New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Principles of Management

by: Clementina Hoeger

Principles of Management MGMT 3610

Clementina Hoeger
GPA 3.58

Daniel Morrell

Almost Ready


These notes were just uploaded, and will be ready to view shortly.

Purchase these notes here, or revisit this page.

Either way, we'll remind you when they're ready :)

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

Daniel Morrell
Class Notes
25 ?




Popular in Course

Popular in Business, management

This 28 page Class Notes was uploaded by Clementina Hoeger on Wednesday September 23, 2015. The Class Notes belongs to MGMT 3610 at Middle Tennessee State University taught by Daniel Morrell in Fall. Since its upload, it has received 11 views. For similar materials see /class/212929/mgmt-3610-middle-tennessee-state-university in Business, management at Middle Tennessee State University.


Reviews for Principles of Management


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 09/23/15
Chapter 14 Management Exam III Review What is human resource management a Human Resource Management HRM i The set of organizational activities directed at attracting developing and maintaining an effective work force b The Strategic Importance of HRM i HRM is increasingly important as firms realize the value of their human capital in improving productivity ii HRM is critical to bottomline performance of the firm iii HR planning is now part of the strategic planning process What are some ofthe laws that regulate how employers treat employees and applicants a Title VIII ofthe Civil Rights Act of 1964 i Forbids discrimination in the employment relationship ii Employers are not required to seek out and hire minorities but they must treat fairly all who apply Adverse Impact 1 When minority group members pass a selection standard at a rate less than 80 of the rate of the majority group b Age In Act of 1967 i Outlaws discrimination against persons older than 40 years of age c quot 39 with quot39 39 quot39 39 Act of 1990 ADA i Forbids discrimination on the basis of disabilities and requires employers to provide reasonable accommodations for disabled employees d Familv and Medical Leave Act of 1993 iFMLA i Requires employers to provide up to 12 weeks of unpaid leave for family and medical emergencies ii ZERO WEEKS or PAID LEAVEZERO e Occupational Safety and Health Act of 1970 OSHA Requires that employers 1 Provide a place of employment that is free from hazards that may cause death or serious physical harm 2 Obey the safety and health standards established by Occupational Safety and Health Administration OSHA Bona Fide Occupational Qualification BFOQ i Hiring a specific type of person is reasonably necessary for the normal operation r of the enterprise 1 Ex Hiring a man for the position of men s locker room attendant g Equal Employment Opportunity i Equal Employment Opportunity Commission 1 Federal agency charged with enforcing Title VII as well as several other employmentrelated laws ii Affirmative Action 1 Intentionally seeking and hiring qualified or qualifiable employees from racial sexual and ethnic groups that are underrepresented in the organization 2 Several executive orders require federal contractors to develop affirmative action plans and take affirmative action in hiring veterans and the disabled h Pregnancy Discrimination Act Specifically outlaws discrimination on the basis of pregnancy Civil Rights Act of 1991 i Amended the original Civil Rights Act making it easier to bring discrimination lawsuits while also limiting punitive damages that can be awarded in those lawsuits j Fair Labor Standards Act of 1938 FLSA 39 Sets a minimum wage and requires overtime pay for work in excess of 40 hours per week for nonexempt employees Salaried professional executive and administrative employees are exempt from the Act s minimum wage and overtime provisions Equal Pay Act of 1963 i Requires men and women to be paid the same amount for doing the same jobs 5 exceptions are permitted for seniority and merit pay Employee Retirement Income Security Act of 1974 ERISA i Sets standards for pension plan management and provides federal insurance if pension plans go bankrupt National Labor Relations Act of 1935 Wagner Act i Set up procedures for employees to vote whether to have a union if the vote is 3 for a union management is required to bargain collectively with the union ii National Labor Relations Board NLRB the federal agency empowered to enforce provisions of the NLRA 3 Emerging Legal Issues i Sexual harassment ii Alcohol and drug dependence Protected under ADA iii AIDS Often protected under ADA Ill What is employment at will a Employment at Will 39 A traditional view of the workplace in which an organization can fire an employee for any or no reason The new argument an organization should be able to fire only people who are poor performers or who violate rules iquot Recent court cases have placed limits on an organization s ability to terminate employees by requiring just cause for firing or dismissal as part of an organizationwide cutbacks IV What is human resource planning a Starting point in attracting qualified human resources is planning Planning Involves job analysis and forecasting the demand and supply of labor i Job analysis 1 A systemized procedure for collecting and recording information about jobs within an organization ii Forecasting human resource demand and supply 1 Basically it is what it says V 2Typesofquot quot quot39 a andquot39 39 a a Recruiting i The process of attracting qualified persons to apply forjobs that are open b Internal Recruiting 39 Considering present employees as candidates for openings Advantage promotion from within can help build morale and reduce turnover of highquality employees iquot Disadvantage internal recruiting can create a llripple effect of having to successively fi vacated positions c External Recruiting i Attracting persons from outside the organization ii Realistic Job Preview RJP is considered a successful method to ensure person job fit happens before you get the job V What is a contingent worker i A contingent worker is a person who works for an organization on something other than a permanent or full time basis ii An increasing trend is to use more temporary workers without the risk that the organization may have to eliminate theirjobs Chapter 15 I What are the components of a psychological contract a The Psychological Contract i The overall set of expectations held by an individual with respect to what he or she will contribute to the organization and what the organization will provide in return ii Contributions What the ind iii lnducements What the organization provides to the individual idual provides to the organization Cuntrlhmlnns 4mm lnducemenls om the lndlvldual he Orgammmn Elton Ablliy Jobsecw m Loyalty Bene Skills Cameroppnnunilies me mus Campemncies Promotion cppunun39 ie iv ll What are the Big Five personality factors a The Big Five Personality Traits Agreeableness a person s ability to get along with others Cons ntiousness the extent to which a person is responsible dependable persistent and achievement oriented Negative emotionality the extent to which a person is calm resilient and secure iv Extraversion a person s comfort level with relationships v Openness a person s ri Ill What are locus of control authoritarianism Machiavellianism selfefficacy selfesteem amp risk propensity a Locus of Control The extent to which people believe that their behavior has a real effect on what ity of beliefs and range of interests happens to them Internal locus of control individuals who believe they are in control of their lIves External locus of control ndividuals believe that external forces dictate what happen to them b SelfiEfficacy A person s belief about his or her capabil efficacy indi iduals believe they can perform well while low selfiefficacy ies to perform a task High self indi iduals doubt their ability to perform task spe c SelfEsteem SE i The degree to which people like or dislike themselves ii High SEs 1 Believe in themselves and expect success 2 Take more risks and use unconventional approaches 3 Are more satisfied with theirjobs than Low SEs iii Low SEs 1 Are more susceptible to external influences 2 Depend on positive evaluations from others 3 Are more prone to conform than high SEs d Authoritarianism i The extent to which an individual believes that power and status differences are appropriate within hierarchal social systems like organizations e Machiavellianism i Behavior directed at gaining power and controlling the behavior of others f Risk Propensity i The willingness to take risks 1 High risktakers take less time and require less information than low risktakers when making a decision Organizational effectiveness is maximized when the risktaking propensity of a manager is aligned with the specific demands of the job assigned to the manager IV What is emotional Intelligence a Emotional lntelli ence El i An assortment of noncognitive skills capabilities and competencies that influence a person s ability to succeed in coping with environmental demands and pressures ii Dimensions of El 1 Selfawareness knowing what you re feeling 2 Selfmanagement managing emotions and impulses 3 Selfmotivation persisting despite setbacks and failures 4 Empathy sensing how others are feeling 5 Social skills handling the emotions of others V What are some work related attitudes a Attitudes i Complexes of beliefs and feelings that people have about specific ideas situations or other people b AttitudinalComponents i Affective component 1 Feelings and emotions toward a situation ie how we feel 2 Ex ll don t like myjob ii Cognitive component 1 Perceived knowledge ie why we feel the way we feel 2 Ex quotI think that myjob pays well iii Intentionalcomponent 1 Expected behavior in a given situation iewhat we intend do about the situation 2 Ex quotI will stay home from worktoday VI Whatis cogni ve dissonance Cognitive Dissonance 1 The conflict individuals experience amongtheir own attitudes 2 The affective and cognitive components ofthe individual39s attitude are in conflict with intended behavior Chapter 16 I Whatis motivation a Motivation i The set of forces that cause people to behave in certain ways ii The goal of managers is to maximize desired behaviors and minimize undesirable behaviors b The Importance of Motivation in the Workplace i Determinants of Individual Performance 1 Motivation the desire to do the job 2 m the capability to do the job 3 Work environment the resources to do the job ll How does Maslow s hierarchy of needs work a b The Need Hierarchy Approach i Maslow s Hierarchy of Needs 1 Physiological basic survival and biological function 2 Securit a safe physical and emotional environment 3 Belongingness love and affection 4 Esteem positive selfimageselfrespect and recognition and respect from others U39I Selfactualization realizing one s potential for personal growth and development Ill What is selfefficacy How does it relate to motivation a An individual s belief about his or her abilities to perform a task The higher the self efficacy the higher the motivation because that person believes they can do well on a certain task IV What is equity theory What are some ways to reduce inequity a Eguity Theory i People are motivated to seek social equity in the rewards they receive for performance 1 Equity is an individual s belief that the treatment he or she receives is fair relative to the treatment received by others ii Individuals view the value of rewards outcomes and inputs of effort as ratios and make subjective comparisons of themselves to other people iii Ways to reduce inequities 1 Distort own or others ratios 2 lnduce others to change their own inputs or outcomes 3 Change own inputs increase or decrease efforts or outcomes seek greater rewards 4 Choose a different comparison referent other person systems or self 5 Quit their job iv Employees are concerned with both the absolute and relative nature of organizational rewards V What is expectancy theory a Expectancy Theory i Motivation depends on how much we want something and how likely we are to get it b Elements of Expectancy Theory i Effort toPerformance Expectancy 1 The employee s perception of the probability that effort will lead to a high level of performance ii PerformancetoOutcome Expectancy 1 The employee s perception of the probability that performance will lead to a specific outcome the consequence or reward for behaviors in an organizational setting iii Valence 1 An index of how much an individual values a particular outcome 2 It is the attractiveness of the outcome to the individual a Attractive outcomes have positive valences and unattractive outcomes have negative valences b Outcomes to which an individual is indifferent have zero valences iv For motivated behavior to occur 1 Both efforttoperformance expectancy and performancetooutcome expectancy probabilities must be greater than zero 2 The sum of the valences must be greater than zero What are 4 different kinds of reinforcement in organizations a Kinds of Reinforcement in Organizations i Positive reinforcement 1 Strengthens behavior with rewards or positive outcomes after a desired V behavior is performed ii Avoidance 1 Strengthens behavior by avoiding unpleasant consequences that would result if the behavior is not performed iii Punishment 1 Weakens undesired behavior by using negative outcomes or unpleasant consequences when the behavior is performed iv Extinction 1 Weakens undesired behavior by simply ignoring or not reinforcing that behavior VII Why do empowerment and participation work to increase motivation a Empowerment and Participation i Empowerment 1 Enabling workers to set their own work goals make decisions and solve problems within their sphere of influence ii Participation 1 Giving employees a voice in making decisions about their work iii Areas of participation for employees 1 Making decisions about their jobs 2 Decisions about administrative matters eg work schedules 3 Participating in decision making about broader issues of product quality Chapter 17 I What is leadership a Leadership is the process of influencing a group towards the achievement of goals ll What is the difference between a Manager and a Leader a Managers i Are appointed to their position ii Can influence people only to the extent of the formal authority of their position iii Do not necessarily have the skills and capabilities to be leaders b Leaders i Are appointed or emerge from within a work group ii Can influence other people and have managerial authority iii Do not necessarily have the skills and capabilities to be managers Ill What are the different sources of leader power a Managing Power i Legitimate power 1 The power a leader has as a result of his or her position ii Coercive power 1 The power a leader has to punish or control iii Reward power 1 The power to give positive benefits or rewards iv Mpower 1 The influence a leader can exert as a result of his or her expertise skills or knowledge v Referent power 1 The power of a leader that arises because of a person s desirable resources or admired personal traits IV What are some ofthe characteristics of charismatic leaders a Charismatic Leadership Charisma an interpersonal attraction that inspires support and acceptance is an individual characteristic of a leader Charismatic persons are more successful than noncharismatic persons Charismatic leaders are 1 Selfconfident 2 Have a firm conviction in their belief and ideals 3 Possess a strong need to influence people iv Charismatic leaders in organizations must be able to Envision the future set high expectations and model behaviors consistent with expectations 2 Energize others through a demonstration of excitement personal confidence and patterns of success 3 Enable others by supportingthem by empathizingwith them and by expressing confidence in them V What are the two dimensions of the leadership grid and how do they relate to one another a ManagerialGrid i Appraises leadership styles usingtwo dimensions 1 Concern for people a Human aspects of leader behavior 2 Concern for production a Job and task aspects of leader behavior ii Places managerial styles in five categories VI What are some substitutes for leadership What is it meant by quotsubstitute for leadership a Substitutes for Leadership i A concept that identifies situations in which leader behavior is neutralized or replaced by characteristics of subordinates the task and the organization b Examples of substitutes for leadership Characteristics thatisub39stitute for Leadership Subordinate l Task l l Organization Ability Experience Need forindependenge Professional orientation In diffe ance towards organizational goals VII What is the difference between a transformational leader and a transactional leader a Transformational Leadership i Leadership that goes beyond ordinary expectations by transmitting a sense of mission stimulating learning and inspiring new ways of thinking ii Seven keys to successful leadership Trusting in one s subordinates Developing a vision Keeping cool Encouraging risk Being an expert 05 wa Inviting dissent l Simplifying things b Transactional Leadership i Leaders who guide or motivate their followers in the direction of established goals by clarifying role and task requirements VIII What is impression management a Impression Management i Is all about managing how you re seen or perceived by others 1 Ex You make yourself look like a l good worker but you really aren t IX What is the goal of Vroom s Decision Tree approach to leadership a Vroom Decision Tree Approach i Attempts to prescribe a leadership style appropriate to a given situation ii Basic Premises 1 Subordinate participation in decision making depends on the characteristics of the situation 2 No one decisionmaking process is best for all situations 3 After evaluating problem attributes a leader can choose a path on the decision trees that determines the decision style and specifies the amount of employee participation a Decision significance b Decision Timeliness Chapter 19 I What is the difference between a group and a team a Group a Two or more people who interact regularly to accomplish a common purpose or goal b M a A group of workers who function as a unit often with little or no supervision to carry out workrelated tasks functions and activities b Sometimes called selfmanaged teams crossfunctional teams or high performance teams What are some popular types of groups in organizations a Types of Groups and Teams 1 Functional groups 2 Informal or interest groups 3 Task groups 4 Ex Pruidem Pyolezr manager T r r T T T 1 T T T T T Funmonalgmup c inmrmalgmup Crossrmnmnnal 2am mm aftask mum VI Why do people join groups a The purpose of a group or team may range from preparing a new advertising campaign to informally sharing information to making important decisions to fulfilling social needs What are the 4 stages of team development and what happens in each stage a Forming a Members join and begin the process of defining the group s purpose structure and leadership b Storming a Intragroup conflict occurs as individuals resist control by the group and disagree over leadership c Norming a Close relationships develop as the group becomes cohesive and establishes its norms for acceptable behavior d Performing a A fully functional group structure allows the group to focus on performing the task at hand What is a role a RLle a The part an individual plays in helping the group reach its goals 1 Taskspecialist role 2 Socioemotional role b Role Structures a The set of defined roles and interrelationships among those roles that the group or team members define and accept 1 Emerge as a result of role episodes in which the expected role is translated and defined into the enacted role ls conflict good or bad What is optimal a The Nature of Conflict a Conflict 1 A disagreement between two or more individuals groups or organizations 2 There is an optimal level of conflict in an organization a Too little conflict and the organization becomes complacent and apathetic and lacking in innovation and underperforms b Too much conflict creates a dysfunctional organization where hostility and noncooperation predominate and suffers from low performance c A moderate level ofconflict in an organization fosters motivation creativity innovation and initiative and can raise performance Management Exam II Review I What is the difference between a plan and a goal a b Goal what you want to achieve Plan how you will attain the goal ll Steps in the goal setting process Ill Characteristics of well designed goals a Written in terms of outcomes not actions i Focuses on the ends not the means b Measurable and quantifiable i Specifically defines how the outcome is to be measured and how much is expected c Clear as to time frame i How long before measuring accomplishment d Challenging yet attainable i Low goals do not motivate ii High goals motivate if they can be achieved e Written down i Focuses defines and makes goal visible f Committed to all i Puts everybody llon the same page IV What are the different levels of goals plans and how are they used a Mission Statement E Mission organization s reason for existing ii Mission Statement 1 Broadly states the basic business scope and operations that distinguishes it from similar types of organizations N May include the market and customers 0 Some may describe company values product quality attitudes toward employee b Strategic Goals and Plans i Strategic Goals 1 Where the organization wants to be in the future 2 Pertain to the organization as a whole ii Strategic Plans iii Action Steps used to attain strategic goals 1 Blueprint that defines the organizational activities and resource allocations 2 Tends to be long term c Tactical Goals and Plans i Tactical Goals 1 Apply to middle management 2 Goals that define the outcomes that major divisions and departments must achieve i Tactical Plans 1 Plans designed to help execute major plans 2 Shorter than time frame than strategic plans d Operational Goals and Plans i Operational Goals 1 Specific measurable results 2 Expected from departments work groups and individuals ii Operational Plans 1 Organization s lower levels that specify action steps toward achieving operational goals 2 Tool for daily and weekly operations 3 Schedules are an important component 4 Types ofOperational Plans a SingleUse Plan i Not likely to be repeated in the future 1 Program Large set of activities 2 Project Less scope and complexity b Standing Plan i For activities that recur regularly 1 Policy Specifies general organizational response to a specific situation 2 Standard Operating Procedures Steps to be followed 3 Rules and regulations Takes the place of decisionmaking and sets boundaries V MBO Process a Management By Objectives MBO i Specific performance goals are jointly determined by employees and managers ii Progress toward accomplishing goals is periodically reviewed iii Rewards are allocated on the basis of progress towards the goals iv Key elements of MBO Goal specificity participative decision making an explicit performanceevaluation period feedback Chapter8 I What is the strategic management process External Analysis Opponulmles Treats SWOTAnalysis quotquotP39emem Evaluate ImemalAnalysis Strengths Weaknesses ll What is the company s distinctive core competence a Distinctive Competence Core Competence i Something that an organization does exceptionally well Ill What is SWOT What do the letters mean a Strengths i OrganizationalStrengths 1 Are skills amp abilities enablingan firm to conceive amp implement strategies Common organizational strengths 1 Are organizational capabilities possessed by numerous competing firms Distinctive Competencies 1 Are useful for competitive advantage and superior performance iv Imitation of distinctive competencies 1 Is duplicating anotherfirm s distinctive competence v Sustained competitive advantage 1 occurs when a distinctive competence cannot be easily duplicated 2 is what remains after all attempts at strategic imitations have ceased VI Strategic imitation is difficult when 1 Distinctive competence is based on unique historical circumstances 2 Competitors do not understand the nature of a firm s competence 3 The competence is based on a complex phenomenon such as organizational culture Slmtegies Results b Weaknesses i Organizationalweaknesses 1 Skills and capabilities that do not enable an organization to choose and implement strategies that support its mission ii Weaknesses can be overcome by 1 investments to obtain the strengths needed 2 modification of the organization s mission so it can be accomplished with the current workforce iii Competitive disadvantage 1 A situation in which an organization fails to implement strategies being implemented by competitors c Opportunities i Organizationalopportunities 1 Areas in the organization s environment that may generate high performance d Threats i Organizationalthreats 1 Are areas in the organization s environment that make it difficult for the organization to achieve high performance IV When do you perform a SWOT a SWOT analysis is one of the most important steps in formulating strategy Using the organization s mission as a context managers assess internal strengths distinctive competencies and weaknesses as well as external opportunities and threats the goal is then to develop good strategies that exploit opportunities and strengths neutralize threats and avoid weaknesses V What do the 4 squares of the BCG matrix represent What is it used for a BCG Matrix i A method of evaluating businesses relative to the growth rate of their market and the organization s share of the market ii The matrix classifies the types of businesses that a diversified organization can engage as 1 quot gsquot have small market shares and no growth prospects 2 llCash cows have large shares of mature markets 3 llQuestion marks have small market shares in quickly growing markets 4 quotStarsquot have large shares of rapidly growing markets What are the three different generic strategies Porter When is each one used a Porter s Generic Strategies V i Differentiation strategy 1 An organization seeks to distinguish itself from competitors through the quality of its products or services ii Overall cost leadership strategy 1 An organization attempts to gain competitive advantage by reducing its costs below the costs of competing firms iii Focus strategy 1 An organization concentrates on a specific regional market product line or group of buyers b Implementing Porter s Generic Strategies i Differentiation 1 Marketing and sales must emphasize highquality highvalue image of the organization s products or services ii Overall Cost Leadership 1 Marketing and sales focus on simple product attributes and how these product attributes meet customer needs in a lowcost and effective manner iii Focus 1 Either differentiation or cost leadership depending on which one is the proper basis for competing in or for a specific market segment product category or group buyers VII What are some different corporatelevel strategies related and types of diversification a Corporate Level Strategies i Strategic Business Units 1 Each business or group of businesses within an organization is engaged in serving the same markets customers or products ii Diversification 1 The number of businesses an organization is engaged in and the extent to which these businesses are related to one another b Diversification i Becoming a Diversified Firm 1 Internal development of new products a Developing products and services within the boundaries of traditional business operations ii Replacement of suppliers and customers 1 Backward vertical integration a Beginning a business that furnishes resources previously handled by a supplier 2 Forward vertical integration a Beginning a business previously handled by an intermediary and selling more directly to customers c Corporate Level Strategies i SingleProduct Strategy 1 An organization manufactures one product or service and sells it in a single geographic market ii Related Diversification 1 A strategy in which an organization operates in several different businesses industries or markets that are somehow linked 2 Avoids the disadvantages and risks of a singleproduct strategy d Related Diversification i Advantages of Related Diversification 1 Reduces an organization s dependence on any one of its business activities and thus reduces economic risk 2 Reduces overhead costs associated with managing any one business through economies of scale and economies of scope 3 Allows an organization to exploit its strengths and capabilities in more than one business 4 Synergy exists among a set of businesses when the businesses value together is greater than their economic value separately e Unrelated Diversification i An organization operates multiple businesses that are not logically associated with one another ii Advantages 1 Stable of performance over time due to business cycle differences among the multiple businesses 2 Allocation of resources to areas with the highest return potentials to maximize corporate performance iii Disadvantages 1 Poor performance due to the complexity of managing a diversity of businesses 2 Failing to exploit key synergies puts the firm at a competitive disadvantage to firms with related diversification strategies Chapter 9 I What is decision making i Making a choice from two or more alternatives b The DecisionMaking Process 39 Identifying a problem and decision criteria and allocating weights to the criteria Developing analyzing and selecting the best alternative that can resolve the problem iquot Implementing the selected alternative i lt Evaluating the decision s effectiveness ll What are the two types of decisions and how are they used a Programmed Decisions i A decision that is a fairly structured decision or recurs with some frequency or both b Nonprogrammed Decisions i A decision that is relatively unstructured and occurs much less often a programmed decision Describe the conditions that make decisions different a Decision Making Under certainty i The decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative b Decision Making Underrii i The availability of each alternative and its potential payoffs and costs are all associated with risks c Decision Making Under uncertainty i The decision maker does not know all the alternatives the risks associated with each or the consequences of each alternative Describe the classical versus administrative decision making models a Classical Model of Decision Making i Assumptions 1 Decision maker operates to accomplish goals that are known and agreed upon 2 Decision maker strives for condition of certainty gathers complete information 3 Criteria for evaluating alternatives are known 4 Decision maker is rational and uses logic ii Narrative describes how a manager should and provides guidelines for reaching an ideal decision b Administrative Model of Decision Making i Two concepts are instrumental in shaping the administrative model 1 Bounded Rationality people have limits or boundaries on how rational they can be 2 Satisficing means that decision makers choose the first solution alternative that satisfies minimal decision criteria c Administrative Model i Decision goals often are Egg conflicting and lack consensus among managers ii Rational procedures are not always used iii Managers searches for alternatives are limited iv Managers settle for a satisficing rather than a maximizing solution v Descriptive how managers actually make decisionsnot how they should 6 Steps in the Decision Making Process a Recognizing and defining the decision situation i Some stimulus indicates that a decision must be made The stimulus may be positive or negative 1 Ex a plant manager sees that employee turnover has increased by 5 percent VI Chapter 10 b Identifying alternatives i Both obvious and creative alternatives are desired In general the more important decision the more alternatives should be generated 1 Ex The plant manager can increase wages increase benefits or change hiring standards c Evaluating alternatives i Each alternative is evaluated to determine its feasibility its satisfactoriness and its consequences 1 Ex Increasing benefits may not be feasible Increasing wages and changing hiring standards may satisfy all conditions d Selecting the best alternative i Consider all factors and choose the alternative that bests fits the manager s situation 1 Ex Changing hiring standards will take an extended period of time to cut turnover so increase wages e Implementing the chosen alternative i The chosen alternative is implemented into the organizational system 1 Ex The plant manager may need permission from corporate headquarters The human resource department establishes a new wage structure f Follow up and evaluating the results i At some time in the future the manager should ascertain the extent to which the alternative chosen in step 4 and implemented in step 5 has worked 1 Ex The plant manager notes that six months later turnover dropped to its previous level How do different models for group decision making differ Drawbacks of groups a Interacting Group i Open discussion argument and agreement Delm Group i Solicits input from a panel of experts who contribute anonymously b c Nominal Group i Structured technique used to generate innovative and creative ideas d Group Disadvantage i Groupthink situation that occurs when there is a high desire for consensus and cohesiveness What is an entrepreneur a Entrepreneurship i The process of planning organizing operating and assuming the risk of a business b Entrepreneur i Someone who engages in entrepreneurship c Small Business i A business that is privately owned by one individual or a small group of individuals it has sales and assets that are not large enough to influence its environment ll Six personality traits ofan entrepreneur a lnternal locus of control b Tolerance for ambiguity c Awareness of passing time d Selfconfidence e Need to achieve f High energy level III Tactics to start a business a Small Business Strategy i Emphasizing Distinctive Competencies 1 Identifying Niches in Established Markets a A segment of a market not currently being exploited in an established market where several large firms compete b A niche offers a competitive advantage to small businesses 2 Identifying new markets a Using the transfer of existing productservice to explore a new market b Creating new industriesproductsservices 3 FirstMover Advantage a Exploiting an opportunity before any other firm does IV What is a business plan a Document specifying the business details prepared by an entrepreneur prior to opening a new business 39 Clear vision Realistic financial projections iquot Target market iv Industry and competitors v Management team vi Critical risks that could threaten success vii Sources amp uses of startup funds amp operating funds V Different Legal forms of a small business a 3 Basic Legal Forms 1 Sole Proprietorship unincorporated business owned by an individual for profit 2 Partnership unincorporated business owned by two or more people 3 Corporation artificial entity created by the state and existing apart from its owners VI What is a franchise Advantages and disadvantages a Franchising Agreement i Operation of a franchise business by the entrepreneur the franchisee under a license by a parent company the franchiser ii The entrepreneur pays the parent company for use of trademarks products formulas and business plans b Advantages i Reduced financial risk of new business success through experience provided by franchiser ii Training financial and management support by franchiser c Disadvantages i Startup E to purchase franchise ii Limitations of franchise market area product customers iii Loss of independence due to imposed operational controls of franchiser Vll Debt vs Equity Financing a Debt Financing money to be repaid at a later date b EJuity Financing funds invested in exchange for ownership in the company Chapter 11 I What is work specialization Benefits and drawbacks Alternatives a Job Specialization Division of Labor b The degree to which the overall task of the organization is broken down and divided into smaller component parts c Benefits of Specialization i Workers can become proficient at a task ii Transfer time between tasks is decreased iii Specialized equipment can be more easily developed iv Employee replacement becomes easier d Limitations of Specialization i Employee boredom and dissatisfaction with mundane tasks ii Anticipated benefits do not always occur e Alternatives to Specialization i Job Rotation 1 Systematically moving employees from one job to another in an attempt to reduce employee boredom ii Job Enlargement 1 An increase in the total number of tasks workers perform iii Job Enrichment 1 Increasing both the number of tasks the worker does and the control the worker has over the job II What are some different types of departmentalization a Grouping Jobs i Departmentalization 1 The process of grouping jobs according to some logical arrangement ii Common Methods 1 Functional 2 Product 3 Customer 4 Location b FunctionalDepartmentalization i Grouping jobs involving the same or similar activities Plant Manager l l l Marl er Manager Manager Manager M nager Engineering Accounting Manufacturing Human Resources Purchasing ii Advantages 1 Each department can be staffed by functional area experts 2 Supervision is facilitated in that managers only need be familiar with a narrow set of skills 3 Coordination inside each department is easier iii Disadvantages 1 Decision making becomes slow and bureaucratic 2 Employees narrow their focus to the department and lose sight of organizational goals issues 3 Accountability and performance are difficult to monitor c Product Departmentalization i Grouping activities around products or product groups 1 Recreational and Rail Products Utility Vehicles Sector Sector 1 MassTransit Sector MassTmnsit Bombardier Hotsx Rail and Diesel Division Vienna Products Division l I l l Recreational Products Logistic Equipment Industrial Equipment BombardieriRotax Division gt Division Division Gunskirchen ii Advantages 1 All activities associated with one product can be integrated and coordinated 2 Speed and effectiveness of decision making are enhanced 3 Performance of individual products or product groups can be assessed iii Disadvantages Managers may focus on their product to the exclusion of the rest of the organization N Administrative costs may increase due to each department having its own functionalarea experts d Customer Departmentalization i Grouping activitiesto respond to and interact with specific customers and customer groups Director of Sales 7 ii Advantage 1 Skilled specialists can deal with unique customers or customer groups iii Disadvantage l A large administrative staff is needed to integrate activities of various departments e Location Departmentalization i The grouping ofjobs on the basis of defined geographic sites or areas ii Advantage l Enables the organization to respond easily to unique customer and environmental characteristics iii Disadvantage 1 Large administrative staff may be needed to keep track of units in scattered locations Ill what is Chain of Command a Chain of Command i The continuous line of authority that extends from upper levels of an organization to the lowest levels ofthe organization and clarifies who reports to who ii Unity of Command ONE BOSS 1 Each person within an organization must have a clear reporting relationship to one and only one boss iii Scalar Principle UNBROKEN LINE 1 A clear and unbroken line of authority must extend from the bottom to the top of the organization IV What differentiates a tall organization from a flat organization a Tall Organizations i Are more expensive because of the number of managers involved ii Foster more communication problems because of the number of people through whom information must pass b Flat Organizations i Lead to higher levels of employee morale and productivity ii Create more administrative responsibility for the relatively few managers iii Create more supervisory responsibility for managers due to wider spans of control V What does span of management mean a Span of Management i The number of employees who can be effectively and efficiently supervised by a manager ii Width of span is affected by 1 Skills and abilities of the manager Employee characteristics Characteristics of the work being done Similarity of tasks Complexity of tasks 031 wa Physical proximity of subordinates 7 Standardization oftasks V What is meant by the terms authority delegation centralization and decentralization a Authority i Power that has been legitimized by the organization b Delegation i The process by which managers assign a portion of their total workload to others 1 Reasons for Delegation a To enable the manager to get more work done by utilizing the skills and talents of subordinates b To foster development of subordinates by having them participate in decision making and problem c Centralization i The degree to which decisionmaking is concentrated at a single point in the organizations 1 Organizations in which top managers make all the decisions and lower level employees simply carry out those orders VII Chapter 12 2 Factors that lnfluince the amount of Centralization a Environment is stable b Lowerlevel managers are not as capable or experienced at making decisions as upperlevel managers Lowerlevel managers do not want to have a say in decisions Decisions are significant Organization is facing a crisis or the risk of company failure Company is large anhmslp Effective implementation of company strategies depends on managers retaining say over what happens d Decentralization i Organizations in which decisionmaking is pushed down to the managers who are closest to the action i Factors that influence the amount of decentralization 1 Environment is complex uncertain 2 Lowerlevel managers are capable and experienced at making decisions 3 Lowerlevel managers want a voice in decisions 4 Decisions are relatively minor 5 Corporate culture is open to allowing managers to have a say in what happens Company is geographically dispersed 7 Effective implementation of company strategies depends on managers having involvement and flexibility to make decisions Line vs Staff position a A line position is a position in the direct chain of command that is responsible for the achievement of an organization s goals b A position intended to provide expertise advice and support for line positions What is organizational design a The overall set of structural elements and the relationships among those elements used to manage the total organization b A means to implement strategies and plans to achieve organizational goals What is a bureaucratic model a A logical rational and efficient organization design based on a legitimate and formal system of authority Characteristics A division of labor with each position filled by an expert A consistent set of rules that ensure uniformity in task performance maria A hierarchy of positions which creates a chain of command VI f Impersonal management with the appropriate social distance between superiors and subordinates g Employment and advancement is based on technical expertise and employees are protected from arbitrary dismissal Mechanistic Organization vs Organic Organization a Mechanistic 39 High Specialization Rigid Departmentalization iquot Clear Chain of Command iv Narrow Spans of Control v Centralization vi High Formalization b Organic 39 CrossFu nctional Teams CrossHiera rchical Teams iquot Free Flow of Information iv Wide Spans of Control Decentralization lt Low Formalization v Situational Influences on Org Design a Organizational Life Cycle b Environment c Size d Technology What is the problem with a matrix structure a Employees are uncertain about reporting relationships b Managers may view design as an anarchy in which they have unlimited freedom c The dynamics of group behavior may lead to slower decision making oneperson domination compromise decisions or a loss of focus d More time may be required for coordinating taskrelated activities What is a learning organization a Works to facilitate the lifelong learning and development of its employees while transforming itself to respond to changing demands and needs


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Jennifer McGill UCSF Med School

"Selling my MCAT study guides and notes has been a great source of side revenue while I'm in school. Some months I'm making over $500! Plus, it makes me happy knowing that I'm helping future med students with their MCAT."

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"


"Their 'Elite Notetakers' are making over $1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.