PRINC OF MANAGEMENT
PRINC OF MANAGEMENT MGT 3200
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MANAGEMENT 3200 EXAM ONE OBJECTIVES FROM THE NOTES amp ASSIGNED READINGS INVITATION TO MANAGEMENT 1 What is management Management is the process of achieving desired results through the ef cient utilization of human and material resources 2 What are the 2 key concerns of management Effectiveness and Ef ciency 3 What is effectiveness concerned with Ef ciency Effectiveness is concerned with doing the right things at the right time the Efficiency is concerned with minimizing waste or reducing resource costs MEANS to those ends 4 How are effectiveness and efficiency related Efficiency is not the key to success you also need to be highly effective The more you are concerned with efficiency effectiveness goes down it s much easier to be concerned with effectiveness if one disregards efficiency In the end effectiveness is more critical These two goals are related in that it s much easier to be effective if one disregards efficiency For example Seiko could produce more accurate and attractive timepieces if it disregarded labor costs and material input costs Conversely it becomes increasingly more difficult to be effective when one becomes more and more concerned with efficiency For example a state university will nd it very dif cult to give its students a high quality education if it has a shoestring budget Just because organizations are ef cient does not necessarily make them effective Sometimes organizations can do the wrong things well However high ef ciency is more typically associated with high effectiveness than with low effectiveness Poor management is most often due to both ineffectiveness and inef ciency or effectiveness achieved through inef ciency The hallmark of good management is effectiveness combined with ef ciency But remember out of the two effectiveness is more critical If I m ef cient does that make me effective Not necessarily Ef cient organizations tend to be highly effective however there is no guarantee As I become more concerned about ef ciency effectiveness is more dif cult to achieve or less dif cult to achieve More dif cultithe more you re concerned about ef ciency the higher the cost of effectiveness Equot 0 P As competition increases ef ciency becomes more important Which of the scenarios is better 0 A company that is e ective but ine icientidoing the right thing not so well 0 A company that is ineffective but ef cientidoing the wrong thing really well What is your important resource as a manager 0 A manager s most important resource is Human Resources Is management art or science When is it considered a science An art 0 BOTH It is considered a science since we develop theories ofmanaging test these theories empirically using the scienti c method and re ne reformulate or discard these theories based upon the results of these studies It is considered an art form since it comes naturally to some people and there are also many different forms that can be best for different situations This is directly from the notes Management can also be considered a science You may hear it called a bastard science since it borrows heavily from so many elds such as pyllgy quot r Jand 39 Itis 391 Ja science since we develop theories of managing test these theories empirically using the scienti c method and re ne reformulate or discard these theories based upon the results of these studies Conversely management as practiced is really an art form For some managing is really just a natural extension of their personalities It comes easy or natural to them One piece of evident that convinces this instructor that management is an art form is there are many roads to managerial success or many widely different styles of management that can be successful If the practice of management were a pure science I could give anyone a stepbystep formula and provided that person followed that formula that person would become a managerial success But in reality this is simply not the case 0 How did management become important and why is it still signi cant today 0 Management became important at the birth of factories and the industrial revolution 0 it s the key to the ef cient accomplishment of organizational and societal objectives What was the basic change in the industrial revolution 0 The basic change that happened during the industrial revolution was the transfer of skills from the craftsman to the machine What happened to productivity supply prices and demand as a result of the industrial revolution 0 An enormous increase in productivity brought on by the addition of machinery and the division of labor to the transformation process made prices drop and consumption demand grew M odern capitalism was born 10 11 p t N o I productivity 0 I demand 0 1 prices What was the pivotal event of our time according to Drucker o The switch from ownermanager to professional manager was the pivotal event of our time Why do most businesses fail Poor management is cited most o en for business failure What does a first line manager do What are the names associated with 15 line management They manage operating employees and resources They are the only managers that do not manage other managers Their objective is to make sure that plans made by upper level managers are ful lled by their operating employees Supervisor foreman What does a middle level manager do What are the names associated with middle level manager They manage other managers They are to integrate the activities of different work groups so they operate smoothly And they act as interpreters and transform top management directives into firstline management there a communication channel between different levels of managers Plant manager division head What is corporate downsizing What happens in corporate downsizing What level of management is most adversely affected Corporate downsizing is when a company adopts a lean and mean philosophy Companies who are going through corporate downsizing are trying to cut the fat by eliminating layers of management asking retained managersemployees to do more implementing new computer and information technologies and farming out what had been staff managerial activities such as legal counsel and training and development of employees to outside consulting firms Middle level management is mostly adversely affected What does a top manager do What are the names associated with top management They determine the form of the organization and define its overall character mission and direction set the strategy for the organization ensure that the goals are set and accomplished according to the organization s purpose and they monitor the environment to identify potential problems and opportunities associated with the organization s goals or purpose 16 CEO chairman of the board executive vice president etc What is the difference between a line manager and a staff manager Line manager directly responsible for the work activities that contribute to the process or creating the organization s basic product or service Staff manager use their special expertise to support the efforts of line managersihave no authority over the transformational process 17 What is the difference between a functional manager and a general manager Functional manager have a responsibility for a single area of activityiEX nance production human resources accounting etcimost managers are functional General Manager responsible for more complex organizational subunits that include many functional areas 18 What is the difference between an administrator and a manager Administrator manager who works in public or nonpro t organizations as opposed to private for pro t business concerns Manager Administrators are managers who work in public or nonpro t organizations instead of managers who work for private organizations 19 What are the ve functions of management Be able to identify and describe the ve functions of management Planning involves goal setting and action planning to achieve those goals It is said to have primacy because it is the rst thing you do as a manager It provides direction for all other management functions Organizing includes the determination of what tasks are to be done who is to do them where decisions are to be made who reports to whom etc It involves job design departmental design and authority relationships Staff39mg and Human Resource Management is recruiting new employees developing and training the employees and offering incentives for high performance from workers 20 What does quotplanning has primacyquot mean It s the rst thing you do as a manager Planning provides the direction for all other management functions 21 What are the three aspects of controlling monitoring organizational performance comparing actual performance with hoped for performance taking corrective action giving feedback 22 What are the Siamese twins of management Flaming and controlling 23 What is are the most important functions for a Isl line manager Middle manager Top manager lst line staf ng and leading Middle organizing Top planning 24 What are three managerial roles Mintzberg identi ed Be able to identify each role Interpersonal interacting with others Inside outside your organization Purpose is to develop positive relationships with others Informational information processing Receive give and analyze information Decisional using information to solve problems or take advantage of opp01tunities Interpersonal sub roles f1gurehead leader and liaison this role involves interacting through oral and written communications with others inside and outside your organization The purpose here is to develop and maintain positive relationships with others If your relationships are negative then you may get poor information or no information and as a result you may make bad decisions This points up the imp01tance of treating your human resources well and the imp01tance of developing good interpersonal or human skills Informational sub roles monitor disseminator and spokesperson this role involves information processing You receive information you give information and you analyze information as a manager This role makes the manager a nerve center for the entire organization Decisional sub roles entrepreneur disturbance handler resource allocator and negotiator this role involves using information to solve problems or take advantage of opp01tunities What gives rise to the three managerial roles according to Mintzberg All managers have authority over their organizational subunits and they derive status from that authority Interpersonal sub roles f1gurehead leader and liaison this role involves interacting through oral and written communications with others inside and outside your organization The purpose here is to develop and maintain positive relationships with others If your relationships are negative then you may get poor information or no information and as a result you may make bad decisions This points up the importance of treating your human resources well and the imp01tance of developing good interpersonal or human skills Informational sub roles monitor disseminator and spokesperson this role involves information processing You receive information you give information and you analyze information as a manager This role makes the manager a nerve center for the entire organization Decisional sub roles entrepreneur disturbance handler resource allocator and negotiator this role involves using information to solve problems or take advantage of opp01tunities 26 What are three managerial skills identi ed by Katz Be able to identify each skill Technical ability to use special expertise relating to a method process or procedure in performing a task Human ability to work well in cooperation with others Conceptual ability to problem solve 27 N 00 N O Technical skill the ability to use a special expertise relating to a method process or procedure in performing a task 0 EX engineering accounting QBA and nance Human skill the ability to work well in cooperation with othersicritical skill for managers due to the highly interpersonal nature of managing o EX the ability to motivate people leadership communication self awareness and empathy gives rise to the platinum rule Conceptual skill the ability to problem solveiability to think in the abstract and in terms of the futureiability to forecast events to see oppottunities that no one else sees and to take advantage of these oppottunitiesiability to see the big picture ie gestalt thinkingiability to see how the organization and its environment fit together and how a change in one part affects or causes changes in the other pa1ts ie systems thinkingipeople also call it intuition or that gut feelingithe most difficult to acquire because they required a minimum level of mental ability ie reasonably intelligent and timeexperience to develop At what level of management are conceptual skills most important Technical skills Human skills lSt line managers need the most technical skills Human skills are imp01tant at every level Conceptual skills are most imp01tant in top management lSt line management technical Middle management all three Top management conceptual 0 As you go up the pyramid technical skills decrease 0 As you go up the pyramid conceptual skills increase As you go up the pyramid human skills stay constant What skill is most dif th to develop Why Conceptual They require a minimum level of mental ability and time experience to develop According to Luthans 1988 are effective managers successful managers in general No Effective managers are usually not the ones promoted rapidly through the organizational ranks Less than ten percent of the managers in this sample were both effective and successful The managers that were promoted rapidly through the organizational ranks were the best networkers What percent of effective managers are successful Less than 10 On what activity d0 effective managers spend the majority of their time Successful managers Effective communication Exchanging information and processing information Successful networking Socializing politicking and interacting with outsiders 32 What is the primary difference between derailed executives and executives who made it to top management according to the Center for Creative Leadership Derailed executives were insensitive to others The only way to get ahead is through other people ENVIRONMENT OF MANAGEMENT 33 What are the three basic characteristics of an open system Input transformation output 34 What is the cyclical nature of the nature transformation process Negative entropy Buffering the technical core Role differentiation and specialization Synergy Equifmality Cyclical nature transformation produces outputs that become new inputs Negative entropy bring in new energy to delay decaying process Buffering technical core controlling or neutralizing threatening external forces Role Differentiat39 J 39 quot quot 39 39 quot ofroles Synergy whole is equal to more than the sum of its parts Equi nality systems can reach the same end by different means 35 What are the ve subsystems of an organization What functions does each subsystem perform Production produces the product services Primary transformation Boundary spanning handle transactions at boundaries Exchanges with environment Adaptive organizational change Scans the environment for problems opportunities technology Maintenance upkeep of the organization Management directs the other subsystems Legitimizes 36 What are the two major dependencies in the external environment What is the threat to these 2 major dependencies DirectAction components and IndirectAction components Direct action immediate change Indirect actionlong term change 37 How do customers in uence organizations and how do organizations in uence customers An organization can survive only as long as it is able to exchange goods and services it produces for the resources necessary to obtain new inputs and maintain itself Without clients organizations could not exist Organizations are dependent upon clients for their continued survivala major dependency 38 How much more does it cost to find a new customer than to keep an old one according to Total Quality Management estimates 5 times as much 39 How do suppliers in uence organizations and how do organizations in uence suppliers ie 3 ways to establish and maintain a positive relationship with suppliers 40 44 E Vertical intergration buy your supplier If you can t maintain favorable relations with yourself then who can you maintain them withobtaining customers Long term contracts in which you lock in the supply at a lower price Of course here you are banking upon the fact that prices in the future will be much higher that they are currently Hopefully your forecast will prove accurate Bargain with supplier for a cheaper price EX The price is 20 now and you bargain to have a 30 price b c you think it will be 40 Reducing the number of suppliers This allows you to give larger contracts to suppliers These larger volume contracts allow the supplier to achieve economies of scale and the opportunity to automate which makes them more efficient and allows them to reduce costs Through cost reduction these suppliers can reduce their prices for their suppliers This in turn allows the organization to be more pro table winwin strategy Fquot 0 What is the law of the marketplace The law of the marketplace dictates that companies that can not compete will be faced with either changing their product line or being eliminated What are the ve forces of competition and how does each in uence the level of competition within an industry Rivalry among organizations intense competition causes industry shakeout weaker companies are eliminated and the stronger companies survive Mature industrymore competitive survival of the ttest 2 Threat of new entrants they compete with established companies They generally increase product supply seek to gain market share and often possess substantial resources Prices will be forced down and resource costs will be in ated This will reduce pro tability and increase competition 3 Threat of substitutes lower prices can translate into lower pro tability It can be devastating to an organization when there is an attractive substitute available at a lower price 4 Power of suppliers they can raise prices or reduce the quality of their goods and services Powerful suppliers can reduce organizations pro ts Power of the customer customer are important to an organization for more reasons than just the money they provide for goods and services Customers can demand higher quality lower prices or more services They can also play competitors off one another V39 What are the barriers to entry into an industry Some of the major barriers to entry are government policy capital requirements brand identi cation cost disadvantages and distribution channels What happens when a new entrant comes into the marketindustry New entrants into an industry compete with established companies They generally increase product supply seek to gain market share and often possess substantial resources The effect of these factors are prices will be forced down and resource costs will be in ated This will reduce pro tability and increase competition What determines if a supplier is powerful Customer A supplier is powerful if the buyer has few other resources of supply or if the supplier has many other buyers Customers are powerful if the make large purchases or if they can easily find Alternative places to buy 45 How do powerful suppliers and customers in uence organizations A powerful supplier can raise prices reduce quality and not deliver on time This can make you less competitive and result in lost market share and reduced pro tability Powerful costumers can drive down the price fore you to increase quality and service This all can cut into the bottom line profitability 46 How do substitutes affect an industry Substitute products or services limit an industry s growth potential The substitute can make a product obsolete 47 What are process and product innovations What is the focus of each Product innovation is an innovation made in the basic good or service an organization provides Effective orientedEX CD s MP3 players HD TV Process innovation is an innovation made in the technology used in transforming inputs into goods and services Efficiency orientedEX Assembly line computer automation and robotics adaptive subsystem 48 What are the general effects of technology on an industry The general effect of technology on an industry are product obsolescence and increased competition 49 How does the economy in uence an organization Economic changes pose both opportunities and problems for managers Expanding economy has an effect on the demand for a company s product or service It facilitates the establishment of new enterprises A major slowdown in economic growth can bring failure to some organizations The impact of the economic environment on management practices is almost certain to be unpredictable Managers prefer stable economic conditions with moderate steady growth 50 What are the four ways that government in uences organizations Government Regulations Subsidization and taxation government competition government economic policies 51 What is the shadow bureaucracy Regulations affect almost every aspect of management Nearly every department within an organization has a counterpart in one or more federal agencies These federal agencies are there to make sure that the organization is complying with the laws and regulations governing the department s activities It costs time money and effort to meet these regulations EPA watches over companies follow clean air rules 52 What are the three ways organizations in uence government Lobbying direct political action illegal action page 12 of 15 53 What is a PAC What are the limits regarding PAC contributions to campaigns PAC means Political Action Committees It s generally illegal for organizations to directly contribute to political campaigns they may form PAC s to solicit voluntary contributions from employees and stockholders PAC s are restricted to giving 5000 to a candidate for each election race There are no restrictions on how much a PAC can spend independently to help elect or defeat a candidate 54 How does society in uence business Business in uence society Traditions customs and beliefs in uence all people and all organizations An organization in uences society through a number of different means such as philanthropy support of charity drives and fundraising community service work advisory service ads and funding of community programs These activities help to legitimize the organization to its society Image ads show the society how organizations are helping with major societal concerns such as pollution product safety unemployment etc 55 How does the international component of the environment in uence organizations International is an indirectaction It provides managers with both opportunities and threats An organization must be aware of all aspects of the environment when in a forging country The foreign culture can present problems for an organization which can be prevented if the organization has a thorough knowledge of the culture including language customs norms and values Cultural differences can have a direct impact on business overreliance of foreign culture 56 What is environmental scanning How is it related to planning and organizational performance Environmental Scanning is the process of monitoring and evaluating changes and trends in the environment Organizations that gather a great deal of environmental information tend to perform better than organizations who gather comparatively little environmental information Look for threats and opportunitiesthe more you scan the better you plan the more you plan the better success you have PLANNING 57 What are the three purposes of planning Fundamental purposewhy we plan protective or defensive purpose and affirmative or offensive purposeEXploit threats 58 Why is planning important Organizational success sense of unity and direction helps managers anticipate and prepare for possible future changes helps develop performance standards and provides a basis for managerial development Helps you succees helps you anticipate change gives you unity and direction helps develop management 59 Why do managers resist planning 9 reasons one of many functions hard work used to measure results takes time and is expensive lack of immediate feedback involves change fear of failure lack of self con dence not rewarded by organization and goes against quotdoerquot mentality 60 What is Gresham39s law of planning Tendency for routine repetitive problems to overshadow planning problems misplaced prioritiesmanagers want to plan 61 What does the non planner typically blame for hisher poor performance Blame their misfortunes on bad luck 62 What are the ve phases of the planning process and what happens at each phase 1 Establishing objectives starting point for the planning function provide the direction for all other management functions 2 Developing premises forecasting events or conditions likely to in uence goal attainment 3 Decision making identifying alternatives evaluating each alternative and selecting the alternative with the highest probability of success The course of action is adopted after this phase Phase 123 about developing plan 4 Implementing a course of action understanding the plan having the given resources and motivating people to carry out the plan 5 Evaluating results the actual results of the planning with the quothoped forquot Phase 4 5 about carrying out plan 63 What provides the basis for Phase 1 Establishing Objectives The SMART model 64 What are SMART goals SMART specific measurable achievable relevant and trackable 65 What is contingency planning What are the benefits and drawbacks Contingency planning the quotwhat if Benefits allows greater exibility and is particularly useful in a dynamic changing environment Drawbacks requires greater time and resources than normal planning 66 What are the keys to effective implementation of a plan Understand the plan have the resources and motivate people to implement the plan 1 have the resources to do it budgetary system 2 effective communication of the plan 3 reward and motivate people to implement plans with whats in it for me 67 What function of management is Phase 5 Evaluating Results Controlling feedback 68 What is the basic dilemma in planning The more committed to a plan the less you want to change it between commitment and exability 69 What are the different failures to avoid in planning Be able to identify Failures topdown delegation of planning key line managers left out lack of supportive climate for planning plans that are too rigid and or complex failure to manager your plan getting bogged down in the details of planning and having unrealistic expectations 70 What is the crystal ball syndrome Cure all syndrome Persian messenger syndrome Crystal ball you believe once you have forecasted a future scenario and developed a plan for that future that is all you need to do as a manager to make your plan successful neglect phase 4 and 5 Cure All assumes planning will cure all your problems as a manager Persian Messenger when you punish the person who brings you bad news about your plan affects evaluating resultsfunction it most affects is controlling STRATEGIC PLANNING 71 What is the focus of strategic planning It focuses on an organizations long term relationship with your external environment 72 What are the four components of a well thought out strategy Be able to identify 1 Scope specifies the range of markets in which the organization will compete 2 Resource deployment how it will distribute its resources among various areas of the business 3 distinctive competence it is something an organization does will that sets them apart from other organizations 4 synergy refers to how the different areas of the business enhance or compliment one another synergy eamwork 73 What is corporate strategy and business level strategy Corporate 7 focuses on what businesses we want to be in it is focused primarily on scope and resource deployment Businesslevel focuses on how we want to compete in a business market or industry It is primarily concerned with competitive advantage and synergy Goal of both is market share and profitability 74 What are the four elements of strategy formulation and what does each element consist of l 2 Analysis of the organizations mission and objectives what is its purpose 0 Mission statements provide a sense of common direction to the members of the organization by defining what business each organization wants to be in a setting each clearly apart from its competitors Strategic planning principal 1 strategy and objectives must direct effort toward the accomplishment of the organization s basic mission and overall purpose 3 Analysis of the environment what are the threats and opportunities 0 Managers must interpret external info and determine which issues are critical Important thing to come out of this step is the proper identification of the environment Requires effectiveness in gathering data on the environment and then interpreting as an input to the strategic planning process Strategic planning principal 2 strategy and objectives should target efforts on specific results that will solve key problems and exploit key opportunities in the organization s environment 3 2Analysis of the Organization iwhat are its strengths and weaknesses 0 Provides a realistic basis for strategic planning This internal evaluation includes evaluation of departments products technology and other organizational characteristics Strategic principal 3 strategies should build upon the strengths and minimize the weaknesses of the organization 4 Analysis of managerial values what s the corporate culture 0 Strategic principal 4 Strategy and objectives should be consistent with prevailing managerial values and the corporate culture SWOT strength weakness opportunites 75 What are bene ts of a mission statement It helps strategy formulation by targeting plans on directions consistent with an overriding sense of organizational purpose They create a clear sense of how each major stakeholder in the organization will be served They are the goals that the members of the organization identify with and become committed to if your strategy is consistent with what you vaule in your organization then people will follow it 76 What is a SWOT analysis I W l 0 Analysis of the environment and analysis of the organization form the SWOT analysis strengths weaknesses opportunities and threats analysis AKA WOTS UP analysis weaknesses opportunities threats and strengths underlying planning analysis A result of SWOT a company can develop a market niche that is particularly advantageous by matching outside opportunities with inside strengths What is the goal of the Business Portfolio Matrix Approach It was developed by the Boston Consulting Group it deals with corporate strategy and business level strategy The portfolio matrix categorizes strategic business units in terms of their rate of market growth and their relative market share The object is to assist managers in allocating resources to strategic business units in order to maximize pro t and market share goals What levels of strategy does the Business Portfolio Matrix Approach deal with Corporate strategy you want to maintain a balanced portfolio and business level strategy which includes 3 steps id SBU classify SBU into matrix and select strategy to manager the SBU based upon that classification How are SBUs classi ed in the Business Portfolio Matrix Approach Star cash cow new ventures dogs What business strategy is used for a cash cow Star Dog New Venture Star select growth strategy Cash cow selects stable growth strategy or possibly in some instances a retrenchment strategy W p t 00 M W 5 New ventures if a new venture has a good chance of succeeding choose a growth strategy If the new venture does NOT stand a good chance of succeeding then select a divestiture strategy or a retrenchment strategy What is the basic idea behind Generic Strategies Three generic strategies that an organization can adopt the term generic is used because these strategies can be applied to a wide variety of industries What are the three Generic Strategies identi ed by Porter Be able to identify 1 Differentiation involves developing an image of the organization s product or service in such a way that customers view it as being different from all others The product can be different in terms of quality design and future service The organization can charge more for their unique product 2 Overall Cost Leadership attempts to maximize sales by minimizing cost per unit and hence prices Tries to increase sales volume by charging lower prices 3 Focus involves an organization concentrating its attention on a specific segment of an overall market such as customer group a certain geographical location or a specialized product line An organization that employs a focus group tries to serve the needs of its selected market segment more effectively and efficiently What is the basic idea behind the Adaptation model of strategy Deals with businesslevel strategy it states that in order to be effective an organization s strategy must be aligned with the environment or be congruent with the environment This process of alignment is based upon the top manager s interpretation of the environment adapt strategy to environment What is a defender Prospector Analyzer Reactor When is a defender strategy the best Prospector Analyzer Reactor 1 Defender management sees demand for their product as not growing stable environment best when the environment is stable and worst when the environment is dynamic Must have efficient production Organize by lots of rules and regulation To make money we have to save money 2 Analyzer management sees environment as moderately changing When it s intermediate in terms of change 3 Prospector management sees environment as dynamic growing Best when it s dynamic and Worst when its stable Explore new markets and try to get into new markets Not the most efficient production Loose organizing 4 Reactor Worst strategy reacts to environment No set strategy Therefore no set production process or organizational design Each strategy is best when it is congruent with the environment except for reactor How does each strategy type in the Adaptation Model answer the entrepreneurial engineering and administrative questions 1 Entrepreneurial Defender seal off market share defend market share through overall cost leadership lower prices Stable growth strategy Analyzer To defend market share with some products and innovate with other products Scan for new opportunities while protecting current positions Prospector Find and exploit new markets prospect Scan the environment constantly foe new opportunities 2 Engineering Defender Efficient production to lower cost per unitprice o Analyzer Efficient production for some products and exibility for new lines Prospector Flexible production Don t get tied to one technology or invest heavily into a certain production system 3 Administrative Defender Tight controlstay within budget a lot of costs controls etc centralized decision making Analyzer Tight control over old lines and loose control for new lines Centralized decision making for old lines and decentralized for new lines Prospector Loose control to encourage innovation coordination and creativity Decentralized decision making Reactor Answers to all three questions is always changing INEFFICIENT 86 How are the strategies in the Business Portfolio Matrix Approach and the Adaptation Model of Strategy related to one another ASSIGNED OUT SIDE READINGS 87 What does the article When competitive advantage is neither say about competitive benchmarking as a strategy meant to be an innovative strategy but is actually an imitation strategy business finds out what competitors are doing and tries to do it a little better but little risk little reward Article says that a focus on beating the competition competitive benchmarking is counterproductive should use value innovation instead of competitive benchmarking as a strategy competitive benchmarking gets in way of gaining market share Competitive benchmarking is imitative So focused on beating completion that you beat competition but lose customer 88 What does the article Avoid pricing yourself short say about competing on price as a strategy for attracting customers The answer is that price isn t just money Price is the start of a relationship You cut prices to get business and you don t just give up money you give up respect as wellafter all you just proved that your regular price was kind of a lie You have proven that your customers have to keep an eye on you that you can t be trusted In other words you start giving in on price and you ve already begun giving up 89 Questions from the Business Week article What s in a Phrase A What did Emergence s second annual slogan study reveal 55 p t N 3 4 The key is to focus less on your slogan and more on your brand Make sure product is relevant to customers and that your identity in the marketplace is consistent What s the simple lesson regarding slogans Slogans aren t magic In most cases consumers do not pay that much attention to them anyways Companies that focus too much on slogans end up neglecting the truly important aspects of their businesses What are the three rules in slogan making l in slogan making is to not advertise your aspirations 2 give your slogan time to develop 3 Consider not using a slogan at all Slogans and their ads that deliver them come and go but great brands are timeless Exam One Objectives from the Textbook MGMT What is a team leader p 9 Team leaders facilitate team activities toward goal accomplishments What are the responsibilities of a team leader p 9 Team leaders are responsible for facilitating team performance they help their team members plan and schedule work learn to solve problems and work effectively with each other They are also responsible for managing external relationships they act as the bridge between their teams and other teams departments and divisions in a company What are the top ten mistakes made by managers p 14 Insensitive to others abrasive intimidating bullying style P Cold aloof arrogant Betrayal of trust Overly ambitious thinking of next job playing politics Specific performance problems with the business Over managing unable to delegate or build a team Unable to staff effectively Unable to think strategically Unable to adapt to boss with different styles h r39rqerasbapu Over dependent on advocate or mentor What are the stages in the transition to management and what happens at each stage p 16 1 Managers initial expectations 0 Be the boss 0 Formal authority 0 Manage tasks Job is not managing people UI 0 l 00 O 2 After six months as a manager 0 Initial expectations were wrong 0 Fast pace 0 Heavy workload 0 Job is to be problemsolver and trouble shooter for subordinates 3 after a year as a manager 0 no longer doer 0 Communication listening and positive 0 Learning to adapt to and control stress 0 Job is people develop What is punctuated equilibrium theory and what does it say about organizational change p 44 Punctuated equilibrium theory a theory that holds that companies go through long simple periods of stabilityequilibrium followed by short periods of dynamic fundamental changerevolution and ending with a return to stability new equilibrium What is an advocacy group p 51 An advocacy group are groups of concerned citizens who band together to try to in uence the business practices of speci c industries businesses and professions The members generally share the same point of view on the same issues What is the difference between the public communications and the media advocacy approach p 51 Public communications approach relies on voluntary pa1ticipation by the news media and the advertising industry to send out an advocacy group s message Media advocacy is much more aggressive it involves framing the groups concerns as public issues affecting everyone exposing questionable exploitative or unethical practices and creating controversy that is likely to receive extensive news coverage What is option based planning p 83 The last step in developing an effective plan is to maintain exibility One method of maintaining exibility while planning is to adopt an option based approach The goal of OPTIONSBASED PLANNING is to keep options open by making small simultaneous investments in many alternative plans When one or a few of those plans look like winners you invest more n those plans while discontinuing or reducing investment in others What are slack resources as they relate to planning p 83 The purpose of an action plan is to commit people and resources to a particular course of action H H H H The purpose of optionsbased planning is to leave those commitments open by maintaining SLACK RESOURCES a cushion of resourcessuch as extra time people money or production capacity that can be used to address and adapt to unanticipated changes problems or opportunities Holding options open gives you choices and choices combined with slack resources gives you exibility What is the difference between a single use plan and a standing plan p 85 A single use plan deals with unique one time only events like a company making a plan to relocate in a different state The plan in created carried out and then never used again Standing plans are plans that are used repeatedly to handle frequently recurring events They save managers time because once they are created they can be used repeatedly Three types of standing plans are policies procedures and rules and regulations What is the difference between a policy and a procedure pp 85 and 86 A policy indicated the general course of action that company managers should take in response to a particular event or situation Procedures are more speci c than policies because they indicate the series of steps that should be taken in response to a particular event What s unrelated diversi cation Related diversification pp 105 and 107 Unrelated diversi cation is creating or acquiring companies in completely unrelated businesses When businesses are unrelated losses in one business or industry should have minimal effect on the performance of other companies in the corporate portfolio Ex Samsung of Korea they have businesses in electronics machinery automobiles and hotels Related diversification is where different business units share similar products manufacturing marketing technology or cultures The key is to acquire or create new companies with core capabilities that complement the core capabilities of businesses already in the corporate portfolio Related diversification reduces risk because the different businesses can work as a team relying on each other for needed experience expertise and support Ex 3M company has 7 different business sectors office supplies medical supplies protection services display and graphics electronics industrial and transportation While seemingly different most of 3M s product divisions are based on some form on its distinctive competencies in adhesives and tape What is the relationship between diversi cation and risk p 106 Single businesses with no diversification are extremely risky if the single business fails the entire business fails Competing in a variety of different businesses can lower risk H N M 5 UI 0 l 00 O H C H H H N MANAGEMENT 3200 FINAL EXAM REVIEW QUESTIONS MOTIVATION What are the ve needs in Maslow s hierarchy of needs Know what each need is and be able to recognize what need is being satis ed in a given situation According to Maslow what motivates your behavior What does Maslow believe about satis ed needs If a need is frustrated what will the employee experience according to Maslow Can the employee still be motivated if hisher needs are frustrated What needs are typically unsatis ed in most organizations Why is this the case What would help satisfy these needs What need is the highest level of personal motivation How many people reach this level Is it ever fully satis ed or ful lled What is a peak experience What does the research say about Maslow s hierarchy of needs What is a cafeteria style bene ts plan How would you apply Maslow s theory of motivation if you were a manager What are the three needs in ERG theory that can motivate behavior How do the three needs in ERG theory match up to the ve needs in Maslow s hierarchy of needs What does Alderfer s ERG theory say about a satis ed need What is the frustration regression principle in ERG theory What does it say about need frustration What does Herzberg say is the opposite of job satisfaction The opposite of job dissatisfaction What is a motivator factor and what is it related to in 2 factor theory be able to recognize what are motivators on the job Motivators are like what needs in Maslow s hierarchy p t l What is a hygiene factor and what is it related to in 2 factor theory be able to recognize what are hygienes on the job Hygienes are like what needs in Maslow s hierarchy H 00 What does Herzberg advocate as the only way to motivate employees ie make them job satis ed p t O What is the effect of good pay good supervision good bene ts etcon job dissatisfaction Can hygiene factors motivate people according to Herzberg N O If I gave you an example of a person holding a certain type of job e g specialized or enriched and having either good or poor hygienes eg pay bene ts and supervision you will be able to tell me what the person is experiencing in terms of job satisfaction or no job satisfaction and job dissatisfaction or no job dissatisfaction 21 What are the problems with Herzberg s 2 factor theory 22 What is the basic premise behind goal setting theory 23 What does SCARF mean in goal setting theory 8 Goals should be specific in terms of what s desired and when it s desired by C Goals should be challenging yet achievable A Goals should be accepted by the person ownership R Goal attainment should be rewarded F One should receive feedback on goal related performance 24 How does one build greater of acceptance of speci c and challenging goals From in class 3 ways to increase goal acceptance 1 Rewards for goal attainment 2 Participation in goal setting by the subordinate used when there is high trust 3 Autocratic tell and sell method of goal setting used during low trust Neither 2 0r 3 is better than the other it depends on the situation Both can be equally effective if used in the proper situation 25 How does participation in goal setting increase performance Concerning participation in goal setting research has shown that participation in goal setting can have a positive effect on effort and performance when this participation leads to greater goal acceptance STEP 1 and this greater goal acceptance in turn leads to improved performance STEP 2 Thus participation in goal setting is characterized by a twostep model 26 When does participation in goal setting not work Note that participation in goal setting does not always lead to increased goal acceptance thus it does not lead to increased performance This is especially true when the organizational climate is distrustful when management and labor do not trust each other when participation does not fit the manager s style and when the employee does not want to participate 27 What is the autocratic tell sell method of goal setting When do you use it Through the use of tell and sell the autocratic manager can increase goal acceptance Research has revealed that there is no signi cant difference between participation in goal setting and the tell and sell method of assigned goal setting in terms of goal acceptance or performance They are both effective methods for increasing goal acceptance and performance under the proper conditions 28 In reinforcement theory what is Thorndike s law of effect THORNDIKE S LAW OF EFFECT This principle states that behaviors that are followed by positive consequences tend to be repeated whereas behaviors that are followed by negative or no consequences will tend not to be repeated Thus the consequence or the effect of the behavior determines the behavior s frequency 29 What is positive reinforcement What does it do to the frequency of the behavior Positive Reinforcement providing a positive consequence when a behavior occurs This increase the likelihood that the behavior will be repeated in the future It increases frequency of that behavior 30 What is negative reinforcement What does it do to the frequency of the behavior Negative Reinforcement avoidance leaming the taking away of a negative consequence when a behavior occurs This increases the likelihood that the behavior will be repeated in the future The person learns by avoiding something negative It increases the frequency of the behavior 31 What is extinction What does it do to the frequency of the behavior Extinction no consequence ie withhold positive consequences is provided when a behavior occurs If you ignore it long enough it will go away This decreases the likelihood that this behavior will be repeated in the future It decreases the frequency of the behavior 32 What is an extinction spike The problem with extinction is that there is usually an increase in frequency of the undesirable responsebehavior for a period of time soon after extinction has begun This is called an extinction spike However if given sufficient time and given that the extinction is properly continued the behavior will start to decrease in frequency 33 What is punishment What does it do to the frequency of the behavior Punishment providing negative consequences when a behavior occurs This will reduce the likelihood that the behavior will be repeated in the future This will decrease the frequency of the behavior 34 What are the problems with punishment Problems with punishment are that it doesn t replace the bad behavior with a good behavior it may result in aggression against the punisher negative feelings apathy on the part of the worker etc the bad behavior may only not occur when the punisher is around Remember my cookie jar exampleonce my mom left I was in cookie heaven On the positive side it is OK to punish when the behavior has serious consequences for example if a safety rule violation can endanger a number of lives then it is OK to punish this behavior 35 What is the leave alone zap trap What does the manager do when you perform well What does the manager do when you perform poorly or make a mistake LEAVEALONE ZAP TRAP Often times managers manage by exceptions or by leavealone zap That is when you perform well they leave you alone do nothing They give you no consequence EXTINCTION for high performance This is the most frequent consequence the leave alone zap manager uses However when you make a mistake the manager zaps youpunishes you in order to get you to stop the undesired behavior But it does not follow from this that you will respond in the desired way because punishment does not tell you the right way to do things It only tells you what you are doing wrong In leavealone zap what happens to high performance It is not rewarded It s given no response extinction so it decreases in frequency 36 What kind of work climate is created by the leave alone zap manager creates an atmosphere based on avoidance and fear Employees become alienated and frustrated They start avoiding the manager and hide problems from them An unproductive work climate is born 37 How do you overcome the leave alone zap trap as a manager In order to avoid this trap managers need to manage by walking around MBWA and through monitoring behavior catch people doing things right and provide positive consequences for good behavior Thus good performance is clearly specified and when it is achieved rewards are attached to it You get a much more productive and satisfying work environment 38 How many positive consequences to every negative consequence does it take for your subordinate not to perceive you as a punisher in general 4 to 1 you remember negative most so it takes more positives to overcome it 39 What is the jelly bean motivation trap How does it affect motivation and performance How do you overcome it Rewards are only meaningful when they are tied to what JELLYBEAN MOTIVATION TRAP which is giving something for nothing You need to avoid this trap that across the board incentives will motivate behavior This is clearly ineffective in motivating employees Everybody gets the same positive consequence regardless of their performance Thus the positive consequence has no meaning it s not special because it s not tied to performance It does not improve performance 40 What is the rewarding 0n assumed needs trap What do you turn a reward into when you fall into this trap How do you avoid this trap REWARDING ON AS SUMED NEEDS TRAP To have a productive and satisfying work environment you need to make a contract between yourself and your employee upfront that if the employee helps you to achieve the company goals then you will provide him with things that will satisfy his needs One of the problems you run into in organizations is that supervisors often think they can gure out what motivates their employees by themselves Supervisors often reward people based upon hunches on their hypothetical guesses This is the rewarding on assumed needs trap They assume things about the rewards people desire for high performance and when they assume things in terms of rewards the rewards they provide their employees for high performance may not be motivating because their hunches are o en wrong One of the things that we need to do in order to avoid this trap is to ask the people people are unique what it takes to get them motivated What would they like as a positive consequence reward within certain limits etc if they achieved a certain goal 41 What is the concern of equity theory This theory is concerned with defining what individuals in our society consider to be equitable fair and their reactions to being in situations they perceive as unfair 42 What are the four basic postulates or tenants of equity theory 4 basic postulates 1 Individuals strive to create and maintain a state of equity 2 When a state of inequity is perceived it creates tension which the individual is motivated to reduce or eliminate it 3 The greater the magnitude of perceived inequity the greater is the motivation to act to reduce the state of tension Individuals should perceive an unfavorable inequity eg receiving too little pay more readily than a favorable one 43 What is the difference between equity and equality Equity OUTCOMESp OUTCOMESo Equality OUTCOMESp OUTCOMESo INPUTSp INPUTSo 44 What is more important in equity theory perception or reality Perception 45 What is favorable inequity Unfavorable inequity two types of inequity unfavorable one that hurts you and favorable one that benefits you UNFAVORABLE INEQUITY OUTCOME Sp lt OUTCOMESo INPUTSp INPUTSo FAVORABLE INEQUITY OUTCOME Sp gt OUTCOMESo INPUTSp INPUTSo Unfavorable Inequity Example Secretary A types faster takes better shorthand has worked for the company longer has more experience as a secretary then Secretary B but gets paid less then Secretary B Secretary A has less outcomes and greater inputs than Secretary B thus Secretary A s ratio is less than Secretary B s ratio If our focus is Secretary A you have a case of unfavorable inequity On the other hand if our focus is Secretary B then you have a case of favorable inequity 46 When faced with unfavorable inequity what are the different ways one can use to restore equity 1 Reduce quantity of work 2 Reduce quality of work 3 Convince boss to give you a raise 4 Convince your coworker comparison other to reduce his inputsoutcomes 5 Quit your job 6 Select a different comparison other one that gives you a state of equity 7 Distort your inputs or outcomes 8 Distort inputs and or outcomes of your comparison other 47 When faced with unfavorable inequity how do people normally restore equity behaviorally or cognitively The research has generally supported the theory s prediction for unfavorable inequity people at work who experience unfavorable inequality are dissatisfied they reduce the quantity andor quality of their output and they are more likely to be absent and to turnover However research concerning favorable inequity has not supported the theory s prediction ie increased quality and quantity performance when the person is overpaid The research in this regard has revealed that for the most part people don t increase the quality and quantity of their work to reduce the favorable inequity rather they change their perceptions concerning the situation in order to resolve the inequity Therefore cognivitively Thus for most people when they underpaid they will try to restore equity through behavioral means In contrast for most people then they are overpaid they will try to restore equity through cognitive means 48 When faced with favorable inequity how do people normally restore equity behaviorally or cognitively 49 What is an Entitled Equity Sensitive Benevolent What does each type perceive as fair Entitleds OUTCOMESp gt OUTCOMESo INPUTSp INPUTSo Even if entitleds are equitable paid they will react negatively If any of you have worked in groups on projects and have encountered a freerider or social loafer who expects to get the same grade as you without contributing as much as you then you have encountered the entitled This conceptualization is very consistent with the 80 s or the ME generation Equity Sensitives OUTCOMESp OUTCOMESo INPUTS INPUTSo These individuals conform to the regular equity theory predictions Benevolents OUTCOME Sp lt OUTCOMESo INPUTSp INPUTSo This is a martyrtype Probably very few individuals are benevolents 50 Which of the three types listed in question 49 is most prevalent Least prevalent Problems with Equity Theory The major problem with equity theory is that it is hard to apply on a casebycase basis It s hard to apply because in order to apply it we have to know exactly how the individual is perceiving the situation that is we have to know who they are comparing themselves to we have to know what they consider to inputs and outcomes and then we have to know how they will react to inequity before we can predict how they will respond to being treated fairly or unfairly Basically to apply equity theory on an individual basis you have to climb inside the head of the individual that you are concerned with At this time this is impossible to do Thus equity theory is difficult to apply because of the following problems 1 Little is known about how people decide with whom to compare themselves there are a number of different referents available to individuals professions coworkers internal standards etc Different comparison others lead to different perceptions of equity inequity 2 Difficult to define inputs and outcomes What do people consider these to be For example one person s outcome increased responsibility on the job may be another s input Changing an input to an outcome or an outcome to an input can change one s perceptions of equity inequity L V Selection of means to reduce inequity is troublesome to predict There are many different ways to restore equityperson may do it behaviorally or cognitively The trouble with equity theory is predicting what way the person will chose to reduce the inequity 51 What are the problems with equity theory Leadership is the art of in uencing individual or group activities toward achievement of organizational goals Leadership is about getting people to assist you willingly and harmoniously in accomplishing organizational goals Leadership and Management are not equivalent Being a great leader does not necessarily make you a great manager because leadership is only one function of management However having leadership ability will make you a better manager because through 39 J 391 p39 J become and they start assisting you in carrying out your other management functions 1 LEADERSHIP 52 What is leadership Leadership is based upon informal authority persuasionpersonal sources of power and supervision relies on formal authority position power When a manager leads the subordinate complies with the manager s request because they want to On the other hand when the manager supervises the subordinate complies with the manager s request because they have to ie because the manager is the boss Thus leadership is based upon voluntary rather than forced compliance 53 What is the difference between management and leadership 1 Reward power the capacity to allocate rewards to subordinates who comply with a manager s request is reward power 2 Coercive power the capacity to dispense punishments to subordinates who don t comply with a manager s request is coercive power This base of power also entails the use of threats to get subordinates to comply with the manager s request 3 Legitimate power the right of the manager to request reasonable actions from subordinates and expect that they will comply is legitimate power This is also known as position power From position power springs reward and coercive power 4 Expert power the special knowledge or expertise that a manager may possess is expert power Subordinates comply with a manager s request here because the manager knows the best way to accomplish the task 5 Referent power the identification of the subordinate with the manager is referent power The subordinate admires the manager in terms of the personal qualities the manager possesses and or the goals the manager is achieving This is the power of example A subordinate complies with a manager s request here because the subordinate admires and desires to be like the manager and wishes to gain the manager s approval 54 What is the difference between leadership and supervision A leader will be more likely to use referent andor expert power and a supervisor will use legitimate reward andor coercive power 55 What is reward power coercive power legitimate power expert power referent power be able to recognize when each is being used in a situation Referent power best exempli es leadership whereas legitimate power best exempli es supervision 56 What power bases does a leader use supervisor use Research has been conducted on the relationship between the power bases and productivity This research has revealed that legitimate and reward power have no signi cant relation to productivity coercive power is negatively related to productivity and expert and referent power are positively associated with productivity The message from this research is clear to gain high productivity a manager must lead and not supervise 57 Which of the power bases best exempli es supervision leadership McGregor was one of the rsts to suggest that a manager s underlying assumptions about human behavior would in uence hisher approach to leadership McGregor contrasted two Views of human behavior that he called Theory X and Theory Y Theory X and Theory Y are opposing Views of individuals These Views affect manager s leader behaviors 58 What is the relationship between the ve power bases and productivity Theory X is a particular set of assumptions about people Theory X assumes that people dislike work they must be coerced controlled directed and threatened to get them to put forth effort people prefer to be directed and wish to avoid responsibility Theory X managers would be likely to use coercion discipline and penalties to get subordinates to accomplish organizational goals Theory Y is a particular set of assumptions about people Theory Y assumes that people like to work they would exercise selfdirection and selfcontrol they accept as well as seek responsibility and they have a need for achievement for responsibility and a chance to be creative Theory Y managers would be likely to use selfmanagement and participative management to get subordinates to accomplish organizational goals 59 What are theory x and theory y How do they affect leadership THEORY X MANAGER IS AN AUTOCRATIC LEADER AND THEORY Y MANAGER IS A DEMOCRATIC LEADER THEORY X IS A SUPERVISOR AND THEORY Y IS A LEADER RELATE THIS THEORY TO MASLOW S HIERARCHY OF NEEDS THEORY X MANAGERS BELIEVE WHAT NEEDS MOTIVATE PEOPLE THEORY Y MANAGERS BELIEVE WHAT NEEDS MOTIVATE PEOPLE THESE ASSUMPTIONS CAN TURN INTO SELFFULFILLING PROPHECIES 60 What are the beliefs that underlie theory x theory y Trait This approach tried to determine what specific traits made a person an effective leader This approach investigated both the physical and psychological characteristics traits that separated leaders from followers and effective from ineffective leaders A trait is a distinctive physical or psychological characteristic that accounts for a person s behavior 61 What is meant by the phrase these theories x and y can become self fulfilling prophecies The trait approach started off as the GREAT MAN THEORY OF LEADERSHIP Great man theory is the view of leadership that leaders are born not made learned behavior was irrelevant This is the NATURE perspective It believed that great leaders were endowed with inherited qualities that made them effective leaders in any situation This approach fell into disfavor around the 1890 s It was transformed into a theory that held these traits could be learned LEARNED TRAITS THEORY This was the NURTURE point of view 62 What is the basic idea behind trait theory of leadership Traits don t seem to separate leaders from followers That is they don t reliably differentiate leaders from followers Overall these studies in the trait approach found that leaders tend to be slightly taller slightly more intelligent slightly more visible and slightly more socially adept However there is great overlap between leaders and followers on these traits ie some leaders are very short and some followers are very tall HOWEVER a recent study by Kenney amp Zaccaro 1983 has shown that one trait is characteristic of a large number of leaders Behavioral Flexibility ability to perceive group member s need and goals and to adjust one s approach accordingly 63 What is the great man trait theory Learned traits thoery Behavioral The behavioral phase holds that leaders may be best characterized by how they behave rather than by their personality traits Difference between behavioral and trait approaches is that the behavioral approach focuses on what leaders do and how they do it whereas the trait approach focuses on what leaders are 64 In general what has the research revealed about traits separating leaders from followers 65 What trait does reliably tells you if someone will be a leader or not Why was the trait in 65 not identi ed until recently What is the focus of behavioral theory also known as the Ohio State Studies What is initiating structure consideration be able to recognize these behaviors in a situation Which combination of behaviors did behavioral theorists originally think would be the best in all situations Originally thought High structure High consideration was the best What is the major drawback of the behavioral theory Ohio State Studies as originally proposed It started off as one best way theory and therefore paid limited attention to the situation However in the end it became a contingency theory of leadership What combination of behaviors is actually the best in behavioral theory All of them are the best it depends on the situation What combination of behaviors does a theory x manager exhibit theory y exhibit Theory X High structure Low consideration Theory Y Low structure High consideration In Fielder s contingency theory of leadership work group performance is a function of what 1 A person s leadership style 2 The favorableness of leadership situation According to Fiedler what is your leadership style based on As a result does Fiedler believe you can change your leadership style Believes leadership style is based on personality and is therefore fixed What does Fiedler believe about leadership training that teaches you how to be exible and change your style to match the situation Believes leadership training is a waste of time because your leadership style is fixed What scale did Fiedler develop to measure your leadership style Least Preferred Coworker LPC If your LPC score is low what does that mean What type of leader are you You had a negative View of your least preferred coworker You are a taskoriented leader If your LPC score is high what does that mean What type of leader are you You had a positive view of your least preferred coworker You are a relationship oriented leader What are the three factors that determine situational favorableness Which is most important Least important 1 Leadermember relations the degree to which group members like and trust and therefore are willing to follow their leader 2 Task structure the extent to which the group s task can be spelled out stepbystep and performed according to a standard or welldefined procedure 3 Position power the power inherent in the leader s position including the freedom to hire fire promote or demote and the support from higher management for these decisions When is a high LPC leader the best Low LPC Middle LPC Why is the case according to Fiedler High LPC leaders are best in the middle situational favorability 4 5 Low LPC leaders are best in the extreme situational favorability l 2 3 8 Middle LPC leaders are best everywhere What is another name for middle LPC leadership Sorry I don t know this answer to this one What are the implications of Fiedler s contingency theory for managers Inaccurate to speak of effective ineffective leaders when considering high LPC or low LPC leaders there are those who perform better in some leadership situations but not all situations Anyone can be a leader by carefully selecting those situations that match hisher leadership style Leadership effectiveness can be enhanced by engineering the job to fit the manager modifying the favorableness of the situation in which heshe is placed e g increasing or decreasing position power changing the structure of the task or in uencing leader 7 member relations It should be realized that this option might be limited Fiedler contends that a person s leadership style depends upon his personality which is relatively fixed This implies that a few lectures or a few weeks of intensive training are unlikely to change a person s leadership style The value of most training program would thus seem doubtful Leader Match Fiedler s training program Focuses on training the leader to change the favorability of the situation Through this a leader could diagnose the situation and then changealter the situation to match his style for maximum work group effectiveness What does Fiedler recommend as a way to improve leadership effectiveness when a leader finds herself in a situation that does not match her style Change the situation by either taking on more position power or giving some up 84 What is Vroom and Yetton s normative theory of leadership really a theory of Limited theory of leadership 00 UI What is the basic idea behind Vroom and Yetton s normative theory of leadership Deciding how much subordinates should participate in the project 00 0 What is A1 All C1 C11 and CH Be able to recognize each decision making style AI Autocratic 1 Manager solves problem alone using whatever is available at the time All Autocratic 11 Manager obtains necessary information from subordinates before making decision alone CI Consultative 1 Manager shares problem with subordinates individually getting their ideas and suggestions before making decision CII Consultative 11 Manager shares problem with subordinates as a group getting their ideas and suggestions before making decision Group Participation G Manager shares problem with subordinates as a group and together they make decision 87 What two situational factors in Vroom and Yetton s normative theory of leadership determine the best decision making method for the situation Decision quality and decision acceptance 88 What is a feasible set When each problem type is associated with one or more decisionmaking methods deemed appropriate to what problem 00 O What is the minimum man hours rule and the employee development rule When do you use these rules be able to apply these rules to a feasible set This rule minimizes the time expended on a decision Applying this rule leads to the selection of the most autocratic decision when more than one alternative is present There is also the employee development rule which states that a manager should choose the most participative decisionmaking method in the feasible set Use this when time is limited and there is a lot of pressure 90 What are the problems with Vroom and Yetton s normative theory of leadership 1 There are more than five decisionmaking models 2 Should other characteristics than decisions quality and subordinates acceptance be included as questions For example work group size need for secrecy and time pressure have been suggested as being appropriate for inclusion in the model 3 Bounded rationality 7 it is possible that managers aren t sufficiently rational to apply normative theory 91 What are the basic ideas behind reciprocal theory of leadership What makes the theory reciprocal This theory has criticized other theories because they tend to ignore individual differences Those theories assume that l The subordinates are homogeneous each responds to the leader in a similar way 2 Leaders respond similarly to all subordinates These theories subscribe to an average leadership style approach What makes it reciprocal is that this theory separates leadership from supervision much like the discussion in the rst part of this outline They go on to state that the leader will choose either leadership or supervision depending upon whether the subordinate is perceived to be a member of the ingroup or the out group O N What determines whether a subordinate will be lead or supervised by his manager in reciprocal theory The leader will choose either leadership or supervision depending upon whether the subordinate is perceived to be a member of the ingroup or the outgroup In group members are perceived to be more competent more skilled and deserve greater responsibility Ingroup members are led and outgroup members are supervised 93 What has the research revealed when the manager is taught to lead the out group as well as the in group When this occurred the result was increased job satisfaction improved productivity and increased supervisory satisfaction O 5 What is the basic idea behind implicit theory of leadership We have implicit beliefs or stereotypes about personal qualities and behavior of the typical leader If they act like that it proves that they are leaders Leadership is in the eye of the beholder This approach also believes that it should be possible to demonstrate that leadership effectiveness is as much a function of the follower s perceptions as that of the leader s behavior Appearance is everything 95 What is the basic idea behind substitutes for leadership There may be sources of support that makes leadership irrelevant to employee satisfaction and performance 96 What does substitutes for leadership say about leaders receiving credit and blame Leaders sometimes receive credit and blame for their subordinate s behaviors that they don t deserve Those 39 J39 39 39 39 could be 1 39 39 J quot by the circumstances over which the leaders has little or no control O l What factors substitute for leadership making it irrelevant to subordinate satisfaction and performance 1 Experience and knowledge 2 Technology 3 Work group cohesiveness and norms 4 Job satisfaction GROUPS 98 How do formal and informal groups differ Formal Deliberately created Authority and position Specialized roles Informal Develop naturally Personal and social relations Satisfy social needs 99 What personal needs are satis ed by groups Saftey safety in numbers social friends with people in group esteem friends think you are cool and reality 100 What is a reality need You will use the other group members to test your reality to see if they are thinking the same thing The boss yells at you and you go to coworkers to see what they think to see if what you are thinking is right or now A need that uses the group to check out the validity of one s perceptions of an event Verify you feelings and perceptions 101 What are the ve stages of group development and what happens at each stage Forming ground rules are established they are still individuals accessing the situation Storming con ict with who will do what con ict among members about roles priorities and responsibilities Norming become more cohesive and set rules to go by solidarity takes place norms are established and trust begins the group Performing task performance problem solving participation focus on the task Adjouming the task is complete 102 At what stage is group cohesiveness the greatest Norming 103 At what stage is intragroup and interpersonal con ict most likely to occur Storming 104 At what stage is the group likely to make the best decisions Performing 105 Which stage is most dif cult to achieve Performing 106 What is the relationship between group size and effectiveness Upper limit to affect teamwork is 12 for extra credit As group size increases The friendliness of the group decreases Member satisfaction decreases Less participation by group members social loa ng More domination by one of a few group members Decision making and teamwork becomes more difficult Subgroupcliques form As group size increases Members more formal Action more difficult to achieve Atmosphere less friendly Freeriders 107 What is cohesiveness Refers to the desire of the group members to remain part of the group when a group has a high level of cohesiveness the group sticks to together and has a strong sense of oneness 108 What does cohesiveness have to do with a group s in uence over its members What ever the group has a whole wants the group gets The greater the cohesiveness the greater the in uence 109 What are the factors that increase and decrease cohesiveness Increase cohesiveness Small group size Winning history of success High status group External threat Severe initiation Lots of time spent together Attractive goals High public image Decrease cohesiveness Large group size Losing or group failure Poor public image Unattractive group goals Disagreeable tasksdemands Little time together 110 What are the bene ts and drawbacks of highly cohesive groups Benefits High morale job satisfaction Higher member selfesteem Greater sense of security Low absenteeism and turnover Better teamworlddecision making or coordination Drawbacks Groupthink Limited creativity 111 What is a norm A norm is a unwritten rule about how group members should behave in the group Norms can be either prescriptive what you should do or proscriptive what you shouldn t do they de ne what s acceptable and what s not acceptable Standards of behavior accepted by a group s members They de ne behaviors that are acceptable by a group s members They control behavior 112 How do norms and cohesiveness interact to determine a group s performance High cohesive group and high productivity norm high productivity High cohesive group and low productivity norm low productivity A highly cohesive group could be very bad or good There is strength in numbers Low cohesiveness and high productivity norm Average Productivity Low cohesiveness and low productivity norm Average Productivity THE ABOVE IS FROM HIS IN CLASS REVIEW High Productivity High Cohesiveness Increase in Productivity High Productivity Low Cohesiveness Moderate increase in Productivity Low Productivity High Cohesiveness Decrease in Productivity Low Productivity Low Cohesiveness No effect on productivity THE ABOVE IS FROM THE PERSON WHO DID THE QUESTIONS Final Exam Objectives from the Textbook MGMT 1 What is social loafing p 177 Social loafing behavior in which team members withhold their efforts and fail to perform their share of the work 2 What are the factors that encourage people to withhold effort in teams p 177 l The presence of someone with eXpertise Team members will withhold effort when another team member is highly qualified to make a decision or comment on an issue 2 The quot of a quot39 argument Team members will withhold effort if the arguments for a course do action are very persuasive of similar to their own thinking Lacking confidence in one s ability to contribute Team members will withhold effort if they are unsure about their ability to contribute to LA discussions activities or decisions This is especially so for highprofile decisions Equot 5 Equot 0 gt 9 4 An imnortant or 39 39 decision Team members will withhold effort by mentally withdrawing or adopting a who cares attitude if decisions do not affect them of their units or if they do not see a connection between their efforts and their team s successes or failures 5 A J r quot effort if other team members are frustrated or indifferent or if a team is 39 decision making climate Team members will withhold oundering or disorganized What s a continuous reinforcement schedule p 249 A schedule that requires a consequence to be administered following every instance of a behavior What s an intermittent reinforcement schedule p 249 A schedule in which consequences are delivered after a specified or average time has elapsed or after a specified or average number of behaviors has occurred What s a xed interval reinforcement schedule Variable interval reinforcement schedule p 249 A fixed interval reinforcement schedule is an intermittent schedule in which consequences follow a behavior only after a fixed time has elapsed A variable interval reinforcement schedule is an intermittent schedule in which the time between a behavior and the following consequences varies around a specified average What s a xed ratio reinforcement schedule Variable ratio reinforcement schedule p 249 A fixed ratio reinforcement schedule is an intermittent schedule in which consequences are delivered following a specific number of behaviors A variable ratio reinforcement schedule is an intermittent schedule in which consequences are delivered following a different number of behaviors sometimes more and sometimes less that vary around a specified average number of behaviors What is charismatic leadership p 270 The behavioral tendencies and personal characteristics of leaders that create an exceptionally strong relationship between them and their followers What s the difference between ethical and unethical charismatics p271 amp 272 Ethical charismatics charismatic leaders who provide developmental opportunities for followers are open to positive and negative feedback recognize others contributions share information and have moral standards that emphasize the larger interests of the group organization or society Unethical charismatics charismatic leaders who control and manipulate followers do what is best for themselves instead of their organizations want to hear only positive feedback share only information that is beneficial to themselves and have moral standards that put their interests before everyone else s The numbers are Charismatic leader behaviors the A is Ethical and the B is Unethical l Exercising power a used to serve others b used to dominate or manipulate others for personal gain Creating the vision N a followers help develop the vision b Vision comes solely from leader and serves his or her personal agenda 3 Communicating with followers a twoway communication seek out viewpoints on critical issues b oneway communication not open to input and suggestions from others accepting feedback 4 a Open to feedback Willing to learn from criticism b In ated ego thrives on attention and admiration of sycophants Avoid or punish candid feedback 5 stimulating followers a want followers to think and question status quo as well as leader s views b do not want followers to think want uncritical intellectually unquestioning acceptance of leader s ideas 6 developing followers a Focus on developing people with whom they interact Express confidence in them and share recognition with others b Insensitive and unresponsive to followers needs and aspirations 7 living by moral standards a Follow selfguided principles that may go against popular opinion Have three virtues courage a sense of fairness or justice and integrity b Follow standards only if they satisfy immediate selfinterests Manipulate impressions so that others think they are doing the right thing Use communication skills to manipulate others to support their personal agenda What is transformational leadership p 271 9 Leadership that generates awareness and acceptance of a group s purpose and mission and gets employees to see beyond their own needs and selfinterests for the good of the group 10 What are the four components of transformational leadership p 271 Charismatic leadership or idealized in uence 7 means that transformational leaders act as role models for their followers Inspirational motivation 7 means that transformational leaders motivate and inspire followers by providing meaning and challenge to their work Intellectual stimulation 7 means that transformational leaders encourage followers to be creative and innovative to question assumptions and to look at problems and situations in new ways even if their ideas are different from the leaders N E 4 Individualized Consideration 7 leader pays special attention to follower s individual needs by crating learning opportunities accepting and tolerating individual differences encouraging twoway communication and being a good listener 11 What is transactional leadership p 272 Leadership based on an exchange process in which followers are rewarded for good performance and punished for poor performance MANAGEMENT 3200 EXAM TWO OBJECTIVES FROM THE NOTES amp OUTSIDE READING DECISION MAKING Lquot 3 Is decision making a function of management No it s part of all functions Most closely associate with planning Why do we make decisions as managers To accomplish goals ef ciently What s the difference between programmed and non programmed decisions We program to be more ef cient 4 Programmed decisions are speci c procedures that have been developed for repetitive and routine problems Thus decisions are programmed to the extent that they are repetitive and routine and a speci c procedure has been developed for handling them N on programmed decisions are speci c to management problems that are novel and unique They are complex and unstructured Thus there is no established procedure for handling them either because it has not arisen in exactly the same manner before or because is complex or extremely important Such decisions deserve special treatment Do managers make more programmed or non programmed decisions in general Programmed it makes us more ef cient Non programmed decisions increase as you move up the managerial pyramid 5 6 What is decision making under conditions of certainty Managers know all available alternatives and outcomes associated with each 100 probability What is decision making under conditions of risk Decisions under risk are most common This condition involves a lack of complete certainty regarding the outcomes of various alternatives but an awareness of the probabilities associated with their occurrence Thus alternatives are known but outcomes are in doubt For example when you get ready to roll a die you know they are six alternatives but the outcome of the roll is n doubt It s a gamble What is decision making under conditions of uncertainty When decisions are made under conditions of uncertainty managers don t know alternatives their potential outcomes or the probability of the outcomes occurrence These decisions are the most dif cult In such situations a manager has no knowledge on which to estimate the probability of various outcomes Decisions under uncertainty generally occur in cases where there is no historical data available from which to infer probabilities or in instances that are so novel and complex it s impossible to make comparative judgments 9 3 H N H uh The most common case for this type of decisionmaking involves the introduction of new technology Which decision making condition is most common Least common Most dif cult Most common risk70100 probabilities Least common certainty7100 probabilities Most difficult uncertaintyino probabilities What is the key to making good decisions under risk The key element in decision making under conditions of risk is accurately determining the probabilities associated with each alternative How do programmednon programmed decisions and the different decision making conditions relate Programmed certainty and risk Non programmed uncertainty and risk Every programmed decision was at one point or another a nonprogrammed decision What does the traditional economic model assume about decision makers 2 assumptions 1 Managers seek to maximize bene ts or minimize costs ECONOMIC MAN 2 Managers are completely rational Under what decision making condition d0 decisions get made in the traditional economic model Certainty What does the behavioral model assume about decision makers Decisions are made under bounded rationality rather than completeisatisfying rather than maximizing How decisions are actually made What is bounded rationality What three things bound 011e s rationality Bounded Rationality you don t see everythingiyou try but it is limited Amanager s rationality is bounded by these three things 1 Limited mental capacity 2 Emotions 3 Unforseeability of future events What is satisficing How does it differ from maximizing Is it irrational Satis cing managers select the lst alternative that meets a minimally acceptable standard than going through and evaluating all the alternatives and selecting the best one Can lead to a maximizing situation but you have to get lucky and you won t know it occurred Satis cing is a heuristici it may be quite sensible considering the limits of human information processing the costs of searching for and identifying alternatives and the uncertainty of future events 16 What is a heuristic What are the advantages of and disadvantages of heuristics H l H W H O Heuristic a labor saving device a short cut a rule of thumb Advantages 0 Time savings 0 They may produce more good decisions than bad decisions 0 Makes you more efficient Disadvantages 0 We adopt heuristics often times without being aware of them They implicitly guide our judgment This can be a major drawback if we over rely on them they can lead to errors sometimes severe errors 0 Heuristics at times can lead us to faulty conclusions When heuristics lead to eirors in judgment they are called biases What is the availability heuristic What factors cause you to overestimate the frequency of an event Underestimate the frequency of an event Underestimate the frequency of an event Availability Heuristic used when managers assess the frequency of an event by the degree to which those instances of that event are easily recalled in memory Overestimate the frequency of events events that evoke emotion are vivid are recent are easily imagined and are specific will be more available in memory more easily recalled Underestimate the frequency of events events that are unemotional in nature are bland are in the distant past are difficult to imagine or are vague The easier something is to recall the more frequent it is the easier it is to recall Events that are more emotional appear to be more frequent the easier it is to recall What is the representativeness heuristic What s the problem with this heuristic Representativeness Heuristic re ects the tendency of managers to assess the likelihood of an occurrence by matching it with a preexisting category ie stereotype Problem stereotypes don t allow us to see the real personiour perceptions based on these stereotypes are biased and unfair The stereotype doesn t allow us to see the uniqueness of the individual Under what decision making conditions do decisions get made in the behavioral model Most like risk but also uncertainty What does the irrationalimplicit favorite model of decision making say about decision making The decision maker distorts the information about the implicit favorite and the other alternatives so that the positive features of the implicit favorite are highlighted Basically the decision maker distorts information and selects decision rules in order to favor their implicit favorite N p t N N N 0 N 00 This model assumes that the decision maker simply goes through the motions of generating and evaluating more alternatives as a way to justify their initial choice favorite What types of decisions are made irrationally Types of decisions that are made irrationally are ones that the decision maker has already made up their mind before hearing other arguments Also ones that go against what is proven to work Uncertaintyidecisions with little information What is the basic purpose of a brainstorming session To come up with as many ideas as possible Brainstorming focuses on quantity What are the four rules in brainstorming l Criticism is prohibited T 39 quot is 39 J fr 39 quot the more off the wall idea the better 3 Quantity is wanted don t worry about quality 4 Combination and improvement are sought Can inhibitions be totally eliminated in brainstorming sessions No Inhibition in generating creative ideas cannot be completely eliminated due to a number of factors such as nonverbal communication and power differences among members Don t want to seem stupid in front of your boss What two creativity techniques does synectics use in helping the group to generate better ideas Fantasy and Analogy What is the superhero technique Imagining you are a superhero while thinking of ideas or solutions to problem because superheros are able to do things regular people cannot It allows you to think outside the box In synectics what is the job of the facilitator Technical expert Facilitator Help generates ideas Job is to structure the problem and helps lead the discussion away from the traditional ways of thinking They help individuals overcome internal inhibitions resulting from traditional ways of perceiving and thinking They can also use the superhero technique to stimulate creativity Technical Expert Help you evaluate these ideas What s the problem with synectics As soon as you generate a solution you evaluate the idea Thus the generation of ideas and the evaluation of ideas occur together sti ing creativity It is also costly and time consuming Kerry said this would be on exam 29 What research is NGT based on This technique was inspired by research that discovered more and better ideas are discovered by several persons working aloneseparately than by the same persons working in an interacting group Thus NGT is a group in name only M O How is NGT different from brainstorming and synectics 1 Does not rely on free association of ideas 2 It purposely restricts verbal interaction H p t What in NGT does one try to eliminate to improve the decision making process Try to eliminate group process 32 What are the steps in NGT 1 79 group members familiarize themselves with the problem 2 Group members working silently and alone generate solutions 3 Share ideas in roundrobin manner 4 Evaluate the ideas in roundrobin manner 5 Vote privately ranking ideas from best to worst Discuss the outcome of the vote and vote again 33 What are the de ning characteristics of the Delphi technique It is just like NGT but the members never meet and they remain anonymous 34 What is the reasoning behind the Delphi technique Without any group interaction no group member can feel the judgment of their ideas and are not in uenced by social and psychological pressures 35 What are some problems that can be encountered when using the Delphi technique The design ofthe questionnaire this is what group members use to send in their solutions and evaluations to the problem can limit the results obtained it can be extremely time consuming even more so than the other techniques several days or weeks may elapse between steps and member interest and motivation may decline if too much time passes between steps 36 What is the stepladder technique Get rid of social loa ng and makes you reconsider ideas Step 1 2 person group Step 2 3 person group 2 original members 1 new member Step 3 4 person group 3 original members 1 new member Step 4 5 person group 4 original members 1 new member 37 What is the stepladder technique designed to prevent Promote Designed to prevent the recirculation of ideas and overlooking obvious aws Designed to promote new ideas and evaluations of current ideas What are operations research techniques What are they designed to do What kind of data do they usually require Are they an aid or substitute for managerial decision making What do managers need to think critically about when they use these techniques Are they applicable to all decisions that managers make Examples of operations research techniques are probability analysis queuing theory linear programming and simulation Operations research techniques improve the evaluation of alternatives by making the evaluation more systemic They are and aid for managerial decision making Managers need quantitative data when using this technique Only as good as the numbers they are based on quantitative data Most helpful in risk 39 5 C What is meant by the term con rmatory bias in decision making When you have found some information that mirrors my own current outlook I gravitate and associate more closely with this information as it is in tune with what I currently already believe What is the gambler s fallacy Gamblers will think it is nearly a sure thing When something goes against you so many times in a row it is bound to go in your favor this time After 10 bad hands of poker the poker player believes that he she is due for a good hand It is the mistaken belief that an event that has not occurred for some time is likely to occur in the near future Chance is commonly viewed as a selfcorrecting process in which a deviation in one direction induces a deviation in the opposite direction to restore equilibrium In fact deviations are not corrected as change unfolds They are merely diluted In making decisions do people pay more attention to descriptive qualitative information or statistical quantitative information Descriptive and qualitative information When people make judgments they often ignore relevant baserate data statistical data and make their judgments using qualitative descriptive data In making decisions people often violate the law of large numbers What does that mean Why does it occur Individuals tend to ignore the implications of sample size and tend to attribute greater stability to results obtained from small samples than is warranted People often ignore the judgment advice of others when choosing between 2 objects and substitute their own initial impression brief as the sole basis for choice because they don t recognize the importance of large numbers The larger the sample size the more reliable it is People will go with their own sample of small numbers opposed to a large sample from family and friends 43 How does the framing of a decision affect decision making Positive framing Negative framing Most people are riskaverse avoidant when the decision is framed positively in terms of gain and most people are riskseeking when the question is formed negatively in terms ofloss This occurs even when the choices are the same People nd the pain associated with losing X is generally greater than the pleasure associated with winning X When people start to lose they take more risk trying to recoup their losses Positive frame less risk Negative frame more risk ASSIGNED OUTSIDE READING QUESTIONS 54454 44 What is group decision making a function of It is a function of individual efforts plus assembly effects minus process loss GDMIndividual Efforts Contributions Assembly Effects 7 Process Losses You hope the individual contributions and assembly affects outnumber process loss 45 What is an assembly effect Process loss Assemny Effects positive consequences of bringing a group of people together such as synergy more information diverse viewpoints checking errors and substantive con ict Process Loss negative consequences such as destructive interpersonal con ict free riding or social loafing domination by a few and more time and expenses 46 What is the optimal size for a decision making group The optimal size for a group one that makes the best decisions is 57 people Preferably you should also have oddnumbered groups 5 or 7 47 What are the advantages of group decision making 0 More information is available to help solve the problem greater pooled resources 0 Evaluation is superior because you have a wide range of viewpoints This wide range of viewpoints allows a clearer view of the strengths and weaknesses of each alternative 0 Individuals who participate in decisions are more satisfied with the decision and are more likely to support it Greater acceptance leads to more commitment to the decision which in turn leads to better implementation 0 Individuals get a better understanding of the decision that is made and as a result it is easier for them to communicate the decision to their subordinates o Fulfills need for personal growth for some employees They are allowed to participate and have greater autonomy on their jobs which fulfills their need to grow through their jobs 0 Helps individuals learn new skills e g how to make a decision how to get along with other people who don t always agree with you It helps to develop conceptual and human skills It can also be perceived as being more fair than decisions made by sole individualsisets up a fairness image Because our society values democratic methods and since group decision making is consistent with those ideals group decision making may be perceived as being more fair than individual decision making An individual decision maker s complete power can create the perception that the decision was made autocratically and arbitrarily Participation in decision making also reduces stress by lowering role ambiguity ie being unclear about one is supposed to be doing on hisher job and role underutilization ie one s skills and abilities are not being on the job to their fullest potential Now individuals have a clear idea of what they are to do and what is expected of them prevents role ambiguity They also are allowed to use their skills and abilities to their fullest prevents role underutilization Overall GDM provides a greater sense of control for the employee What are the disadvantages of group decision making Takes longer than individual decision making and as a result it is costlier Since GDM is so time consuming it may inhibit management s ability to act quickly and decisively when necessary Indecisiveness groups can have a difficult time making a decision due to the natural disagreements that occur between people not to mention the power plays and office politics that often go on in organizations Domination by a few powerful members or by a leader can negate the many virtues of group processes ie decreases the level of individual contributions dampens any assembly effects that might occur and discourages open and honest discussion of solutions0 In the case of domination by a leader or by one what you really have is an individual making a decision in a socalled group Ifthe domination is by low or medium ability members the group s overall effectiveness will suffer greatly However if the domination is by high ability members ie experts the group s effectiveness will be markedly less affected Leveling effect or in other words compromise may occur group decisions often involve considerable compromise which may lead to less than optimal decisions being made Freeriders are a problem in groups As groups become larger the less effort each person puts forth This phenomenon is known as social loafng Freeriders are more likely to engage in social loafrng and are more likely to take it to an extreme They are getters who want to give little in return They provide very little to the group in terms of individual contributions and efforts With corporate power and personal pride at stake disagreements over important matters that occur in groups can often lead to bad feelings illwill and destructive con ict between group members Escalation of demands people may want to participate in things that are inappropriate for them to participate in They may want to participate in all decisions as a result of participating in some Social motives may prevail over hardheaded task orientation much time can be wasted in socializing or playing that is irrelevant to GDM 49 What is the leveling effect Group decisions often involve considerable compromise which may lead to less than optimal decisions being made It lowers quality but raises acceptability Both a process loss and an assembly effect Ul C When does a manager under what conditions use individual decision making rather than group decision making When time is limitedshort 2 When the decision maker has all the relevant knowledge and expertise to solve the problem 3 When acceptance of the decision is not an issue You are sure your employees will accept it 4 When subordinates do not get along well There might be personal con ict between them 5 When subordinates do not share the organization s goals and there is distrust between the manager and labor 51 Rank the following in terms of decision making accuracy group average individual in the group and best member in the group Group decisions will tend to be more accurate The research indicates that groups on average make better quality decisions than individuals But they are seldom better than the performance of the best individual in the group who is often not listened to 52 Which is more efficient group or individual decision making consider both short term and long term ef ciency In the shortrun individual decision making is more efficient because it takes less time and expense In the longrun group decision making may be more efficient because group decisions often leads to better implementation of the decision 0 9 Where do you have greater creativity ve individuals generating ideas alone or those salne ve individuals generating ideas as a group Research has shown that individuals working alone generate more ideas and more creative ideas than those same individuals working together as a group Ul uh Which leads to greater acceptance of the decision and better implementation of the decision individual or group decision making Group is better than individual decisionmaking in acceptance and implementation JOB DESIGN 55 erat function of management is concerned with job design and organizational design Organizing is the process by which employees and their jobs are related to each other for accomplishing organizational objectives 56 57 What are the three aspects of job design 1 A job s content major task duties and responsibilities 2 The work methods or procedures to be used in its performance 3 How it is related to other jobs in the organization and the people you work with What is skill variety Skill variety is the degree to which a job requires the employees to perform a wide range of operations in their work andor the degree to which employees must use a variety of equipment and procedures in their work Specialized jobs have low skill variety High skill variety jobs require more education more training and more experience they provide more challenge allow more creativity and give more prestige than low skill variety jobs What is task identity Task identity is the extent to which employees do an entire or whole piece of work and clearly identify with the results of their effort Specialized jobs are low in task identity because the employee only performs a small segment of the job Task identity is increased when an employee completes a job from beginning to end The ability to identify the work you have done complete a whole piece of work 59 0 H 0 N What is task signi cance Task significance is the extent to which the job and its performance exert a considerable impact on the lives of others With high task signi cance there is a feeling of accomplishment Specialized jobs are low in task signi cance What is autonomy Autonomy is the extent to which employees have a major say in scheduling their work selecting the equipment and methods they will use checking their own work quality control and deciding the procedures to be followed Autonomy is the extent to which they are allowed to make important decisions regarding their jobs JOB DEPTH What is feedback Performance feedback is the degree to which employees as they are working receive information that reveals how well they are performing on the job Feedback can come from coworkers supervisors subordinates clients or even the job itself Also feedback can come from performance appraisal awards and promotions and personal evaluations of one s own feelings What is job breadth and job depth The breadthrange of a job refers to the number of tasks that a jobholder performs Job breadthrange varies from few to many different tasks Jobs with relatively few tasks low job breadthrange are more specialized than those with many tasks high job breadthrange HORIZONTAL LOADINGS Breadth is like skill variety horizontal Depth is most like autonomy 63 64 65 The depth of a job refers to the amount of discretion that an individual has to decide job activities and job outcomes Job depth varies from little to considerable discretion in the choice of activities and outcomes Relatively little depth is characteristic of relatively specialized jobs VERTICAL LOADINGS What task characteristics is job breadth similar to Skill Variety What task characteristic is job depth similar to Autonomy What job design is least prevalent today Most prevalent today Least craftjobs Most Specializedjobs What is a specialized job and how does it load on the ve task characteristics Specialization results from the diversion of an activity into smaller task elements This division of labor leads to specialists W110 have limited area of expertise Specialized jobs are low on every job characteristic except feedback What are the advantages of specialized jobs EFFICIENCY 1 Less skilled employees can be hired because ofthe simplicity ofj ob assignments Thus you can pay them less 2 Jobs can be learned in less time thus reducing training costs 3 Constant repetition leads to an area of limited expertise which increases productivity 4 More opportunities for utilizing the primary talents of the employee 5 Work is performed quicker because the employee does not lose time shifting from one activity to another 6 Dependence on particular employee skills is minimized remember Taylor wanted employees to be interchangeable What are the disadvantages of specialized jobs 1 Low employee motivation 2 Low job satisfaction 3 Low quality job performance 4 High absenteeism 5 High turnover quitting jobs 6 Sabotage and strikes 7 Alcohol and drug abuse Quantity will stay the same Quality will decrease 69 What is the purpose of job enlargement Job enlargement is the allocation of a wider variety of similar tasks requiring the same skill level to an employee in order to make the job more of a challenge Its intent is to keep one from getting bored so quickly However these new tasks are often easily learned and do not present much of a challenge What two task characteristics does job enlargement increase J ob enlargement broadens job scopebreadth and task identity The motivational bene ts of job enlargement are short lived 0r long lived It has limited success in motivating employees The reason is that a few more similar tasks often don t provide significant challenge and stimulation Two boring tasks don t make a challenging job What is job rotation Shifting workers through a set of jobs in planned sequence What is job enrichment How is it different from job enlargement The job enrichment strategy represents a move backward toward craft jobs where employees perform a larger and more complete segment of the work This type of job design strategy may be the result of increasing educational and socioeconomic levels in society Autonomy is the main difference bw enrichment and enlargement Job enlargement is the allocation of a wider variety of similar tasks requiring the same skill level to an employee in order to make the job more of a challenge Its intent is to keep one from getting bored so quickly Job enrichment necessarily involves job enlargement but job enlargement doesn t necessarily lead to job enrichment Example form the notes you can give a person twenty more boring things to do job enlargement but it will not give the person discretion over his job Gob enrichment What are the advantages of job enrichment The intent of enriched jobs is to increase the meaningfulness of work and the experienced responsibility of work outcomes by increasing job content Jobs are enriched by allowing employees greater freedom or selfdirection and the opportunity to perform interesting and challenging work improve quality of work life QWL Bene ts of enriched jobs 1 High employee motivation 2 High job satisfaction 3 High quality job performance 4 Low absenteeism 5 Low turnover quitting job 75 What are the different aspects of the job characteristics model Don t need to know 1 Job core dimensions 2 Critical psychological states 3 Personal and work outcomes Also includes moderators that in uence the relations in the model They affect the effectiveness of j ob enrichment 76 What are the three moderators that in uence the effectiveness of job enrichment How do they in uence it With respect to moderators the model states that the high growth need strength person is more responsive to job enrichment that when people are dissatisfied with context factors such as pay supervision and company policy they are less responsive to job enrichment and that people with weak skills and limited knowledge will not be as responsive to job enrichment 77 What are the ve steps in redesigning a job so it will be enriched What happens at each step and what task characteristics are increased 1 Form Natural Work Units As much as possible individuals are grouped together to form a meaningful work unit This unit is given continuing responsibility for a body of related work or a whole piece of work The objective here is to increase the employee s feeling of ownership over their job Forming natural work units should increase task identity and task significance N Combining Tasks Combine several tasks into a larger job requiring a broader range of skills This is an attempt to increase skill variety and task identity LA Establishing Client Relationships As much as possible employees are put into contact with people who use their product or service such as customers This is designed to increase skill variety task significance autonomy and feedback 4 Vertical LoadingMost Important Step Here the gap between doing and controlling is closed The employees are given more latitude in and responsibility for their jobs This step primarily increases autonomy However it also increases all the other characteristics 5 Opening feedback channels Employees are provided with increased feedback on their performances by opening up the communication channels Primarily it s an attempt to increase performance feedback Feedback should be a continuous on going process Here you allow people to check the quality of their own work This helps them provide their own feedback which is seen as most valid type of feedback In vertical loading the person as allowed to set schedules establish work pace choose work methods develop other workers and overall problemsolve Problem solving involves troubleshooting and crisis management 78 What step in the redesign process is job enlargement Combining TasksPS I am not 100 sure on this one I O What step in the redesign process is most important Vertical Loading 80 What are the disadvantages of job enrichment 1 Some workers may not want enriched jobs place greater demands on workers 2 Workers may not have the skills necessary to perform enriched jobs training costs and difficult to train certain skills required 3 Employees may want greater extrinsic rewards such as pay due to greater responsibility 4 Results in layoffs 5 Supervisors of employees have disenriched jobs organizations may do away with supervision loss of power and evenjob loss 6 Potential benefits may not offset technological costs 7 Poor employee performance in productivity 81 How does strategy in uence job design Strategy of the organization should drive the design of jobs Different job design strategies will be needed for different strategies 82 What employee factors should be taken into consideration when designing jobs Two primary factors are ability and motivation Ability managers simply should not design jobs that require greater ability than the employee possesses Motivation should tailor the design of the job to the motivation of the employee 83 What type of motivation is best suited to specialized jobs Enriched jobs Specialized jobs ability Enriched jobs motivation 84 What is instrumental motivation Expressive motivation Instrumental motivation sees work as a means to end such as a paycheck Expressive motivation sees work as an end in itself such as wants to grow through his work or wants personal ful llment and satisfaction from the work itself 00 UI What is the Yerkes Dodson law Arousal and performance are related in what manner Some people are hypersensitive which means they need relatively little stimulation to get them to their activation level the moderate level of arousal which leads to high performance whereas hyposensitive which means they need a lot of stimulation from their external environment to achieve their activation level It s an inverted U shape where optimal performance is at the top 86 When someone is hyper sensitive to their environment What type of job design should they be given Why Specializedjob because the environment provides very little stimulation 87 When someone is hypo sensitive to their environment what type of job design should they be given Why Enriched job because it provides them with a lot of stimulation and challenge 88 How does technology affect job redesign efforts The more the design of the job is in uenced by technological factors or technology the less job design and exibility that exist 89 How do unions feel about any attempt from management to redesign jobs Unions have both direct and indirect in uences on job design Have generally resisted job design efforts see them as schemes to get more work out of fewer employees 90 How do economic factors affect redesigning of jobs Required or necessary resources may not be available to improve or redesign jobsimay not have enough money to buy a new piece of equipment or hire a job design specialist It is very expensive bc you may have to redesign the whole thing ORGANIZATIONAL DESIGN 91 What is the relationship between specialization and coordination according to the specialization coordination dilemma The more you specialize the more difficult it is to coordinate the different work units 92 Where is it more dif cult to coordinate within departments or between departments Why Between departments because different departments have different goals What is the primitiveagency organizational design What are its advantagesdisadvantages Primitive agency design has one boss and a few employees all employees report to the boss and he provides the necessary coordination thru personal supervision Each employee acts as an agent or extension of the boss who coordinates all company activities and managerial tasks Advantage exible disadvantage breaks down under conditions of complexity because of limited information Predominant during the beginning of the industrial revolution 94 What is the functional organizational design How are activities grouped Large mass production rms Groups its activities into separate units or departments in which each undertakes a distinctive functionimarketing production etc so you have specialization and a focused concentration of functional activities What are the advantages of a functional design Advantages 1 Lots of specialization provides the best development of expertise because of its emphasis on functional interest within specialized departments 2 Results in efficient use of resources because you don t duplicate specialists and you achieve economies of scale and overhead Also more efficient because of the greater focus on specialization 3 Provides a simple communication network 4 Simplifies training of functional specialists 5 Gives status to major functional areas 6 Preserves strategic control at the top management levels 7 Provides career path for specialists functional departments help reinforce and enhance development of expertise What are the disadvantages of a functional design Disadvantages 1 Coordination is achieved at higher levels of the organization This causes the coordination process to take longer The larger the number of departments the harder it is to coordinate work units 2 No common concern for the overall mission of the organization People identify with specialty not with overall tasks 3 Interdepartmental cooperation is a problem due to difficult values goals etc 4 Cost of coordination can be high 5 Employees identify with specialty which makes changes difficult 6 Preparation of broadly trained managers is limited Main type of manager developed in the functional design is a functional manager 7 Client satisfaction can be lower than with other designs because of the coordination problems associated with this design 8 Slow to respond to environmental change 9 Slow to innovate When does one use the functional design When to use it 1 When you have a stable environment 2 When you have one or a few product lines 3 When efficiency and quality are your goals 4 When the organization is small to medium in size What is the product design How are activities grouped Product design each major product line is administered through a separate and semi autonomous division Allows both responsiveness to the environment and efficient coordination of a large number of specialized units Grouped together to perform all duties necessary to produced an individual good or service What are the advantages of a product design Advantages of product design 1 Pro t centers allow you to pinpoint problems quicker because you get measures of performance in shorter time Allow you to establish responsibility for task completion responsibility is easily defined 2 It develops broadly trained managers general managers 3 It focuses on client needs and provides greater customer service and satisfaction due to its focus on product Achieves bettermore rapid coordination 4 It facilitates coordination between functions for rapid responses because individuals now identify with their product more than with their specialty 5 Shared concern for the task of the organization They identify with their product more than their specialty 100 What are the disadvantages of a product design Disadvantages of product design 1 Coordination between product areas is difficult 2 It duplicates specialists 3 Less expertise is developed than in the functional design 4 Loses economies of scale 5 A change in product line can be disastrous because the specialists shave not kept up to date in their technical areas since they were more focused on their product than their specialty 101 When does one use the product design 1 When you have a highly uncertain environment that requires rapid adaptation 2 When the organization is large 3 When the organization has multiple product lines 4 When the goals of the organizations are external effectiveness and adaptation multiple products and client satisfaction Prospector 102 What is a pro t center and what are its bene ts Each separate unit product in a product design is a pro t center Pro t centers allow you to pinpoint problems quicker because you get measures of performance in a shorter time They also allow you to establish responsibility for task completionresponsibility is easily defined 103 What is a matrix design How are activities grouped A matrix design is basically a product design overlaid onto a functional design The matrix design is structured to reap the benefits of both these designs while avoiding the disadvantages associated with each What you have in a Matrix is employees belonging to two groups a functional group and a product or project group The functional group is permanent whereas the project group is temporary once the project is competed the group is disbanded and the members retum to their functional group for reassignment to another project group 104 What are the advantages of a matrix design There are 7 advantages to the matrix design 1 Extremely exible and responsive 2 High rate of new product innovation due to interdisciplinary nature of the product teams 3 It allows you to achieve specialization without suffering great losses in coordination due to functional home and project teams 4 Establishes responsibility for all matters relating to a project through the project manager 5 Minimizes duplication of specialists 6 Integration of proj ect completion needs at lower levels where people have the right information and the expertise to complete the projectachieves coordination 7 Sets up career paths for both experts functional manages and broadly trained managers project managers This achieves specialization Functional is good at specialization but problems with coordination Use for simple Product good at coordination but problems with specialization because you duplicate departments Use for complex Matrix is good at specialization and coordination but very stressful for employees because you have multiple bosses and projects Product low tech matrix high tech but same conditions The project manager gets project done on time Specialization is ef ciency and technical expertise 105 What are the disadvantages of a matrix design There are 8 disadvantages 1 Lose command of control Top management looses control over activities 2 Multiple authority roles Unity of command principle is lost 3 Personal stress and strain due to ambiguity and reporting to two supervisors 4 Places a premium on teamwork Employees need good interpersonal skills 5 Power struggles within the organization between the functional and project managers 6 Employee allegiance is dif cult to obtain You have con ict between technical sophistication and project completion Employees have mixed identities Employees experience role con ict 7 Very expensive in terms of communication and control costs You have to have a lot of staff meetings and con ict resolution meetings to resolve problems con icts between managers and team members 8 Linestaff separation is blurred 106 When does one use the matrix design 1 When you have technologically sophisticated products or services with temporary multiple products You need experts but you have to be responsive to the environment 2 When you have a dynamic uncertain environment that exerts pressure for technical quality and different and new products 3 When creativity and innovation needs to be balanced against completion deadlines 107 What is the job of a project manager in the matrix design The project manager is responsible for the projectits completion on time within budget and according to speci cations The project manager is usually not a specialist in a technical area In matrix organizations these are people who by design are project managers Proj ecI managers are often considered entrepreneurs confronting and removing obstacles to success of project or product They are often called product champions Project managers are fairly autonomous positions that have access to the functional resources of the organization 108 What is the job of a functional manager in the matrix design The functional manager s job is to keep the employees in his department technologically up to date with regard to the area of expertise or function Functional managers are r quot39 forJ p39 andJl39 39 skilledI 39 Functional managers have vertical authority 109 Which type of manager has no formal authority in the matrix design The project manager 110 In which organizational design type is it most dif th to replace the CEO from Within the organization Why is this the case Functional design Preparation of broadly trained manager is limited The main type of manager developed is a functional manager 111 Which organizational design accommodates growth readily Product design is better able to accommodate growth than a functionally designed organizationyou just merely slap on a new division product and matrix 112 What is scalar chain or chain of command What functions does it serve What structural mechanism does one use to bypass the strict chain of command in organization Chain of command exists whenever one individual reports to or is made subordinate to another The chain of command refers to vertical authority The higher the manager s level in the organization such as top over middle or firstline the higher the manager s formal authority Chain of command accomplishes two things 1 defmes level of authority and 2 it routes directives and information up and down the organizationprovides an information decision network A gangplank is often used to bypass the strict chain of command It provides for quicker coordination Following strict chain of command problem is that it is slow Scalar chain of command is a formal communication network The more dynamic the environment the more you bypass the chain of command Bypass most in matrix least in functional 113 What is unity of command Why does one try not to violate this principle of organizing This refers to the fact that subordinates should report to one and only one boss Unity of command is violated everywhere but violated the most in matrix 114 Where is unity of command violated In what organizational design type is unity of command violate to the greatest extent Violation of this principle occurs to varying degrees in all organizations and the greatest violation comes in the matrix design 115 What is delegation of authority Why do managers delegate authority Authority is the right to exact action from others or to command Delegation is the process in which authority passes from one level to another The delegation of authority extends a manager s reach It also enables a manager to identify and utilize employee talents It empowers your employees giving them freedom to think and experiment When one delegates you are providing the employee with a chance to grow and develop You give the employee freedom to succeed 116What cannot be delegated when a manager delegates authority When managers delegate they don t reduce their accountability they remain responsible for their own actions and the actions of their subordinates You can delegate authority but not responsibility 117VVhy do managers resist delegating authority Managers are typically reluctant to delegate authority for a number of reasons 1 the manager feels like heshe lacks trained subordinates 2 the manager feels like heshe is only capable of doing the work 3 the manager may fear that the subordinates will make costly mistakes 4 the manager may fear that if the subordinate handles the task well then the subordinate could become a competitor The manager might be shown up by the subordinate 5 the manager may believe that delegating makes them look lazy 6 the manager may find that it is easier to do it themselves This is especially true when the manager has difficulty communicating directions clearly 7 the manager resists delegating for fear of losing control 118What do the terms centralized and decentralized mean as they pertain to delegation of authority Centralized is the extent to which authority isn t delegated but concentrated at higher levels of management Decentralized is the extent to which authority is delegated These are relative terms and not absolutes The functional design is centralized The product design is more centralized than functional and less than matrix The matrix design is the most decentralized 119What are the signs that one s organization is becoming decentralized You know your organization is becoming decentralized as l more decisions are made by lower levels of management 2 more important decisions are made by lower levels of management 3 more exibility is allowed for lower level managers in interpreting policies 4 more autonomy is allowed for lower level managers in decision making 120What are the bene ts of decentralized organizations Advantages of Decentralization 1 lower level managers can deal with problems on the spot 2 it provides opportunity for lower level managers to develop their decision making skills EMPLOYEE DEVELOPMENT 3 motivation of lower level managers is boosted when they re entrusted to make decisions rather than just always following orders Their jobs are enriched 4 it spreads the organization s work load out and allows top managers more time for strategic planning Increase knowledge and skills and quicker coordination 121VVhen does an organization need to decentralize Decentralization becomes necessary as an organization grows in size because coordination problems force you to make others responsibleaccountable for coordination With decentralization it allows one to be more responsive to the environment because it provides for quicker coordination 122What does span of control mean Span of control refers to the number of subordinatespeople who report directly to a supervisor A span of control can be wide or narrow With a wide span a manager would supervise many employees whereas with a narrow span a manager would supervise few 123What is the relationship between span of control and organizational height A relationship exists between the span of control and organizational height The narrower the span of control the taller the organization eg more management levels and the wider the span of control the atter the organization e g fewer management levels 124VVhat is the paradox of managerial control as it relates to span of control The paradox of managerial control with narrow spans of control is that narrow spans of control allow managers tighter control over their subordinates but this loosens overall control from top to bottom in the organization because there are now more managerial levels The result of narrow spans of control and hence more levels of management is a greater distortion of communication traveling up and down the scalar chain in the organization These successive management levels act as filters in the communication process Therefore in an organization where there are narrow spans of control top management has less control over lower levels of management 125What are the advantages and disadvantages of wide spans of control Advantages of wide spans of control can lead to substantial payroll savings by eliminating managerial jobs downsizing and it can improve overall communication from the top to the bottom of the organization Disadvantages of wide spans of control can decrease managerial control and supervisor subordinate communication on each managerial level It also can increase career gridlock this at organizational design leaves little chance for moving up because you have eliminated management levels and there are less opportunities for advancement in a at structure thus promotionspay increases are slower Also in a at structure managerial workload is increased which can be more stressful because you are overloaded 126What is the optimal span of control There is no optimal span of control 127What are the factors that narrow span of control Widen span of control Anyt1ing that gives the manager more time is going to increase span of control As employee need more timehelp from manager that narrows span of control EXAM 2 OBJECTIVES FROM THE TEXTBOOK MGMT Chapter 5 Planning and DecisionMaking 1 What is devil s advocacy p 93 Devil s Advocacy is a decisionmaking method in which an individual or a subgroup is assigned the role of critic 2 What is electronic brainstorming p 94 Electronic Brainstorming is a decision making method in which group members use computers to build on each others ideas and generate many alternative solutions 3 What has research revealed concerning the effectiveness of electronic brainstorming as compared to face to face brainstorming p 94 Studies show that electronic brainstorming is much more productive than face to face brainstorming 4 person EB groups produce 25 50 more ideas than 4 person regular brainstorming groups and a 12 person EB group produce 200 more ideas than regular groups of the same size Because production blocking is not a factor the number and quality of ideas generally increase with group size 4 What problems does electronic brainstorming overcome p 94 V39 the J39 39 39 A with face to face Electronic Brainstorming m brainstorming The rst disadvantage that EB overcomes is production blocking which occurs when you have an idea but have to wait to share it because someone else is already presenting an idea to the group During this short delay you may forget your idea or decide that it really was not worth sharing With EB this does not happen everyone is at a computer so everyone can type ideas in when ever they occur There is no waiting your turn to be heard by the group The Second disadvantage that EB overcomes is evaluation apprehension that is being afraid of what others will think of your ideas With EB all ideas are anonymous When you type in your idea and hit the Enter key the computer does not put your name the group only sees the idea Also the computer puts them up at random What are the disadvantages of electronic brainstorming p 94 An obvious problem is the expense of computers networks software and other equipment The cost will continue to drop and Electronic Brainstorming will become cheaper Another problem is that the anonymity of ideas may bother people who are used to having their ideas accepted by virtue of their position The third disadvantage is that outgoing individuals who are more comfortable expressing themselves verbally may nd it difficult to express themselves in writing And nally the most obvious problem is that participants have to be able to type Those who can not type or those who type slowly may be easily frustrated and nd themselves at a disadvantage to experienced typists Chapter 9 Designing Adaptive Organizations 6 gt1 9 What is the customer depaltmenta zation p 158 Customer Departmentalization organizes work and workers into separate units responsible for particular kinds of customers What s the primary advantage of customer departmentalization p 158 The primary advantage of customer departmentalization is that it focuses the organization on customer needs rather than on products or business functions Furthermore creating separate departments to serve speci c kinds of customers allows companies to specialize and adapt products and services to customer needs and problems VVhat s the primary disadvantage of customer departmentalization p 158 The primary disadvantage of customer departmentalization is that like product departmentalization it leads to duplication of resources Furthermore as with product departmentalization it can be dif cult to achieve coordination across different customer departments Finally the emphasis on meeting customers needs may lead workers to make decisions that please customers but hurt the business 5 What is the geographic departmentalization p 158 Geographic departmentalization organizes work and workers into separate units responsible for doing business in particular geographic areas H O What s the primary advantage of geographic departmentalization p 159 The primary advantage of geographic departmentalization is that it helps companies respond to the demands of different markets This can be especially important when the company sells in different countries Another advantage is that geographic departmentalization can reduce costs by locating unique organizational resources closer to customers What s the primary disadvantage of geographic departmentalization p 159 The primary disadvantage of geographic departmentalization is that it can lead to duplication of resources Also even more than with the other forms of departmentalization it can be dif cult to coordinate departments that are literally thousands of miles from each other and whose managers have very limited contact with each other N What is a mechanistic organization When does it work best p 167 Mechanistic Organization is an organization characterized by specialized jobs and responsibilities precisely de ned unchanging roles and rigid chain of command based on centralized authority and vertical communication LA What is an organic organization When does it work best p 167 Organic Organization is an organization characterized by broadly de ned jobs and responsibility loosely de ned frequently changing roles and decentralized authority and horizontal communication based on task knowledge 4 What is the key difference between mechanistic and organic organizations p 167 168 The key difference between these approaches is that whereas mechanistic organizational designs focus on organizational structure organic organizational designs are concerned with organizational process the collection of activities that transform inputs into outputs valued by customers Thank you to everyone that helped out with this study guide On my part I basically typed word for word from the book I did not want to leave anything out that you may need Dominique MANAGEMENT 3200 EXAM ONE OBJECTIVES FROM THE NOTES amp ASSIGNED READINGS INVITATION TO MANAGEMENT l N E 4 V39 0 gt1 What is management Process of achieving desired results through the efficient utilization of human resources probably What are the 2 key concerns of management Effectiveness and Efficiency What is effectiveness concerned with efficiency Effectiveness achieving goals giving customer what they want when they want it Efficiency minimizing wastes and resource costs How are effectiveness and efficiency related If I disregard efficiency effectiveness is easy to achieve As I become more concerned with efficiency effectiveness is more difficult to achieve Just because I am efficient that doesn t automatically make me effective Most businesses who are efficient are also effective but it is not a guarantee What is your important resource as a manager Peopleiknow inj ellitance Is management art or science When is it considered a science an alt Both Management as an academic discipline is a science As a practice it s an a know equifinality How did management become important and why is it still significant today Before the Industrial Revolution things were produced by skilled laborers After the skills were transferred from the craftsmen to the machine This creates the need for professional manager Skill of laborer goes down which creates division of labor which creates the need for professional management What was the basic change in the industrial revolution The transfer of skill from the craftsmen to the machine leading to an unskilled laborer who needs to be supervised What happened to productivity supply prices and demand as a result of the industrial revolution Productivity goes down prices go up demand goes up What was the pivotal event of our time according to Drucker The switch from ownermanager to professional manager Why do most businesses fail Poor management What does a firstline manager do What are the names associated with lstline management First line managers make sure the plans developed by top and middle management are carried out by the workers They are caught between labor and management They are the only managers not to supervise other managers Firstline managers concern is efficiency Names foreman supervisor assistant manager 13 What does a middle level manager do What are the names associated with middle level manager Interpret and Integrate They take top mgt plans and interpret them into first line mgt plans They bring together first line managers and their workgroups Namesidepartment chair regional sales manager plant manager 14 What is corporate downsizing What happens in corporate downsizing What level of management is most adversely affected An efficiency strategy associated with cutting the fat or cutting the costs First thing that happens is management levels are eliminated typically middle level Then managers that remain are asked to do more Then staff management jobs are farmed out Computer and information technologies are also implemented which is a substitute for middle management Survivor Syndrome People who survive downsizing experience anxiety and depression which decreases productivity 15 What does a top manager do What are the names associated with top management They determine what business you will be in and how to compete in that business strategic planning and legitimize the organization to society Names CEO President 16 What is the difference between a line manager and a staff manager A line manager deals only with activities that directly affect the production process They have the authority to make decisions and they do not have to follow the staff manager s advice They can be first middle or top managers A staff managers is there for support and guidance of the line managers These are middle managers and are not in the chain of command 17 What is the difference between a functional manager and a general manager A functional manager manages one area of activity A general manager manages many areas of activity The general increases in frequency as you move up the pyramid This job is more difficult 18 What is the difference between an administrator and a manager An administratoripublic not for profit A manageriprivate for profit Both are managers just within different organizations 19 What are the five functions of management Be able to identify and describe the five functions of management POSLCiplanning organizing staffing leading and controlling Top Middle and first managers perform ALL of these 20 What does quotplanning has primacyquot mean It is the first step and it gives direction to all the other management functions 21 What are the three aspects of controlling N 4 N O Monitor performance compare actual results with hoped for results feedback Another namefeedback What are the siamese twins of management Flaming and controlling What is are the most important functions for a lStline manager Middle manager Top manager 151 line staffing and leading Middle organizing Top planning What are three managerial roles Mintzberg identi ed Be able to identify each role Interpersonal interacting with other people Informational gained from the interpersonal Decisional made by information These give you authority which gives you status which gives you more interpersonal relationships and information which helps you make better information What gives rise to the three managerial roles according to Mintzberg Authority and status What are three managerial skills identified by Katz Be able to identify each skill Technical ability relating to a method process or procedure expertise Human communication and people skills empathy and self awareness Conceptual problem solving seeing the big picture At what level of management are conceptual skills most important Technical skills Human skills Top conceptual human First technical What skill is most difficult to develop Why Conceptual because you need to be relatively smart and you need experience to develop this skill According to Luthansl988 are effective managers successful managers in general Effective managers are not successful What percent of effective managers are successful 10 Promotions are not based upon performance On what activity do effective managers spend the majority of their time Successful managers Effectiveicommunication Successfulinetworking Effective managers manage down Successful managers manage up What is the primary difference between derailed executives and executives who made it to top management according to the Center for Creative Leadership Derailed execs were insensitive to other people ENVIRONMENT OF MANAGEMENT 33 What are the three basic characteristics of an open system You have input transformation and output Inputs are your raw materials and resources Transformation is the production process Output is your goods and services You are open to environment on both sides which gives you two major dependenciesisuppliers and customers 34 What is the cyclical nature of the nature transformation process Negative entropy Buffering the technical core Role differentiation and specialization Synergy Equifinality Cyclical Nature Suppliers and customers are equally important because everything in the cycle is connected It is a feedback loop Controlling function Negative Entropy Trying to turn around and stop decay by bringing in new people ideas plans etc Buffering Technical Core Buffering production from threatening environmental changes Role differentiation and specialization As an organization becomes bigger the roles become more specialized Synergy Teamwork The different aspects of your business working together to make one another better Equifinality Many roads to success There many different ways to compete in the same environment 35 What are the five subsystems of an organization What functions do each subsystem perform 0 Boundary Spanning input and output deals with the external environment customers and suppliers purchasing and salesmarketing 0 Production transformation buffering the technical core internal focus 0 Adaptive helps you adapt to the environment marketing research RampD engineering internal changesie icient external changesi effective 0 Maintenance smooth operation and upkeep of the organization internal focus efficiency focus 0 Managerial top and middle management only planning external and organizing internal legitimizes organization to society 36 What are the two major dependencies in the external environment What is the threat to these 2 major dependencies o Suppliers and customerscompetition 37 How do customers in uence organizations and how do organizations in uence customers 0 A customer is powerful if they have many places to buy from and they make big purchases from you They can make you drive down prices and improve quality and service As organizations we in uence customers by advertising and market research and joint product service focus Quality is de ned by the customers 0 Value innovation innovating on what the customer wants 38 How much more does it cost to nd a new customer than to keep an old one according to Total Quality Management estimates 5 times as much 39 How do suppliers in uence organizations and how do organizations in uence suppliers ie 3 ways to establish and maintain a positive relationship with suppliers To establish and maintain a positive relationship with suppliers you vertically integrate buy them up long term contracts so prices won t go up too much and reduce the number of suppliers to 2 or 3 Vertical integration backward is buying the supplier Vertical integration forward is buying the customer 0 40 What is the law of the marketplace Organizations unable to compete will be forced to change their product lines or else die out 41 What are the ve forces of competition and how does each in uence the level of competition within an industry Rivalry among organizationsmore competition with mature low growth can make you lower prices and improve quality which cuts into market share and pro tability threat of new entrants makes rivalry and power of customer go up makes product supply go up which makes prices go down you jockey by price quality service advertising depends on barriers to entry high threat is lowilow threat is high power of customer a customer is powerful when they have many places to buy and they make big purchases from you they can cut into your bottom line pro tability power of suppliers a supplier is powerful when they are the only ones you can buy from and they have many customers when you need the supplier and they don t need you a powerful supplier can jack up the prices lower quality deliver late which cuts into pro tability and market share threat of substitutes same effect as new entrants the result of technological innovation if it is really good you will permanently lose customer and you can possibly go out of business increases competition and promote product obsolescence law of marketplace compete with lower prices 42 What are the barriers to entry into an industry 1 Capital req 2 Startup costs 3 Gov t regulations 4 Brand loyalty 5 Distribution channels 6 Cost advantages of existing companies 43 What happens when a new entrant comes into the marketindustry 0 makes rivalry and power of customer go up makes product supply go up which makes prices go down you jockey by price quality service advertising depends on barriers to entry high threat is lowilow threat is high 44 What determines if a supplier is powerful Customer 0 45 How do powerful suppliers and customers in uence organizations 0 46 How do substitutes affect an industry 0 47 What are process and product innovations What is the focus of each 0 Product external innovation effectiveness oriented 0 Process internal innovation efficiency oriented 0 These increase competition and can promote product obsolescence 0 Like the threat of subs 48 What are the general effects of technology on an industry 0 Increased competition and product obsolescence 49 How does the economy in uence an organization 0 It in uences it indirectly It affects demand 0 In a recession Markets start to contract Competition increases which causes weaker companies to be forced out o If we have an expansion the markets expand and new companies come in 50 What are the four ways that government in uences organizations 0 Gov t regulations both a threat and opportunity to businesses 0 Gov t taxation and subsidies taxes can encourage discourage business subsidies encourage business 0 TIF tax incremental financingicabelas and bass pro they take the future sales proceeds to pay back the bonds they gave them as incentives to locate in that area 0 Gov t competition gov t directly competes against privately held companies 0 ExamplesiUSPS Bus industry 0 Gov t economic policies supply creates its own demand 51 What is the shadow bureaucracy 0 There are federal agencies that are created to oversee dept activities in an organization 52 What are the three ways organizations in uence government 0 Lobbying 0 Direct Political Action 0 Voting campaigning 0 Illegal Activity o Bribery incriminating photos 53 What is a PAC What are the limits regarding PAC contributions to campaigns 0 Political Action Commitees made up of employees and shareholders of the company They make contributions to the PAC and they contribute to the campaign 0 Direct Contribution Limit 5000 0 Indirect Contribution Limit there is none soft money 54 How does society in uence business Business in uence society 0 If society doesn t see you as legitimate they will try to drive you out of business Stay on top and show you are in touch with societal issues 55 How does the international component of the environment in uence organizations 0 Both a threat foreign competition and an opportunity doing business in a foreign marketplace 56 What is environmental scanning How is it related to planning and organizational performance 0 Gathering info about changes in the environment and threats and opportunities You use this to plan to avoid threats and jump on opportunities The more you scan the more you plan and performance goes up PLANNING 57 What are the three purposes of planning 0 Fundamental to help establish and achieve goals 0 Offensive exploit opportunities in the environment 0 Defensive avoid threats in the environment 58 Why is planning important It helps you succeed but it is not a guarantee It helps you cope with change Forewamed is forearmed contingency planning It gives you unity and direction It helps you develop management 0 It helps you evaluate performance 59 Why do managers resist planning 0 Reason this question out 60 What is Gresham s law ofplanning o The tendency for the day to day problems to overshadow the planning problems Managers want to plan but they have a priority problem Take the planning problems first and then over time the day to day problems will lessen 61 What does the nonplanner typically blame for hisher poor performance 0 Bad luck external locus of control What are the five phases of the planning process and what happens at each phase 0 Establish objectives 0 Develop premises forecasting 0 Decision making 0 Implementing a course of action 0 Evaluating the course of action What provides the basis for Phase 1 Establishing Objectives 0 Environmental scanning goals faced on offense and defense What are SMART goals 0 Specific what and when it is designed o Measurable measure your progress in relation to the goal 0 Achievable yet challenging 0 Relevant important 0 Trackable keep track of your progress What is contingency planning What are the benefits and drawbacks o What if planning It is most important in a dynamic environment 0 Having multiple forecasts with different plans 0 Proactive yet expensive and time consuming 0 Many of the plans you won t even use What are the keys to effective implementation of a plan 0 Tie it to the budgetary system resources 0 Communicate your plan effectively 0 What Why and How 0 We reward and motivate people to implement the plan 0 o Involve them in the planning process What function of management is Phase 5 Evaluating Results 0 Controlling What is the basic dilemma in planning 0 As we become more committed we become less exibile What are the different failures to avoid in planning Be able to identify 0 Reason it out o Delegating in exible environment key line manager is being left out What is the crystal ball syndrome Cureall syndrome Persian messenger syndrome 0 Crystal ball you believe planning is merely about predicting the future and that s all you should do to be successful You are only developing the plan and neglects steps 4 and 5 o Cure all you believe planning is a cure all When it doesn t you don t plan and you go back to being reactive o Persian messenger you get mad at the person who brings you the information As a result people don t bring you information It affects evaluating results or controlling most directly STRATEGIC PLANNING 71 What is the focus of strategic planning 0 Maintaining a positive long term relationship with your external environment 0 Top management s job 72 What are the four components of a wellthought out strategy Be able to identify 0 Scope how many different markets you are in 0 Resource Deployment how to spend your money to achieve goals 0 Distinctive Competence the strength that sets you apart competitive advantage 0 Synergy di erent aspects of your organization should complement one another teamwork 73 What is corporate strategy and business level strategy 0 Corporate the businesses you want to own one 0 Business Level how you compete in each business many 0 The goal of both strategies are market share and profitability 74 What are the four elements of strategy formulation and what does each element consist of I Analysis of the mission statement 0 strategy and objectives must direct effort toward the accomplishment of the organization s basic mission and overall purpose I Analysis of the internal environment 0 strategy should build upon the strengths and minimize the weaknesses of the organization 0 an organization should be aware of its strengths so it can fully capitalize on the opportunities that exist in the environment Otherwise you may waste or miss an opportunity or choose an action that leads to less success or perhaps even failure 0 an organization should also be aware of its weaknesses Unless and organization is aware of its weaknesses it may be unprepared to deal effectively with and counter unexpected environment threats 0 Analysis of the external environment I strategy should help the organization avoid the threats and exploit the opportunities in the external environment 0 Analysis of the corporate culturemanagerial value system I The managerial value system affects the implementation of the strategy I If strategy isn t consistent with the managerial value system implementation will suffer Since values change slowly then strategy must change slowly to minimize resistance to change If an organization needs a radical strategic change then top management typically must be replaced 75 What are bene ts of a mission statement 0 They provide a target for your strategic plans 0 They provide a source of motivation for your employees 0 They provide legitimacy to the organization 76 What is a SWOT analysis 0 This is a strengths weaknesses opportunities and threats analysis It s a combination of your internal and external analyses The outcome of this analysis ideally should be an internal strength distinctive competence matched with an outside opportunity This situation should allow you to gain market share Worst case scenario is inside weakness matches up to outside threat In this case if you re unable to turn your weakness into a nonweakness or strength you may face the law of the market place 77 What is the goal of the Business Portfolio Matrix Approach 0 To own the mix of businesses that max pro tability and market share 78 What levels of strategy does the Business Portfolio Matrix Approach deal with 0 Corporate business portfolio and business level matrix 79 How are SBUs classi ed in the Business Portfolio Matrix Approach 0 New Venture and STAR have the greatest potential to gain you more market share 0 Look at notes picture of the matrix 80 What business strategy is used for a cash cow Star Dog New Venture 0 Cash Cow stable growth strategy 0 goal is pro tability to make money save it Star growth strategy goal is market share to make money spend it Dog strategy depends on its pro tability if not divest if it is retrench or downsize New Venture strategy depends on it s forecast o Starigrowth strategy 0 Dogidivest strategy 81 What is the basic idea behind Generic Strategies 0 You can use any of these three 82 What are the three Generic Strategies identi ed by Porter Be able to identify 0 Differentiation 0 Overall cost 0 Focus 83 What is the basic idea behind the Adaptation model of strategy 0 Your strategy has to be adapted to the environment so it will take advantage of opportunities and threats We align through the environmental scan 84 What is a defender Prospector Analyzer Reactor When is a defender strategy the best Prospector Analyzer Reactor 0 Defender Cash Cow o Env Scan demand for product is stable 0 Compete by overall cost leadershipstable growth strategy 0 Produce by efficient production 0 They organize by lots of rulesregulations o Prospector STARNew Venture o Env Scan demand for product is growing 0 Compete by market growth strategy 0 Produce by exible production 0 They organize with not a lot of rulesregulations o Analyzer New Venture Star Cash Cow 0 Combination in name only 0 Defender and Prospector division that never mix 0 If you miX the two you get a failure 0 Reactor Dog but not all dogs are reactors 0 Strategy is always changing As a result performance goes down 85 How does each strategy type in the Adaptation Model answer the entrepreneurial engineering and administrative questions 0 86 How are the strategies in the Business Portfolio Matrix Approach and the Adaptation Model of Strategy related to one another ASSIGNED OUT SIDE READINGS 87 What does the article When competitive advantage is neither say about competitive benchmarking as a strategy 0 It doesn t make you much better It gives you small gain in market share and profitability You should do value innovation instead innovation on what the customers want 88 What does the article Avoid pricing yourself short say about competing on price as a strategy for attracting customers 0 When you lower your price to attract new customers it says your original price is too high It makes them think you are lying about quality and service Price sensitive switchers are not loyal customers Out of quality price and service you can only have two Price is an indication of quality 89 Questions from the Business Week article What s in a Phrase A What did Emergence s second annual slogan study reveal 0 Most people don t pay much attention to slogans B What s the simple lesson regarding slogans C What are the three rules in sloganmaking
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