobs 4 Humans relations management 9Focus on people particularly the psychological and social aspects ofwork o Efficiency alone is not enough to produce organizational success 0 Organizational success also depends on treating workers well Constructive Con ict Follett 9Dealing with con ict 0 Domination an approach to dealing with con ict in which one party satisfies its desires and objectives at the expense of the other party s desires and objectives Easiest way for the moment but not successful in the long run 0 Compromise an approach to dealing with con ict in which both parties give up some of what they want in order to reach agreement on a plan to reduce or settle the con ict No one really wants to give up something 0 Integrative con ict resolution both parties indicate their preferences and then work together to find an alternative that meets the needs ofboth 9 Follett s 4 Principals of organizations Coordination as reciprocal relating all factors in a situation Coordination by direct contact of the responsible people concerned Coordination in the early stages Coordination as a continuing process 95k Hawthorne studies Mayo 0 Workers feelings and attitudes affected their work Financial incentives weren t the most important motivation to workers Group norms and behavior play a critical role in role ofbehavior at work Cohesive work unit lead to higher job satisfaction and productivity Workers not eXtensions of machines Cooperation and acceptance of authority Barnard 90rganization a system of consciously coordinated activates or forces of two or more persons 9Mangers can gain cooperation and acceptance of management s authority by 0 Securing essential services from individuals 0 Encourage workers to willingly cooperate with each other and management to achieve organization goals 0 Formulating an organizations purpose and objectives 0 If each objective is clear then each person in each job at each level of the company should understand how his or her daily activities behaviors and choices contribute to accomplishment of that purpose 0 Providing a system of communication 0 Managers must create an organizational structure with clear hierarchy and hire and promote the right people into management Operations management managing the daily production of goods and services 0 Quality control forecasting techniques capacity planning productivity measurement and improvement 0 Origins 0 Guns guns used to made by made with every piece needing attention to fitting the right way no two parts were the same Whitney standardized guns and created interchangeable parts 0 Geometry manufactures could not product a part unless they had seen it first hand Monge designed parts using 3D geometry making allowing manufacturers to create a product without seeing it first Fire a Detroit automaker facility burned down Thus they created a hand to mouth way of making cars by just keeping enough supplies on hand for a short production run alleviating the need for inventory storage 0 Information management 60000 Clay tablets and animal skins used for business and economic teXt 15001700 s Paper and printing press revolutionized the business use of information 1850 Typewriter used for daily publication Telegraph telephone time clocks computer internet Systems management 9System is a set ofinterrelated elements or parts that function as a whole Encourages managers to look for links between different parts of the company Subsystem smaller system which operates within the conteXt of a larger whole Closed systems systems that can sustain themselves without interacting with their environments Open system systems that can sustain themselves only by interacting with their environments on which they depend on for survival Synergy occurs when two or more subsystems working together can produce more then they can working apart 1 1 3 o Entropy the inevitable and steady deterioration ofa system 9The general environment consists of the economy and the technological socio cultural and political legal trends that indirectly effect organizations 9The specific environment Includes customers competitors suppliers industry regulation and advocacy group Contingency management 9Contingency approach there is no universal management theories the most effective management theory or idea depends on the kinds of problems or situations those managers or organizations are facing at a particular time o Harder then it looks students and workers often wrongly assume the a company s problems would be quickly solved 0 Managers need to look for key contingencies that differentiate today s situations or problems from yesterdays CHAPTER 3 External Environments all events and forces outside an organization with the potential to in uence or affect the decisions and performances of the organization Fo rces 1 Environmental change the rate at which a company s general and specific environments change a Goes though stable environment slow rate of change and a dynamic environment fast rate of change b Punctuated equilibrium theory i Equilibrium Long simple Stable ii Revolutionary Short dynamic change Environmental complexity the number and the intensity of external factors that affect organizations a Simple Little change or factors b Complex many factors Price cuts competition Resource Scarcity is the abundance or shortage of critical organizational resources a Scarcity in production resources type of resource Uncertainty extent to which managers can understand or predict which environmental changes and trends will affect their business Equot 539quot F 9When environmental change and complexity are at high levels and resource scarcity is high uncertainty is high 9When environmental change and complexity are at low levels and resource scarcity is small uncertainty is low External Environment 1 General environmentconsists of the economy and the technological socio cultural and political legal trends that indirectly affect all organizations 2 Specific environment Customers competitors suppliers industry regulations and advocacy groups unique to the firms industry that directly affect how a company does business General environment 4 components that indirectly affect all organizations 1 Economy a Growing Favorable and shrinking Growth difficult b Predicting future economic activity c Confidence indices show how confident actual managers are about future business growth 2 Technological a The knowledge tools and techniques used to transform inputs into outputs b Inputs i Raw materials ii Information c Outputs i Products ii Services 3 Sociocultural a Specific changes demographics how companies staff b General changes behavior beliefs affect demand for business 4 PoliticalZLegal a Legislations regulations court decisions b EX 25 or org sued for wrongful termination Specific environment 5 Components unique to an industry directly affect orgs 1 Customers a Reactive customer monitoring involves indentifying and addressing customer trends and problems after they occur i Responding to problems ii Listening to complaints b Proactive customer monitoring i Anticipating problems trends needs and issues 2 Competitors a Companies that sell similar products or services i Competitive analysis anticipating competitors moves and determining competitors strengths and weaknesses 3 Suppliers a Organizations that provide resources to other organizations i Material finance human informational b Supplier dependence the degree to which a company relies on that supplier the importance and the difficulty in finding it c Buyer dependence degree to which a supplier relies on a buyer d Opportunistic behavior transaction in which one party in the relationship benefits at the expense of the owner e Relationship behavior the establishment of mutually beneficial long term exchanges between buyers and suppliers 4 Industry Regulation a Responsible for creating and enforcing regulation to protect consumers workers and society 5 Advocacy groups a Groups of concerned citizens who band together to try and in uence the business practices of specific industries businesses and professions b Public communication approach that relies on voluntary participation of news media and the advertising industry i Frames issue as public ii Create controversy Changing environments Environmental scanning involves searching the environment for important events or issues that might affect an organization lnterpreting Environmental factors 0 Opportunities take advantage 0 Threats protect from further harm o Minimize threats 0 Turn opportunities into profits 9Cognitive maps summarize the perceived relationships between environmental factors and possible organizational actions Internal Environments 9Threats and events INSIDE an org that affect management employees and organization culture Creation and maintenance of organizational culture 0 Company founder creates organizational culture 0 Organizational stories stories told by members to make sense of events and changes and to emphasize culture 0 Organizational heroes people admired for their qualities and achievements 0 Success 0 Adaptability 0 Employee involvement 0 Company mission business purpose or reason for existing o Consistent organizational culture actively defines values beliefs and attitudes McDonald s once a year has executives work in its restaurants Change consistency means change is difficult o Exists on 3 levels 1 Behavioral addition having managers and employees perform a new behavior 2 Behavioral substitution having managers and employees perform a new behavior in place of another behavior 3 Visible artifacts change office layout design and dress and recipients of company benefits and perks CHAPTER 4 1 Ethics set ofmoral principals that define right or wrong for a person or group 9Workplace deviance is unethical behavior that violates organizational norms about right and wrong 9Degree or range of deviance 9Target of deviant behavior org or Indiv a Production deviance hurts the quality and quantity of work produced i Leaving early unexcused breaks working slowly b Property deviance aimed at company property or products i Stealing lying about hours worked accepting kickbacks c Political deviance to harm others in the company i Favoritism blaming coworkers gossip d Personal aggression hostile or verbal aggression towards others i Verbal abuse theft from coworkers sexual harassment 9Employee shrinkage employee theft of company merchandise Sentencing Guidelines 9Include all orgs punish a number of offenses and encourage org to be proactive o Punishment 0 Smaller fines for proactive companies 0 Smaller fines for organizations who voluntarily disclose 0 Steps 1 Fine base 2 Compute culpability score 3 Multiply COMPLIANCE PROGRAM STEPS 1 Establish standards and procedures 2 Assign upperlevel managers to be in charge 3 Delegate decision making to only to ethical employees 4 Encourage employees to report violations 5 Train employees on standards and procedures 6 Enforce standards consistently and fairly 7 Improve program after violations In uences on ethical decisionmaking I Ethical intensity degree of concern people have about and ethical issue a 5quot e f Magnitude of consequences total harm or benefit derived from an ethical decision Social consensus agreement on whether behavior is bad or good Probability of effect chance of something happening involving or hurting others Temporal immediacy time between an act and the consequences the act produces Proximity of effect the social physical cultural or psychological distance between a decision maker and those effected by his decisions Concentration of effect how much the act affects the average person II Moral development moral maturity a 9 Preconventional level people decide based on selfish reasons Stage 1 worry about yourself stage 2 worry about others Conventional level make decisions that conform to societal expectations look what others are doing Post conventional level use internalized ethical principals to solve ethical dilemmas society as a whole is better off III Ethical principals A F 5quot PP quot5 I Longterm selfinterest you should never take any action that is not in your or your organizations long term selfinterest Personal virtue holds that you should never do anything that isn t honest open and truthful Religious injunctions holds that you should never take an action that is unkind or that harms a sense of community Government requirem en ts never take action that violates the law Utilitarian bene ts you should never take an action that does not result in greater good for society Individual rights you should never take an action that infringes on others agreedupon rights Principle ofdistributivejustice you should never take any action that harms the least fortunate among us in some way ETHICAL DECISION MAKING 9 1 Select and hire ethical employees 0 Use Overt Integrity Tests directly estimate honesty by asking about punishment of unethical behavior 0 Use Personalitybased integrity Tests indirectly estimate psychological traits 0 Consider character different mental and ethical traits making up a person 92 Establish a code of ethics 0 Communicate ethics code inside and out the company 0 Company must develop practical ethical standards and procedures specific to a company s line of business 93 Conduct ethics training 0 Develop employees awareness of ethics 0 Achieve credibility with employees 0 Teach a practical model of ethical decision making 9 4 Create an ethical Climate 0 Established by managers who 0 Act ethically o Are active in company s ethic program 0 Whistle blowing report others ethics violations 0 Punish fairly and consistently those who violate the code of ethics Practical steps to ethical decisionmaking 1 Identify problem what makes it an ethical problem 2 Indentify the people involved who has been hurt 3 Diagnose the situation how did this happen 4 Analyze your options imagine range ofpossibilities 5 Make your choice what is your intention in making this decision 6 Act do what you have to do Social Responsibility To whom are organizations responsible 9Shareholder model the only social responsibility that businesses have is to maximize profits 0 Pros maximize shareholder wealth company stock increases in value maximize profits for shareholders o Cons Orgs cant act effectively as moral agents time money and attention diverted to social causes undermine market efficiency hurts customers and suppliers 9Stakeholder model management s most important responsibility is the firm s longterm survival 0 Primary stakeholder groups organizations depend on for its long term survival 0 Shareholders employees customers suppliers governments etc 0 Secondary stakeholder the media and special interests groups can be in uenced by the company 0 Media special interests groups trade associations Social Responsibilities 1 Legal to obey society s laws and regulations 2 Ethical not to violate accepted principals of right and wrong when conducting its business 3 Discretionary pertain to social roles that business play in society beyond their economic legal and ethical responsibilities Social responsiveness organizations strategy to respond to stakeholders economic legal ethical or discretionary expectations concerning social responsibility 1 Reactive strategy fight all the way withdrawal do less then society expects 2 Defensive strategy would admit responsibility but do the least required 3 Accommodative strategy will accept responsibility for a problem and take a progressive approach by doing all that could be expected 4 Proactive strategy leading industry anticipate problems before they occur 9Realities of social responsibility Can cost an organization Sometimes does pay Does not guarantee profitabilitysuccess May be the right thing to do though OOOO Review Chap 5 Planning choosing a goal or developing a method SMART goals specific measurable attainable Realistic Timely Goal Commitment the determination to achieve a goal Action plan lists the specific steps how steps who people what Resources when time for accomplishing a goal Goals 0 Proximal goals short term goals or subgoals o Distal goals longterm or primary goals Option based planning maintaining planning exibility by making small simultaneous investments in many alternative plans Slack resources a cushion or resources such as extra time people money or production capacity Learning based planning assumes that action plans need to be continually tested changed and improved as companies learn better ways of achieving goals Strategic plans make clear how the company will serve its customers and position itself against competitors in the next 2 to 5 years Purpose Statement statement ofthe company39s purpose or reason for existing Strategic objective flows from the purpose is a more specific goal that unifies companywide efforts stretches and challenges the organization and posses a finish line and time frame Management by Objective MBO is a four step process in which managers and their employees 1 Discuss their possible goals 2 Collectively select goals that are challenging and obtainable 3 Jointly develop tactical plans 4 Meet regularly to review progress towards goals Tactical plans specifies how a company will use its resources budgets and people to accomplish specific goals related to its strategic objective for the next 5 years Operational plans day to day plans for producing or delivering products and services over a 30 day to 6 month period SingleUse Plans deal with unique onetime only events Standing Plans plans used repeatedly to handle frequently recurring events 0 Policies a standing plan which indicates the general course of action that should be taken in response to a particular event or situation 0 Why exist what outcome is expected 0 Procedures standing plan that indicates the specific steps that should be taken in response to a particular event 0 More specific 0 Rules and regulationsstanding plan plans that describe how a particular action should be preformed 0 MOST specific What must happen or not happen Budgeting quantitative planning through which managers decide how to allocate available money to best accomplishes company goals Decision making is the process of choosing a solution from available alternatives Rational decisionmaking a systematic process of defining problems evaluating alternatives and choosing optimal solutions 1 Define the Problem a Problem which exists when there is a gap between a desired state and an existing state 2 Identify decision criteria a Decision criteria the standards used to guide judgments and decisions 3 Weight the criteria a Absolute comparisons which each decision criterion is compared to a standard or ranked on its own merits b Relative comparisons which each decision criterion is compared directly with every other criterion 4 Generate alternative courses of action 5 Evaluate each alternative 6 Compute the optimal decision Bounded rationality restricted in the real world by limited resources incomplete and imperfect information and managers limited decision making capabilities Pitfall Groupthin when group members feel intense pressure to agree with each other so that the group can approve a proposed solution Con ict C 1er con ict cognitive conflict focuses on the problem and issuerelated differences of opinion 0 lype con ic affective con ict refers to the emotional reaction that can occur when disagreements become personal rather than professional Devils Advocate when a person in the CType con ict is assigned to play the role of the critic Dialectical inguiry creates CType con ict by forcing decision makers to state the assumptions ofa proposed solution and then generate a solution that is opposite Nominal Group Technigue decision making method that begins and ends by having group members quietly write down and evaluate ideas to be shared with the group Delphi Technigue members ofa panel of experts respond to questions and to each other until reaching agreement on an issue Stepladder Technigue begins with discussion with two members who share their thoughts ideas and recommendations Group members are then added to a discussion one at a time at each step The existing group members take time to listen to and understand each new members thoughts and ideas then the group shares the ideas and the ones they have already discussed and come to a decision Brainstorming in which group members build on others39 ideas is a technique for generating a large number of alternative solutions 0 Electronic Brainstorming in which group members use computers to communicate and generate alternative solutions overcomes disadvantages with face to face brainstorming Disadvantages of brainstorming o Blocking when a group member must wait to share an idea because another group member is presenting an idea 0 Evaluation Apprehension fears ofwhat others will think of your idea Chapter 6 Competitive advantage providing greater value for customers than competitors can Sustainable competitive advantages when other companies cannot duplicate the value a firm is providing to its customers and for the moment other companies have stopped trying to duplicate Resources the assets capabilities processes employee time information and knowledge that an organization controls 1 Valuable resources allow companies to improve their efficiency and effectiveness 2 Rare resources resources that are not controlled or possessed by many competing firms which are necessary to sustain a competitive advantage Imitable resources resources that are impossible or extremely costly or difficult to duplicate 4 Nonsubstitutable resources no other resource can replace them and produce similar value or competitive advantage 0 Competitive Inertia reluctance to change strategies or competitive practices that have been successful in the past Strategic dissonance a discrepancy between a company39s intended strategy and the strategic actions managers take when actually implementing that strategy SWOT analysis strengths weaknesses opportunities and threats An assessment of the strengths and weaknesses in an organization internal environment and the opportunities and threats in an external environment 0 Internal environment 0 Distinctive competence something that a company can make do or perform better then its competitors 0 Core capabilities internal decision making routines problem solving process and organizational cultures that determine how efficiently inputs can be turned into outputs 0 External Environment 0 Environmental scanning specific threats and opportunities that can harm a companies competitive advantage 0 Strategic groups group of competitors within an industry which top managers use to compare evaluate and benchmark threats and opportunities I Core firms are the central companies in a strategic group I Secondary firms companies that use strategies similar but somewhat different from those of core firms I Transient Firms firms in the strategic group whose strategies are changing from one strategic position to another Shadowstrategy task force a committee within a company that analyzes the company39s own weaknesses to determine how competitors could exploit them for competitive advantage Strategic reference points strategic targets used by managers to determine ifthe organization has developed the core competencies it needs to achieve a sustainable competitive advantage Corporatelevel strategy is the overall organizational strategy that addresses the question What business or businesses are we in or should we be inquot 1 Portfolio strategy a corporate level strategy that minimizes risk by diversifying investment among various businesses or product lines a Diversification owning stocks in a variety of companies in different industries Related diversification creating or acquiring companies that share similar products manufacturing marketing technology or cultures Acquisition purchase of one company by another Unrelated diversification creating or acquiring companies in completely unrelated businesses G RD 6 BCG MatriX managers use to categorize a corporations businesses by growth rate and relative market share and helps managers decide how to invest corporate funds Star large share of fast growing markets 39 Question marks company with a small share ofa fast growing market iii Cash Cows a company with a large share ofa slow growing market iv Dog a company with a small share ofa slowgrowing market 2 Grand Strategy broad strategic plan used to help an organization achieve its strategic goals a Growth Strategy focuses on increasing profits revenues market share or the number of places in which the company does business b Stability strategy to continue what the company has been doing butjust to do it better c Retrenchment strategy to turn around very poor company performance by shrinking the size or scope of the business or if a company is in multiple businesses by closing or shutting down different lines ofbusiness d Recovery consists of the strategic actions that a company takes to return to a growth strategy Industrylevel strategy addresses the question how should we compete in this industryquot Five Industry forces H Character of rivalry a measure of the intensity of competitive behavior among companies in a industry Threat of new entrants measure of degree to which barriers to entry make it easy or difficult Threat of substitute products or services a measure of the ease with which customers can find substitute products or services the competition will be greater and profits will be lower Bargaining power of supplier a measure ofthe in uence that suppliers ofparts materials and services to firms in a industry have on the prices of these inputs Bargaining power of buyers a measure ofthe in uence that customers have on the firm39s prices N 0 4 U1 Positioning strategies 1 Cost leadership produce an acceptable product or service at consistently lower production costs then competitors 2 Differentiation providing a product or service so different from competitors that customers are willing to pay a premium 3 Focus strategy using cost leadership or differentiation to produce a specialized product or service Adaptive strategies 1 Defenders seek moderate steady growth by offering limited range or products and services to a willdefined set of customers 2 Prospectors seek fast growth by searching for new market opportunities takes risk and being the first to bring innovative new products to market 3 Analyzers half defenderprospector they seek moderate steady growth and limited opportunities for fast growth 4 Reactors do not follow a consistent strategy Firm level strategy addresses the question How should we compete against a particular firmquot 1 Direct competition rivalry between 2 companies offering similar products and services that acknowledge each other as rivals a Strategic moves i Attack a competitive move designed to reduce a rival39s market share ii Response competitive counter move prompted by a rival39s attack to defend or improve a company39s market share or profit 2 Market commonality degree to which companies have overlapping products services or customers in multiple markets 3 Resource similarity the extent to which a competitor has similar amounts and kinds of resources Entrepreneurship the process of entering new or establish markets with new goods or services Intrapreneurship entrepreneurship within an existing organization Entrepreneurial orientation the set of processes practices and decisionmaking activities that lead to new entry I Characterized by five dimensions 0 Risk taking 0 Autonomy o Innovativeness o Proactiveness 0 Competitive aggressiveness CHAPTER 7 Organizational innovation the successful implementation of creative ideas in organizations Organizational change a difference in the form quality or condition of an organization over time Technology cycle begins with the birth of new technology and ends when that technology reaches its limits and is replaced by newer and better technology SCurve pattern ofinnovation pattern of innovation characterized by slow initial progress then rapid progress and then slow progress again as a technology matures and reaches its limits Innovation streams patterns of innovation over time that can create sustainable competitive advantage Technological discontinuity phase ofthe stream which a scientific advance or unique combination of existing technologies creates a significant breakthrough in performance or function Discon tin uous change the phase characterized by technological substitution and design competition Technological substitution the purchase of new technologies to replace older ones Design competition competition between old and new technologies to establish a new technological standard or dominate design Dominant design a new technological design or process that becomes the accepted market standard Technological lockout occurs when a new dominant design prevents a company from competitively selling its products or makes it difficult to do so Incremental change a phase oftechnology cycle which the companies innovate by lowering costs and improving the functioning and performance of the dominate technological design Creative work environments workplace culture which workers perceive that new ideas are welcomed valued and encouraged Flow state of effortlessness which you become completely absorbed in what you39re doing and time passes quickly The experimental approach to innovation assumes a highly uncertain environment and uses intuition exible options and hands on experience to reduce uncertainty and accelerate learning and understanding 1 Design iteration is a cycle of repetition in which a company tests prototype of a new product or service improves the design then tests and builds it 2 Testing systematic comparison of different product designs or 3 4 design iterations Milestones formal project review points used to assess progress and performance Multifunctional teams are work teams composed of people from different departments Compression approach to innovation assumes that incremental innovation can be planned using a series of steps and that compressing those steps can speed innovation Generational change incremental improvements to dominate technological design Organizational decline occurs when companies don39t anticipate or recognize the internal or external pressures that threaten their survival Managing change I Changeforceslead to differences in form quality or condition of an organization over time I Resistance forces support the existing state of conditions in organizations Resistance to change is caused by selfinterest misunderstanding and distrust and a general intolerance for change I Unfreezing getting people affected by change to believe that change is needed I Change intervention process used to get workers and managers to change their behavior and work practices I Refreezing supporting and reinforcing the new changes so that they stick Coercion the use of formal power and authority to force others to change Change tools and techniques Results driven change change created quickly by focusing on the measurement and improvement of results General electric workout threeday meeting in which managers and employees from different levels and parts of an organization quickly generate and act on solutions to specific business problems Transition management team TMTl a team of8 to 12 people whose fulltime job is to manage and coordinate a company39s change process Organizational development a philosophy and collection of planned change interventions designed to improve an organizations longterm health and performance Change agent the person formally in charge ofguiding a change effort Chapter 8 Global business the buying and selling ofgoods and services by people from different countries Multinational corporations corporations that own businesses in two or more countries Direct foreign Investment occurs when a company builds a new business or buys and existing business in a foreign country Trade barriers governmentimposed regulations that increase the cost and restrict the number ofimported goods Protectionl39sm a government39s use oftrade barriers to shield domestic companies and their workers from foreign competition Tariff a direct tax on imported goods Nontariffbarriers is nontaX methods of increasing the cost or reducing the volume ofimported goods Quotas limit on the number or volume imported Voluntary export restrain ts limit the amount of product that can be imported annually Government import standards standards to protect the health and safety of citizens but in reality often used to restrict imports Subsidies government loans grants and tax deferments given to domestic companies to protect them from foreign competition Customs classi cation assigned to imported products by government officials that affects the sixe ofthe tariff and imposition of import quotas Trade agreements General agreement on tariffs and trade GATTl a worldwide trade agreement that reduced and eliminated tariffs limited government subsidies and established protections for intellectual property World Trade Organization WTO successor to GATT the only international organization dealing with the global rules of trade between nations Regional trading zones areas in which tariff and nontariffbarriers on trade between countries are reduced or eliminated Maastricht Treaty ofEurope a regional trade agreement between most European countries North American Free Trade Agreement a regional trade agreement between Canada Mexico and the United States CentraIAmerica Free Trade Agreement regional trade agreement between Costa Rica Dominican Republic El Salvador Guatemala Honduras Nicaragua and the United States Association ofSoutheastAsian Nations AsiaPacific Economic Cooperation How to go global Global Consistency when a multinational company has offices plants in different nations they run them all using the same rules and policies Local adaptation modifying rules guidelines and procedures to adapt to differences in foreign customers governments etc Forms of global business 1 Exporting selling domestically produced products to customers in foreign countries 2 Cooperative contact an agreement in which a foreign business owner pays a company fee for the right to conduct that business in his or her country a Licensing an agreement in which a domestic company the licensor receives royalty payments for allowing another company the licensee to produce the licensor39s product sell its service or use its brand name in a foreign market Franchise a collection of networked firms in which the manufacturer or marketer of a product or service the franchisor licenses the entire business to another person or organization the franchisee 3 Strategic alliancesan agreement in which companies combine key resources costs risk technology and people 0quot a joint Ven ture when two existing companies collaborate to form a third company 4 Wholly owned affiliates foreign offices facilities and manufacturing plants that are 100 percent owned by the parent company 5 Global new ventures new companies that are founded with an active global strategy and have sales employees and financing in different companies Finding the best business climate Growing markets Purchasing power the relative cost of a standard set of goods and services in different countries Choosing an officemanufacturing location 1 Qualitative factors a Work for quality b Company strategy 2 Quantitative factors a Kind of facility b Tariffnontariffbarriers c Exchange rates d Transportationlabor costs Minimizing political risk I Political uncertainty risks of major change in political regimes that can result in war revolution death of political leaders or social unrest I Policy uncertainty risk associated with the changes in law and government polices that directly affect the way foreign companies conduct business Cultural Differences National culture set of shared values and beliefs that affect the perceptions decisions and behavior ofthe people from a particular country Cultural dimensions Hofstede Power distance I Uncertainty avoidance I Masculinity and femininity I Individualism I Longshort term orientation Expatriate person who livesworks outside his or her native country Exam Review FINAL Chap 1318 Chap 13 Motivation set of forces that initiates directs and makes people persist in their efforts to accomplish a goal Needs the physical or psychological requirements that must be met to ensure survival and wellbeing Extrinsic rewards tangible and visible to others and are given to employees contingent on the performance of specific tasks Intrinsic rewards the natural rewards associated with performing a task or activity for its own sake Equity theory states that people will be motivated at work when they perceive that they are being treated fairly 0 Inputs contributions employees make to the organization 0 Outcomes what employees receive in exchange for their contributions to the organization 0 Referents are others with whom people compare themselves to determine ifthey have been treated fairly OutcomeZInput OZI Ratio employee39s perception of how the rewards received from the organization compare with the employees contributions to that organization 9Under reward occurs when you are getting fewer outcomes relative to inputs compared to your coworkers Over reward occurs when you are getting more outcomes to inputs then your coworkers Distributive justice the degree to which outcomes and rewards are fairly distributed or allocated Procedural justice the fairness ofthe procedures used to reward allocation decisions Expectancy theory people will be motivated to the extent to which they believe that their efforts will lead to good performance which will lead to good rewards Valence the attractiveness or desirability ofvarious rewards or outcomes Expectancy the relationship between effort and performance Instrumentality the relationship between perceived performance and rewards Reinforcement theory says that behavior is a function of its consequences that behaviors followed by positive consequences will occur more frequently then those behaviors followed by negative consequences will occur less frequently 9Reinforcement process of changing behavior by changing consequences that follow behavior 9Reinforcement contingencies the cause and effect relationships between the performance of specific behaviors and specific consequences schedule of reinforcement the set of rules regarding reinforcement contingencies such as which behaviors will be reinforced which consequences will follow and the schedule by which the consequences will be delivered 0 Positive reinforcement strengthens behavior by following behaviors with desirable consequences 0 Negative reinforcement strengthens behavior by withholding an unpleasant consequence when employees perform a specific behavior 0 Punishment weakens behavior by following it when undesirable consequences 0 Extinction is a strategy where positive consequence is no longer allowed to follow a previously reinforced behavior 9Continuous reinforcement schedules a consequence follows every instance of a behavior lntermittent reinforcement schedules consequences are delivered after a specified or average time has elapsed or after a specified or average number ofbehaviors have occurred 0 Fixed interval reinforcement schedules consequence follows a behavior only after a fixed time has elapsed 0 Variable interval reinforcement schedules consequences follow a behavior after different times some shorter some longer that vary around a specified average time Fixed ratio reinforcement schedules consequences are delivered following a specific number ofbehaviors Variable ratio reinforcement schedules consequences are delivered following a different number of behaviors GoalSetting Theory people will be motivated to the extent to which they accept specific challenging goals and receive feedback that indicates their progress toward goal achievement Goal specificity the extent to which goals are detailed exact and unambiguous Goal difficulty is the extent to which a goal is hard or challenging Goal acceptance the extent to which people consciously understand and agree to goals Performance feedback is the information about the quality or quantity of past performance and indicates whether progress is being made toward the accomplishment CHAPTER 14 Leadership is the process ofinfluencing others to achieve group or organizational goals Leadership structures are subordinate task or organizational characteristics that make leaders redundant or unnecessary Leadership neutralizers are subordinate task or organizational characteristics that can interfere with a leader39s actions or make it impossible for a leader to in uence followers performance 0 Trait theory Says that effective leaders possess a similar set of traits or characteristics Behaviors Initiating structure is the degree to which a leader structures the roles of followers by setting goals giving directions setting deadlines and assigning tasks 0 Consideration is the extent to which a leader is friendly approachable and supportive and shows concern for employees Leadership style the way a leader generally behaves toward followers Contingency theory a leadership theory that states that in order to maximize work group performance leaders must be matched to the situation that best fits their leadership style Situational favorableness the degree to which a particular situation either permits or denies a leader the chance to in uence the behavior of group members 0 Leadermember relations how well the follower respects trust and like their leaders 0 Task structure the degree to which the requirements ofa sub ordinate39s tasks are clearly specified Position power the degree to which leaders are able to hire fire reward and punish workers PathGoal theory states that leaders can increase subordinate satisfaction and performance by clarifying and clearing the paths to goals and by increasing the number and kinds of rewards available for goal obtainment styles Equot Directive leadership involves letting employees know precisely what is expected ofthem giving them specific guidelines for performing tasks scheduling work setting standards of performance and making sure people follow these standards Supportive leadership involves being approachable and friendly to employees showing concern for them and their welfare treating them as equals and creating a friendly climate 3 Participative leadership involves consulting employees for their suggestions and input before making decisions 4 Achievementoriented leadership setting challenging goals having high expectations of employees and displaying confidence that employees will put forth high effort N situational theory leaders need to adjust their leadership styles to match follower39s readiness o Worker readiness the ability and willingness to take responsibility for directing one39s behavior at work 9Normative decision theory helps leaders decide how much employee participation should be used when making decisions 1 Strategic leadership the ability to anticipate envision maintain flexibility think strategically and work with others to initiate changes that will create a positive future Visionary leadership creates a positive image ofthe future that motivates organizational members and provides direction for future planning and goal setting 3 Charismatic leadership the behavioral tendencies and personal characteristics of leaders that create an exceptionally strong relationship between them and their followers a Ethical charismatic39s provide developmental opportunities for followers and are open for positive and negative feedback Unethical charismatic39s control and manipulate followers do what is best for themselves instead oftheir organizations want to hear only positive feedback and share info beneficial to themselves 4 Transformational leadership generates awareness and acceptance of a group39s purpose and mission and gets employees N Oquot to see beyond their own needs and selfinterests for the good of the group 5 Transactional leadership based on an exchange process which followers are rewarded for good performance and punished for poor performance CHAPTER 15 9Perceptual filters the personality psychology or experienced based differences that in uence people to ignore or pay attention to particular stimuli Selective perception tendency to notice and accept objects and information consistent with our values beliefs and expectations while ignoring or screening out inconsistent information 0 Closure fill gaps where information is missing Attribution theory we have all the basic needs to understand and explain the cause of other people39s behaviors o Defensive bias the tendency for people to perceive themselves as personally and situationallly similar to someone who is having difficulty or trouble 0 Fundamental attribution error the tendency to ignore external causes ofbehavior and to attribute other people39s actions to internal causes 0 Selfserving bias the tendency to overestimate our value by attributing success to ourselves and failures to others 9Communication o Decoding the process by which the receiver translates the written verbal or symbolic form ofthe message into an understood message Feedback to sender a return message to the sender that indicates the receiver39s understanding ofthe message Noise anything that interferes with the transmission of the intended message argon vocabulary particular to a profession or group that interferes with communication in the workplace Conduit metaphor the mistaken assumption that senders can send messages directly into the heads of receivers with perfect clarity and without noise interfering Formal communication channel the system of official channels that carry organizationally approved messages and information 1 Downward communication flows from higher to lower levels in an organization 2 Upward communication ows from lower levels to higher levels in an organization 3 Horizontal communication flows among managers and workers who are at the same organizational level Informal communication channels grapevine transmission of messages from employee to employee outside of formal communication channels One on One communication 0 Coaching communicating with someone for the direct purpose of improving the person39s onthejob performance or behavior 0 Counseling communicating with someone about nonjobrelated issues such as stress childcare health issues or legal issues which effect performance 9NonVerbal communication any communication that does not involve words 0 Kinesics movements ofthe body and face 0 Paralanguage includes the pitch rate tone volume and speaking pattern use of silence pauses or hesitations of ones voice 9Listening 0 Hearing the act or process ofperceiving sounds 0 Listening making a conscious effort to hear 0 Active listening means assuming half the responsibility for successful communication by actively giving the speaker nonjudgmental feedback that shows you39ve accurately heard 0 Empathetic listening understanding the speaker39s perspective and personal frame of reference and giving feedback that conveys that understanding to the speaker 9Giving Feedback 0 Destructive feedback disapproving without any intention of being helpful and almost always causes a negative or defensive reaction in the recipient o Constructive feedback intended to be helpful corrective andor encouraging Crosscultural communication involves transmitting information from a person in one country or culture to a person from another country or culture 0 Affective cultures tend to display their emotions and feelings openly when communicating 0 Neutral cultures do not display their emotions and feelings openly 0 Address terms cultural norms that establish whether you address businesspeople by their first names family names or titles 0 Monochromic cultures cultures where people tend to do one thing at a time and view time as linear o Polychronic cultures people tend to do more than one thing at a time and view time as circular meaning that time is a combination ofthe past present and future Schedule time the time by which scheduled projects or jobs should actually be completed Discussion time concerns how much time should be spent in discussion with others Acguaintance time how much time you spend getting to know the person before they are prepared to do business with you 91mproving transmission 0 Online discussion forums use web or softwarebased discussion tools to allow employees across the company to easily ask questions o Televisedvideotaped speeches and meetings speeches and meetings originally made to a small audience that are broadcast to different places 91mproving reception 0 Organizational silence when employees withhold information 0 Company hotlines phone numbers anyone in the company can call anonymously to leave information for upper management 0 Survey feedback info collected by survey from organization members and then are compiled disseminated and used to develop action plans for improvement CHAPTER 16 9Control regulatory process of establishing standards to achieve organizational goals comparing actual performance against the standards and taking corrective action when necessary standards basis of comparison for measuring the extent to which organizational performance is satisfactory or unsatisfactory 0 Benchmarking the process of determining how well other companies perform business functions or tasks Cybernetic process of steering or keeping course 9Control 0 Feedback control a mechanism for gathering information about performance deficiencies AFTER they occur 0 Concurrent control a mechanism for gathering information about performance deficiencies AS they occur 0 Feed forward control a mechanism for monitoring performance inputs rather then outputs to prevent or minimize performance deficiencies before they occur Control loss occurs when behavior and work procedures do not conform to standards 0 Regulation costs the cost associated with implementing or maintaining control 0 Cybernetic feasibility the extent to which is possible to implement each step in the control process 9Control methods 1 Bureaucratic control the use of hierarchical authority to in uence employee behavior by rewarding or punishing employees for compliance or noncompliance Objective control the use of observable measures ofworker behavior or outputs to assess performance and in uence behavior a Output control measures the results of their efforts 3 Normative control the regulation of workers39 behavior and decisions through widely shared organizational values and beliefs N 4 Concertive control the regulation of workers39 behaviors and decisions through work group values and beliefs 5 Selfcontrol a control system in which managers and workers control their own behavior by setting their own goals monitoring their own progress and rewarding themselves for goal achievement Balanced scorecard measurement of organizational performance in four equally important areas finances customers internal operations and innovation and learning 0 Sub optimization performance improvement in one part of the organization but only at the expense of decreased performance in another part 9Financial Perspective 0 Cash ow analysis predicts how changes in business will affect its ability to take in more cash then it pays out 0 Balance sheets accounting statements that provide a snapshot of a company39s financial position at a particular time 0 Income statements show what has happened to a company39s income Financial ratios calculations typically used to track a business39s cash efficiency and profitability over time compared to other businesses in its industry 0 Budgets used to project costs and revenues prioritize and control spending and ensure that expenses don39t exceed available funds and revenues 0 Economic value added EVA the amount by which company profits exceed the cost of capital in a given year Customer defections a performance assessment in which companies identify which customers are leaving and measure the rate at which they are leaving CHAPTER 17 Moore39s Law the prediction that ab out every two years computer processing power would double and its cost would drop by 50 percent 0 Raw data facts and figures 0 Information useful data that can in uence people39s choices and behavior 9First mover advantage the strategic advantage that companies earn by being the first to use new information technology to substantially lower costs or make a product or service different from that of competitors 9Costs 0 Acquisition costs the cost of obtaining data that you don39t have 0 Processing costs the cost ofturning raw data into useable information 0 Storage costs the cost of physically or electronically archiving information for later use and retrieval 0 Retrieval costs the cost of accessing alreadystored and processed information 0 Communication costs cost of transmitting information from one place to another 9Capturing Information 0 Bar codes represent numerical data by varying the thickness and pattern of vertical bars 0 Radio frequency identification FRID tags contain minuscule microchips and antennas that transmit information via radio waves 0 Electronic scanners convert printed text and pictures into digital 1mages Optical character recognition the ability of software to convert digitized documents into ASCII text that can be searched read and edited by word processing software 9Processing Information transforming raw data into meaningful information that can be applied to business decision making Data mining the process of discovering patterns and relationships in large amounts of data Data warehouse stores huge amounts of data that have been prepared for data mining analysis by being cleaned of errors or redundancy Supervised data mining the process when the user tells the data mining software to look and test for specific patterns and relationships in data set Unsupervised data mining the process when the user simply tells the data mining software to uncover whatever patterns and relationships it can find in a data set Association or affinity patterns when two or more database elements tend to occur together in a significant way Seguence patterns when two or more database elements occur together in a significant pattern but one ofthe elements precedes the other Predictive patterns patterns that help identify database elements that are different Data clusters when three or more database elements occur together in a significant way 9Protecting information the process of ensuring that data are reliably and consistently retrievable in a usable format for authorized users only Authentication making sure users are who they claim to be Authorization granting authenticated users approved access to data software and systems Twofactor authentication authentication based on what users know such as a password and a secure ID card Biometrics fingerprint recognition or iris scanning users are identified by unique measurable body features o Firewalls a protective hardware or software device that sits between the computers in an internal organizational network and outside networks such as the internet 0 Virus a program or piece of code that without your knowledge attaches itselfto other programs on your computer and can trigger anything from harmless ashing message to the reformatting of your hard drive to a systemwide network shutdown 0 Data inscription transform data into complex scrambled digital codes that can be unencrypted only by authorized users who possess the unique decryption keys 0 Virtual private networks VPNs software that securely encrypts data sent by employees outside the company network decrypts data when they arrive within the company network and does the same when data are sent back to employees outside the network 0 Secure sockets laver SSLl encrvntion internet browserbased encryption that provides secure offsite web access to some data and programs lnternet Access and Sharing 0 Executive information system EIS uses internal and external data source to provide the information needed to monitor and analyze organizational performance Intranets private company networks that allow employees to easily access share and publish information using internet software 0 Corporate portals a hybrid of executive information systems and intranets 9External Access and sharing 0 Electronic Data interchange ED when two companies convert their purchase and ordering information to a standardized format to enable the direct electronic transmission ofthat information from one company39s computer system to the other company39s computer system 0 Web Services used protocols to describe data from one company so that it can automatically be read understood and processed in another company39s system o Extranet networks that allow companies to exchange information and conduct transactions with outsiders by providing them direct webbased access to authorized parts ofa company39s intranet or information system sharing knowledge and expertise Decision support system DSS a information system that helps managers understand specific kinds ofproblems and possible solutions and analyze the impact of different decision options using what if scenarios 0 Expert systems an information system that contains the specialized knowledge and decision rules used by experts and experienced decision makers so that nonexperts can draw on this knowledge base to make decisions CHAPTER 18 Productivity Outputs over Inputs 9Kinds Of Productivity I Partial Productivity indicates how much ofa particular kind of input it takes to product an output I Multifactor productivity an overall measure ofperformance that indicates how much labor capital materials and energy it takes to produce an output lnternational Organization Standard 0 50 9000 a series offive international standards from ISO 9000 ISO 9004 for achieving consistency in quality management and quality assurance in companies throughout the world 0 50 14000 a series of international standards for managing monitoring and minimizing an organizations harmful effects on the environment 9TQM o otal quality management TQM a integrated principalbased organizationWide strategy for improving product and service quality 0 Customer focus an organizational goal to concentrate on meeting customers39 needs at all levels ofthe organization 0 Customer satisfaction an organizational goal to provide products or services that meet or exceed customers39 expectations 0 Continuous improvemen an organization39s ongoing commitment to constantly assess and improve the processes and procedures used to create products and services 0 Variation a deviation in the form condition or appearance of a product from the quality standard for that product Service recovery restoring customer satisfaction to strongly dissatisfied customers 9Processing o Madet0 order operations a manufacturing operation that does not start processing or assembling products until a customer order is received 0 Assembletoorder a manufacturing operation that divides manufacturing processes into separate parts or modules that are combined to create semicustomized products 0 MaketoStock a manufacturing operation that orders parts and assembles standardized products before receiving customer orders 9Flexibility of Manufacturing Operations 0 Manufacturing exibility the degree to which operations can easily amp quickly change the number kind and characteristics of products they produce 0 Continuous ow productions produces goods at a continuous rather than a discrete rate 0 Line ow productions process that are preestablished occur in a serial or linear manner and are dedicated to making one type of product 0 Batch production operation that produces goods in large batches in standard lot sizes 0 ob shops manufacturing operations that handle custom orders or small batch jobs 0 Project manufacturing operation designed to produce large expensive specialized products like custom homes lnventory amt and number of raw materials parts and finished products a company has in its possession Types 0 Raw material inventories the basic inputs in a process 0 Componentparts inventories the basic parts used in manufacturing that are fabricated from raw materials 0 WorkInProgress inventories partially finished goods consisting of assembled component parts Finishedgoods inventories the final outputs of manufacturing operations 9Measuring Inventory 0 Average aggregate inventory average overall inventory during a particular time period 0 Stockout the point when a company runs out of finished product 0 Inventory Turnover the number of times per year that a company sells or turns overquot its average inventory 9Cost of Maintaining Inventory 1 Ordering costs the costs associated with ordering inventory including data entry phone calls obtaining bids correcting mistakes and determine when and how much to order II Setup costs the costs of downtime and lost efficiency that occur when a machine is changed or adjusted to produce a different kind ofinventory III Holding costs the cost of keeping inventory until it is used or sold including tax storage costs insurance obsolescence and opportunity costs IV Stockout Costs the costs incurred when a company runs out of a product 9Managing Inventory 0 Economic order quantity EOQ a system of formulas that minimizes ordering and holding costs and helps determine how much and how often inventory should be ordered ustInTime IT inventory an inventory system in which component parts arrive from suppliers just as they are needed at each stage ofproduction Kanban a ticketbased JIT system that indicates when to reorder inventory Materials reguirement planning MRPl a production and inventory system that determines the production schedule production batch sizes and inventory needed to complete final products Independent demand systems an inventory system in which the level of one kind ofinventory does not depend on another Dependent demand systems an inventory system in which the level ofinventory depends on the number of finished units to be produced CHAPTER 9 Organizational Structure the vertical and horizontal configuration of departments authority and jobs within a company Organizational Process a collection of activities that transform inputs into outputs that customer s value Departmentalization is a method of subdividing work and workers into separate organizational units that take responsibility for completing particular tasks 0 Functional Departmentalization separate units responsible for particular business functions or areas of expertise 0 Product Departmentalization separate units responsible for producing particular products or services 0 Customer Departmentalization separate units responsible for particular kinds of customers 0 Geographic Departmentalization separate units responsible for doing business in particular geographic areas 0 Matrix Departmentalization hybrid structure in which two or more forms of departmentalization are used together 0 Simple matrix managers negotiate con icts and resources 0 Complex matrix mangers report to matrix managers who help them sort out the problem Organizational Authority give commands take action and make decisions to achieve organizational objectives 0 Chain of command the vertical line of authority that clarifies who reports to whom 0 Unity of command workers report to one boss Line authority the right to command immediate subordinates in the chain of command Staff authority right to advise but not command Line Function is an activity that contributes directly to creating or selling the company s products Staff Function activity that does not contribute directly to creating or selling the company products 9Delegation of authorityassignment of direct authority and responsibility to a subordinate to complete tasks 9Centralization of authority location ofmost authority at the upper levels of the organization 0 Decentralization location ofa significant amount of authority in the lower levels of the organization 0 Standardization solving problems by consistently applying the same rules procedures and processes lob Design the number kind and variety of tasks that individual workers perform in doing their jobs Job specialization a job is composed ofa small part ofa larger task Iob rotation moving workers from one specialized job to another Iob enlargement increased number of tasks that a worker performs Iob enrichment increasing number of tasks and giving workers authority and control to make meaningful decisions 0 Internal Motivation comes from the job itself and not the rewards ob characteristics model formulate jobs in ways that motivate workers and lead to positive work outcomes 0 Core job Characteristics 0 Skill variety number of different activities preformed 0 Task Identity the degree to which a job requires the completion ofa whole and identifiable piece of work Task significance degree of the substantial impact of the job on others or the organization Autonomy degree which gives workers the freedom and independence to decided how an when to accomplish the job Feedback the amount of information the job provides to workers ab out their work performance 0 O O Mechanistic organizations characterized by specialized jobs responsibilities defined and unchanging roles and a rigid chain of command Organic organizations broadly defined jobs and responsibility which is loosely defined frequently changing roles and decentralized authority Intraorganizational process collection of activities that take place within an organization to transform inputs into outputs 9Reengineering rethinking and radical redesign ofbusiness processes Works by changing Task Interdependence the eXtent to which a collective action is required to complete an entire piece ofwork 93 Kinds 1 Pooled Interdependence each job or department contributes to a whole 2 Sequential Interdependence work completed in succession one groups outputs become another s inputs Reciprocal Interdependence work completed by different jobs working together in a back and forth manner 539quot Empowering Workers permanently passing decisionmaking authority and responsibility from managers to workers Behavioral Informality workplace defined by routine regimen and specific rules Behavioral Formality workplace defined by spontaneity casualness 1 Open office systems try to increase interaction by removing physical barriers that separate workers 2 Shared spaces areas used by and open to all employees 3 Private spaces private offices with doors used by or open to just one person Intraorganizational Process collection of activities that take place among companies to transform inputs into outputs 1 Modular organizations organization that outsources noncore business activities to outside companies Virtual organizations organization that is part of a network in which many companies share skills costs capabilities markets and customers Equot CHAPTER 10 Work teams small number of people with complementary skills who hold themselves mutually accountable Cross Training team members are taught how to do all or most of the jobs performed by the other team members Social Loafing occurs when workers withhold their efforts and fail to perform share of the work Autonomy degree to which workers have the discretion freedom and independence to decide how and when to accomplish tasks 1 Traditional work groups two or more people work together to achieve a shared goal 2 Employee Involvement teams team that provides advice or makes suggestions to management concerning specific issues 3 Semiautonomous work groups provide advice and suggestions but also have the authority to make decisions and solve problems related to major tasks 4 Selfmanaging teams team members manage and control ALL of the major tasks 5 Selfdesigning teams control all the major tasks and also change the design of the teams themselves 6 Crossfunctional teams composed of employees from different areas 7 Virtual teamsteam composed of geographically or organizationally dispersed coworkers who use telecommunication and information technologies to accomplish tasks Project teams created to complete specific onetime projects or tasks within a limited time 9 Team Characteristics 1 Normsinformally agreed on standards that regulate team behavior 2 Cohesiveness extent to which team members are attracted to a team and motivated to remain in it Stages of team development Forming initial stage where teams meet each other 0 Storming 2 101 stage where teams disagree over what teams should do and how they should do it Norming 3ml stage where team members settle in their roles Performing 4 stage performance improves because the team has matured Denorming team performance begins to decline as the size scope goal or members of the team change 0 Destorming teams comfort level decreases team cohesion weakens and emotions are o Deforming team members try and control avoid each other and isolate themselves from team leaders Structural accommodation giving teams the ability to change organizational structures policies and practices Bureaucratic immunity ability to make changes without first getting approval from mangers Individualismcollectivism degree to which you believe people should be self sufficient and that loyalty to ones self is more important them the teams 0 Team level average level of ability experience personality or any other factor on a team 0 Team Diversity represents the differences in ability experience personality or any other factor on a team 0 Interpersonal skills listening communicating questioning and providing feedback enable people to have effective working relationships with others Team Compensation 0 Skillbased pay programs pay employees for learning additional skills or knowledge 0 Gain sharing companies share the financial value ofperformance gains such as productivity cost saving or quality with their workers CHAPTER 11 Human Resource Management the process of finding developing and keeping the right people to form a qualified work force Human Resource Planning process of using an organizations goals and strategy to forecast its human resource needs Work force forecasting process ofpredicting the number and kind of workers with specific skills and abilities that an organization will need in the future 0 Human resource systems computerized system for gathering analyzing storing and disseminating information related to the HRM process Bona fide occupational gualification BFng permits sex age and religion and like to be used when making employment decisions but only if they are quotreasonably necessary to the normal operation of that particular business 0 Disparate treatment intentional discrimination when hiring or promoting a person Adverse impact unintentional discrimination Fourfifths rule rule used when the selection rate for a protected group is less then 80 percent 0 Quid pro quo sexual harassment hiring firing or promotion depends on whether an individual submits to sexual harassment o Hostile work environment form of sexual harassment in which unwelcome and demeaning sexually related behavior creates an intimidating and offensive work environment 9 Finding qualified workers Recruiting developing a pool of qualified job applicants 0 Internal recruiting developing a pool ofpossible candidates from people who already workin the company 0 External recruiting developing a pool of candidates from outside the company ob analysis a process for collecting information on the important workrelated aspects ofa job ob description a written description ofbasic tasks duties and responsibilities required of an employee holding a particular job Selection process of gathering information aboutjob applicants to decide who should be offered a job Validation determining how well a selection test or procedure predicts future job performance 0 Employment references sources such as previous employers or coworkers 0 Background checks used to verify truthfulness and accuracy ofinformation that applicants provide about themselves Selection tests 1 Specific ability test measures the extent to which an applicant possesses the particular kind of ability needed to do a job well 2 Cognitive ability tests measures to the extent to which applicants have the abilities in perceptual speed verbal comprehension numerical aptitude general reasoning and spatial aptitude 3 Bio data extensive surveys that ask applicants questions about their personal backgrounds and life experiences 4 Personality tests measure the extent to which applicants posses different kinds ofjobrelated personality dimensions 5 Work sample tests require applicants to perform tasks that are actually done on the job 6 Assessment centers series ofjobspecific simulations that are graded by multiple trained observers to determine applicants ability to perform managerial work Interviews company reps ask job related questions to determine whether they are qualified for the position 0 Unstructured interviews interviewers are free to ask anything they want 0 Structured interviews questions are prepared ahead of time so all the applicants are asked the same questions Training means providing opportunities for employees to develop jobspecific skills experience and knowledge they need to do their jobs Needs assessment identifying and prioritizing the learning needs of employees Performance appraisal assessing how well the employees are doing their jobs Objective performance are easily and directly accounted for Subjective performance require that someone judge or assess a worker s performance Behavior Observation scale BOS rating scales that indicate the frequency with which workers perform specific behaviors that represent their job dimensions critical to success Rater training training performance raters in how to avoid rating errors and increase rating accuracy 360degree feedback performance is obtained from all the employees 9Compensation ob evaluation determines the worth of each job by determining the market value of the knowledge skills and requirements needed to perform it o Piecework employees are paid a set rate for each item they produce 0 Commission employees earn a percentage of each sale they make 0 Profit sharing company pays a percentage of their profits to the employees on top of there regular compensation 0 Employee stock ownership plans company awards shares of their stock in addition to regular compensation 0 Stock options gives the employees the option to purchase stock at a set pr1ce 9 Benefits Employment benefits any kind of compensation paid to employees in addition to their regular wage o Cafeteria Benefit Plans allows employees to choose which benefits they receive Employee separation loss of an employee for any reason Wrongful discharge legal doctrine requiring employers to have a jobrelated reason to terminate employees Downsizing planned elimination ofjobs Outplacement services provide counseling for employees faced with downsizing Early Retirement Incentive Program offer financial benefits to employees to encourage them to retire early 0 Phased retirement employee transitions to retirement by working less hours over a period of time before completely retiring Employee turnover loss of employee who voluntarily choose to leave the company 0 Functional turnover loss ofpoor performing employees who choose to leave the organization 0 Dysfunctional turnover loss of high performers who choose to leave is a costly loss to the organization CHAPTER 12 Diversity a variety of demographic culture and personal differences 0 Surfacelevel diversity differences such as age sex and race that are unchangeable 0 Age discrimination treating differently because of age 0 Sex discrimination treating differently because of seX Glass ceiling invisible barrier which prevents women and minorities from advancing to top level jobs 0 o Deeplevel diversity differences such as personality and attitudes that are communicated through verbal and nonverbal behaviors Social integration degree to which group members are psychologically attracted to working with each other Affirmative action steps taken by an organization to create employment opportunities for minorities and women 5 Dimensions of Personality 1 Extraversion degree to which someone is active assertive sociable talkative and energized by others 2 Emotional stability degree to which someone is not angry depressed anxious emotional insecure or excitable 3 Agreeableness degree to which someone is cooperative polite exible forgiving goodnatured tolerant and trusting Conscientiousness degree to which someone is organized hardworking responsible preserving thorough and achievement oriented 5 Openness to experience degree to which someone is curious broadminded and open to new ideas things and experiences is spontaneous and has a high tolerance for ambiguity 5 Authoritarianism the extent to which an individual believes there should be power and status differences within an organization Machiavellian the extent to which individuals believe that virtually any type of behavior is acceptable in trying to satisfy their needs or meet their goals Type AZB personality dimension the extent to which people tend toward impatience hurriedness competitiveness and hostility 0 Type A try to complete as many task as possible in the shortest possible time and are hard driving competitive impatient perfectionist angry and unable to relax 0 Type B easygoing patient and able to relax and engage in leisure activities Locus of control the degree to which people believe their actions in uence what happens to them 0 Internal locus of control the belief that what happens to you is largely under your control 0 External locus of control the belief that what happens to you is primarily due to factors beyond your control factors such as luck chance or powerful people Affectivity the stable tendency to experience positive or negative moods and to react to things in a generally positive or negative way 0 Positive Affectivity consistently notice and focus on the positive aspects of themselves and their environments 0 Negative Affectivity consistently notice and focus on the negative in themselves and their environments 0 Mood Linkage a phenomenon in which one worker s bad moods can spread to others Organizational plurality work environment where 1 All members are empowered to contribute in a way that benefits all 2 The individuality of each member is respected by people not segmented Diversity and Awareness practices Awareness Training designed to raise employee awareness of diversity issues and to challenge the underlying stereotypes SkillsBased Diversity Training training which teaches employees the practical skills they need for managing a diverse workforce such as exibility and adaptability Diversity Audits formal assessments that measure employee and management attitudes investigate the extent in which people are advantaged and disadvantaged in hiring and review company s diversityrelated policies Diversity Pairing mentoring program in which people of different backgrounds races and sexes are paired together to get to know each other and change stereotypical beliefs and attitudes


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