Management Test 2 - Flashcards

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______: setting goals and deciding how to achieve them; coping with uncertainty by formulating future courses of action to achieve specified results

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Planning

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Planning and ____ _____ are used in conjunction

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Strategic Management

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_____ ______ is a process that involves all managers - top, middle, and first-line - in the formulation, implementation, and execution of strategies and strategic goals to advance the purposes of the organization

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Strategic management

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Planning covers not only strategic planning (done by top managers) but also ____ planning (middle managers) and ____ planning (first-line managers)

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tactical; operational

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Planning steps: 1. Establish the organization's ____ ; ____ 2. Formulate the ____ _____ 3. Formulate the ____ plans, then the ____ ; ____ plans 4. ____ the strategic plans 5. ____ the strategy

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mission and vision; grand strategy; strategic, tactical and operational; Implement; Control

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Planning requires you to set aside the ___ to do it

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time

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You may have to make some decisions without a lot of time to __

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plan

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• 4 benefits of planning: o Helps you check your____ o Helps you coordinate ____ o Helps you think ____ o Helps you cope with ____

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progress; activities; ahead; uncertainty

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___ ; ___ suggest that organizations adopt on of the 4 approaches when responding to uncertainty in their environment.

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Miles and Snow

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____: "Lets stick with what we do best, avoid other involvements"

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Defenders

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- Expert at producing and selling narrowly defined products/services - Often old-line successful enterprises - Do not like to seek opportunities outside their present markets - Devote most of their attention to making refinements in their existing operations, such as slashing prices

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Defenders

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_____: "Let's create our own opportunities, not wait for them to happen"

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Prospectors

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- Focus on developing new products/services and in seeking out new markets, rather than waiting for things to happen - Examples: Apple, Gap

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Prospectors

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____: "Let others take the risks of innovating, and we'll imitate what works best"

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Analyzers

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Analyzers:

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- Let other organizations take the risks of product development and marketing, then imitate (or slightly improve) what seems to work best - Microsoft has been accused of taking this approach

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_____: "Lets wait until there's a crisis, then we'll react

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Reactors

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Reactors

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- Passive and reactive - Make adjustments only when finally forced to by environmental pressures

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___ ___ ___: portrays businesses as continuously cycling through decisions about 3 kinds of business problems: (1) entrepreneurial - selecting and making adjustments of products and markets, (2) engineering - producing and delivering the products, (3) administrative - establishing roles, relationships, and organizational processes

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The adaptive cycle

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Miles and Snow also introduced the ____ ____.

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Adaptive cycle

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___ ____: "what is our reason for being?"

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Mission statement

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___ ____: "what do we want to become?"

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Vision statement

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___ _____: done by top managers for the next 1-5 years

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Strategic planning

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____ ____: done by middle managers for the next 6-24 months

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Tactical planning

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____ ____: done by first-line managers for the next 1-52 weeks

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Operational planning

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___: the organizations' purpose or reason for being

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Mission

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Determining the ___ ____ is done by the top managers and board of directors

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mission statement

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____ ____: expresses the purpose of the organization

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Mission statement

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____: a long-term goal describing what the organization wants to become; it is a clear sense of the future and the actions needed to get there

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Vision

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After developing the mission statement, ___ managers need to develop the vision statement

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top

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____ ____: expresses what the organization should become, where it wants to go strategically

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Vision statement

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o _____ Planning • Top management • Determining what the organization's long-term goals should be for the next 1-5 years with the resources they expect to be available • Should communicate not only general goals about growth and profits, but also ways to achieve them

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Strategic

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o ____ planning • Middle management • Determining what contributions their departments or similar work units can make with their given resources during the next 6-24 months

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Tactical

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o _____ planning • First-line management • Determining how to accomplish specific tasks with available resources within the next 1-52 weeks

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Operational

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____: also known as an objective, is a specific commitment to achieve a measurable result within a stated period of time

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Goal

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Like planning, ____ are of the same 3 types (strategic, tactical, operational)

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goals

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Also like planning, goals are arranged in a hierarchy known as ___-____-____: because in the chain of management (operational, tactical, strategic) the accomplishment of low-level goals is the means leading to the accomplishment of high-level goals or ends

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means-end-chain

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____ ____: defined the course of action needed to achieve the stated goal; such as a marketing plan or sales plan

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Action plan

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___ ____: typically designed for a 1 year period, defines how you will conduct your business based on the action plan; it identifies clear targets such as revenues, cash flow, and market share

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Operating plan

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_____ plans: developed for activities that occur repeatedly over a period of time

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Standing

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_____: a standing plan that outlines the general response to a designated problem or situation

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Policy

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_____: a standing plan that outlines the response to particular problems or circumstances

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Procedure

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____: a standing plan that designates specific required action

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Rule

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____ ____ plans: developed for activities that are not likely to be repeated in the future

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Single-use

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_____: a single-use plan encompassing a range of projects or activities

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Program

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____: a single-use plan of less scope and complexity than a program

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Project

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___ goals: is one that is specific, measurable (quantifiable), attainable, results-oriented, and has target dates

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Smart

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____ ___ _____: a four-step process in which (1) managers and employees jointly set objectives for the employee, (2) managers develop action plans, (3) managers and employees periodically review the employee's performance, and (4) the manager makes a performance appraisal and rewards the employee according to results

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MBO (Management By Objectives)

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The purpose of MBO is to ____ rather than to control subordinates

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motivate

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1. ____ ____ ____: a. Important to have back and forth negotiation to make the objectives practicable b. This practice impels people to set more difficult goals

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Jointly set objectives

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3 types of objectives: i. _____ Objectives: • Purpose: express performance to be accomplished in a specific way for a specific area ii. ___ _____ Objectives: • Purpose: express personal goals and to be realized iii. _____Objectives: • Purpose: express the intention to maintain performance at previously established levels

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Improvement; Personal Development; Maintenance

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2. ____ ____ ____: a. Once objectives are set, managers at each level should prepare an action plan for attaining them b. May be prepared for both individuals and for work units, like departments

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Develop Action Plan

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3. ____ ____ ____: a. You and your manager should meet reasonably often, either informally as needed or formally every 3 months - to review progress b. During each meeting, managers should give employees feedback, and objectives should be updated or revised as necessary

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Periodically Review Performance:

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4. ___ ____ ____and Rewards: a. At the end of the 6 or 12 months, you and your subordinate should meet to discuss results, comparing performance with initial objectives b. Performance that meets the objectives should be rewarded

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Give Performance Appraisal

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• For ___ ____ ____ to be successful, the following three things have to happen: 1. Top management must be committed 2. It must be applied organization-wide 3. Objectives must "cascade"

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Management By Objectives

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____: objectives are structured in a unified hierarchy, becoming more specific at lower levels of the organization

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Cascading

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• The Importance of ____: o Great motivator o Can help concentrate the mind, so that you make quick decisions rather than put them off o Help you ignore extraneous matters in favor of focusing on what's important o Provide a mechanism for giving ourselves feedback

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Deadlines

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• The 2 ____ Steps: o Make the plan o Carry out the plan

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Planning

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• The 2 _____ Steps: o Control the direction by comparing the results with the plan o Control the direction in 2 ways: • By correcting deviations in the plan being carried out, or • By improving future plans

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Control

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____ _____: a document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring success

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Business plan

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Evidence suggests that firms with formal _____ plans are the ones that are more apt to survive

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business

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_____: a large-scale action plan that sets the direction for an organization o An educated guess about what must be done in the long term in order to survive o Should be revisited about every year or two

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Strategy

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_____ _____: a process that involves all managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals

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Strategic Management

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_____ _____: determines not only the organization's long term goals for the next 1-5 years regarding growth and profits, but also the ways the organization should achieve them

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Strategic Planning

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Why Strategic Management & Planning are Important: 1. Providing ____ & _____: a. Can help people focus on the most critical problems, choices, and opportunities b. Poor ______ usually results from faulty assumptions about the future, poor assessment of an organization's capabilities, ineffective group dynamics, and information overload 2. Encouraging ____ ____ 3. Developing a ____ ____ advantage:

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direction and momentum; planning; new ideas; sustainable competitive

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3. Developing a sustainable competitive advantage: a. Occurs when an organization is able to get and stay ahead in 4 areas: i. In being _____ to customers ii. In _____ iii. In ____ iv. In _____

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responsive; innovating; quality; effectiveness

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_____ _____: attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company

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Strategic positioning

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1. Strategy is the creation of a unique and valuable position: a. Few needs, ____ customers: i. Ex: Jiffy Lube provides only lubricants, but provides them to all kinds of people with all kinds of motor vehicles b. ____ needs, few customers: i. Ex: Bessemer Trust targets only very wealthy clients c. Broad needs, ____ customers: i. Ex: Carmike Cinemas operates only in cities with populations of fewer than 200,000 people

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Many; Broad; many

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Strategy requires ____ ____ in competing: a company has to choose not only what strategy to follow, but which one not to follow

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trade-offs

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Strategy involves creating a ____ among activities:

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"fit"

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___ has to do with the ways a company's activities interact and reinforce one another

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"Fit"

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Does Strategic Management Work for Small as Well as Large Firms?

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Yes

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1. Establish the mission and the vision 2. Establish the grand strategy with environmental scanning 3. Formulate the strategic plans 4. Carry out the strategic plans 5. Maintain strategic control

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Five Steps of the Strategic Management Process

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a. Characteristics of a good mission statement: The ____ & ____ for being should be included

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purpose and reason

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b. Characteristics of a good vision statement: i. Should be _____/inspiring ii. Should stretch the organization and its employees to achieve a desired future state that appears ____ its reach

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positive; beyond

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_____ _____: after an assessment of current organizational performance, then explains how the organization's mission is to be accomplished

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Grand strategy

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b. 3 common grand strategies: i. ____ strategy: a grand strategy that involves expansion - as in sales revenues, market share, number of employees, or number of customers (or for nonprofits, clients served) ii. ____ strategy: a grand strategy that involves little or no significant change iii. _____ strategy: or a retrenchment strategy, is a grand strategy that involves reduction in the organization's efforts

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Growth; Stability; Defensive

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3. Formulate the ____ _____ a. Should communicate not only what the organization's general goals about growth and profits but also info about how these goals will be achieved b. ____ _____: the process of choosing among different strategies and altering them to best fit the organization's needs c. Porter's competitive forces and strategies technique used

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strategic plans; Strategy formulation

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4. Carry out the strategic plans a. Strategy implementation b. ____ managers sell the plans to middle and supervisory managers

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Top

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5. Maintain strategic control a. ____ ____: consists of monitoring the execution of strategy and making adjustments, if necessary b. To keep a plan on track: i. Engage people ii. Keep it simple iii. Stay focused iv. Keep moving

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Strategic control

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_____ _____: gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately

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Competitive Intelligence

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o Ways to gain ___ _____: • Public prints and advertising, investor information, informal sources

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Competitive Intelligence

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____ ____: (a.k.a. situational analysis); is a search for the strengths, weaknesses, opportunities, and threats affecting the organization

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SWOT Analysis

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_____ _____: careful monitoring of an organization's internal and external environments to detect early signs of opportunities and threats that may influence the firm's plans

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Environmental scanning

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o ____: the skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission • Inside matters • Could be work processes, organization, culture, staff, product quality, production capacity, image, financial resources and requirements, service levels, other internal matters

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Strengths

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____: the drawbacks that hinder an organization in executing strategies in pursuit of its mission • Inside matters • Could be in the same categories as the strengths: work processes, organization, culture, etc.

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Weaknesses

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_____: environmental factors that the organization may exploit for competitive advantage • Outside matters • Could be market segment analysis, industry and competition analysis, impact of technology on organization, product analysis, governmental impacts, other external matters

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Opportunities

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____: environmental factors that hinder an organization's achieving a competitive advantage • Outside matters • Could be in the same categories as opportunities

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Threats

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_____: a vision or projection of the future o Trend analysis o Contingency planning

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Forecasting

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____ ____: a hypothetical extension of a past series of events into the future

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Trend analysis

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_____ ____: (a.k.a. scenario planning/analysis); the creation of alternative hypothetical but equally likely future conditions

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Contingency planning

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• Porter's Five _____ _____: o Porter's model for industry analysis: that business-level strategies originate in five primary competitive forces in the firm's environment: i. Threats of new entrants ii. Bargaining power of suppliers iii. Bargaining power of buyers iv. Threats of substitute products or services v. Rivalry among competitors

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Competitive Forces

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____ ____ _____: is to keep the costs, and hence the prices, of a product or service below those of competitors and to target a wide market

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Cost-leadership strategy

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____ _____: to offer products or services that are of unique and superior value compared with those of competitors but to target a wide market

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Differentiation strategy

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____ _____ _____: to keep the costs, and hence the prices, of a product or service below those of competitors and to target a narrow market

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Cost-focus strategy

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_____ ____ ____: to offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market

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Focused-differentiation strategy

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o ____ ____ ____: a company makes and sells only one product within its market • Benefit: focus • Risk: vulnerability

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Single-product strategy

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o ____ _____: operating several businesses in order to spread the risk • Unrelated diversification • Related diversification

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Diversification strategy

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_____ diversification: operating several businesses under one ownership that are not related to one another

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Unrelated

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_____ diversification: an organization under one ownership operates separate businesses that are related to one another

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• Three Advantages to ____ Diversification: o Reduced risk, because more than one product o Management efficiencies, administration spread over several businesses o Synergy, the sum is greater than the parts

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____: the economic value of separate, related businesses under one ownership is greater together than the businesses are worth separately

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Synergy

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• The ____ Matrix: (a.k.a. portfolio analysis) o Developed by the Boston Consulting Group o Is a means of evaluating strategic business units on the basis of (1) their business growth rates and (2) their share of the market - Stars - Question marks - Cash cows - Dogs

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BCG

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___: have high growth, high market share - definite keepers

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Stars

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____ ____: risky new ventures, some will become stars, some dogs

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Question marks

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____ ____: have slow growth but high market share - income finances stars and question marks

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Cash cows

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____: have low growth, low market share - should be gotten rid of

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Dogs

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Larry Bossidy (former CEO of AlliedSignal, later Honeywell) and Ram Charan (business advisor to senior executives) authors of: o _____: (they say) is not simply tactics, it is a central part of any company's strategy; consists of using questioning, analysis, and follow-through to mesh strategy with reality, align people with goals, and achieve the results promised

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Execution: The Discipline of Getting Things Done; Execution

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• The 3 Core Processes of Business 1. ____ - "You need to consider who will benefit you in the future" a. An effective leader tries to evaluate talent by linking people to particular strategic milestones, developing future leaders, dealing with nonperformers, and transforming the mission and operation of the HR dept. 2. _____- "You need to consider how success will be accomplished" a. In considering whether he organization can execute its strategies, a leader must take a realistic and critical view of its capabilities and competencies 3. _____ - "You need to consider what path will be followed"

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People; Strategy; Operations

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• Building a Foundation of ____: o Know your people and your business - "Engage intensely with your employees" o Insist on realism - "Don't let others avoid reality" o Set clear priorities - "Focus on a few rather than many goals" o Follow through - "Establish accountability and check on results" o Reward the doers - "Show top performers that they matter" o Expand people's capabilities - "Develop the talent" o Know yourself - "Do the hard work of understanding who you are"

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Execution

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Two Kinds of Decision Making: _____ and _____

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Non-rational, Rational

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____: a choice made from among available alternatives

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Decision

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_____ ____: the process of identifying and choosing alternative courses of action

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Decision making

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o Two Systems of ____ ____ • Rational, analytical, and slow to act • Emotional, impulsive, and prone to form and follow habits

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Decision Making

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o The "___ __ ____" • As our knowledge and expertise grow, we may be less and less able to see things from an outsider's perspective - hence we are often apt to make irrational decisions

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Curse of Knowledge

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o ____ model of decision making: (a.k.a. classical model) explains how managers should make decisions; it assumes managers will make logical decisions that will be the optimum in furthering the organization's best interests

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Rational

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o Four stages of ____ ____ ____: • Identify the problem or opportunity • Think up alternative solutions • Evaluate alternatives and select a solution • Implement and evaluate the solution chosen

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rational decision making

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Rational Decision Making Stage 1: Identify the ____ ___ _____ • ____: difficulties that inhibit the achievement of goals • Customer complaints, supplier breakdowns, staff turnovers, sales shortfalls, competitor innovations • _____: situations that present possibilities for exceeding existing goals • _____: analyzing the underlying causes

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problem or opportunity; Problems; Opportunities; Diagnosis

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Rational Decision Making Stage 2: Think up ____ _____ • After you've identified the problem or opportunity and diagnosed its causes, you need to come up with alternative solutions

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alternative solutions

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Rational Decision Making Stage 3: Evaluate ____ and select a ____ • Is it ethical? • Is it feasible? • Is it ultimately effective? • If the decision is merely "good enough" but not optimal in the long run, you might reconsider

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alternatives; solution

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Rational Decision Making Stage 4: Implement and evaluate the ___ ____ • Successful Implementation: • Plan carefully • Be sensitive to those affected • _____: • Law of ____ _____: things happen that weren't foreseen o Give it more time: employees, customers, and so on have had enough time to get used to the new action o Change it slightly: "tweaking' o Try another alternative: go to plan B if plan A isn't working o Start over: if no alternative seems workable, go back to the drawing board

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solution chosen; Evaluation; unintended consequences

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o What's Wrong with the Rational Model? • The rational model is _____ • Rational model _____: managers have complete information, are able to make an unemotional analysis, and are able to make the best decision for the organization (unrealistic assumptions)

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prescriptive; assumptions

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o ___ ____ models of decision making: explain how managers make decisions; they assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimal decisions

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Non-rational

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o Non-rational models are ____

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descriptive

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o Three non-rational models:

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• Satisficing • Incremental • Intuition

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• 1950s: economist ____ ____ began to study how managers actually make decisions - proposed that managers could not act truly logically because their rationality was bounded by so many restrictions

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Herbert Simon

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• ____ ____: the concept suggests that the ability of decision makers to be rational is limited by numerous constraints, such as complexity, time and money, and their cognitive capacity, values, skills, habits, and unconscious reflexes • Complexity • Time and money constraints • Different cognitive capacity, values, skills, habits, and unconscious reflexes • Information overload • Different priorities • Imperfect information • Conflicting goals

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Bounded Rationality

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_____: the problems that need solving are often exceedingly complex, beyond understanding

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Complexity

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___ & ____ ____: there is not enough time or money to gather all relevant information

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Time and money constraints

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Different cognitive capacity, values, skills, habits, and unconscious reflexes:

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managers aren't all built the same way, of course, and all have personal limitations and biases that affect their judgment

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____ ____: there is too much information for one person to process

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Information overload

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____ ____: some data are considered more important, so certain facts are ignored

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Different priorities

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___ ____: managers have imperfect, fragmentary information about the alternatives and their consequences

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Imperfect information

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____ ____: other managers, including colleagues, have conflicting goals

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Conflicting goals

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_____ model: managers seek alternatives until they find one that is satisfactory, not optimal

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Satisficing

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____ model: managers take small, short-term steps to alleviate a problem, rather than steps that will accomplish a long-term solution • However, the temporary steps may also impede a beneficial long-term solution

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Incremental

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o The _____ Model: • Small entrepreneurs often cant afford in-depth marketing research and so they make decisions based on hunches - their subconscious, visceral feelings • Intuition: making a choice without the use of conscious thought or logical influence • Intuition that stems from expertise is known as a ____ ____ • Intuition based on feelings is known as ____ _____

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Intuition; holistic hunch; automated experience

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____ ____ management: the translation of principles based on best evidence into organizational practice, bringing rationality to the decision making process

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Evidence-based

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Pfeffer and Sutton had to do with what kind of management?

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Evidence-based

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• Seven _____Principles: • Treat your organization as an unfinished prototype • No brag, just facts • See yourself and your organization as outsiders do • Evidence-based management is not just for senior executives • Like everything else, you still need to sell it • If all else fails, slow the spread of bad practice • The best diagnostic question: what happens when people fail?

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Implementation

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• What makes it hard to be ____ based • Some reasons include: there's too much evidence, not enough good evidence, evidence doesn't quite apply, people are trying to mislead you, the side effects outweigh the cure, etc.

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evidence

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• _____: (a.k.a. business analytics) the term used for sophisticated forms or business data analysis

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Analytics

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• Example of analytics: o ____ _____: an investment adviser evaluates the risks of various stocks o ___ ____ ____: which predicts future data based on patterns of historical data

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Portfolio analysis; Time-series forecast

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• Three key attributes among ____ ____: (Davenport) o Use of _____: going beyond simple descriptive statistics • Predictive modeling: a data-mining technique used to predict future behavior and anticipate the consequence of change o Having multiple ____, not just one • Multiple applications supporting many parts of the business o Support from the ____ • Leaders who have a passion for the quantitative approach

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analytics competitors; modeling; applications; top

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o The Uses of "____ ____" • __ ____ - stores of data so vast that conventional database management systems cannot handle them and so very sophisticated analysis software and supercomputing-level hardware are required • The concept of big data has been dubbed "the next frontier for innovation, competition, and productivity"

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Big Data; Big Data

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• Risk ____: the willingness to gamble or undertake risk for the possibility of gaining an increased payoff o Research shows men are more ____ than women

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propensity; competitive

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Decision making ____: reflects the combination of how an individual perceives and responds to information

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style

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____ orientation: reflects the extent to which a person focuses on either task and technical concerns or people and social concerns when making decisions

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o Value

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o ____ for ambiguity: indicates the extent to which a person has a high need for structure or control in their life • A lot of structure desired:___ tolerance for ambiguity • Thrive in uncertain situations: ___ tolerance

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Tolerance; low; high

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1. The ____ Style: Action-Oriented Decision Makers Who Focus on Facts a. Have a ___ _____for ambiguity, task oriented, efficient, logical, practical, and systematic in their approach to solving problems, action-oriented and decisive, like to focus on facts b. In their pursuit of speed and results, these people tend to be ____ - to exercise power and control - and tend to focus on the short run

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Directive; low tolerance; autocratic

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2. The ____ Style: Careful Decision Makers Who Like Lots of Information and Alternative Choices a. Much higher tolerance for ambiguity, tend to overanalyze a situation, like to consider more alternatives, ____ decision makers, take ____ to make decisions but also respond well to new/uncertain situations

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Analytical; careful; longer

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3. The _____ Style: Decision Makers Who Rely on Intuition and Have a Long-Term Perspective a. ___ _____ for ambiguity, tend to focus on the people or social aspects of a work situation, take a broad perspective to problem solving, like to consider many options and future possibilities b. Rely on____ and discussions with others to acquire information, willing to take risks and are good at finding creative solutions to problems c. However, a conceptual style can foster an _____ approach to decision making

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Conceptual; High tolerance; intuition; indecisive

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4. The ____ Style: The Most People-Oriented Decision Makers a. Work ____ with others, enjoy social interactions in which opinions are openly exchanged, supportive, receptive to suggestions, show warmth, and prefer verbal to written information b. Tendency to ____ conflict and to be concerned about others, this can lead behavioral-types to adopt a wishy-washy approach to decision making and have a hard time saying no

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Behavioral; well; avoid

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• You can use knowledge of ___ ____ styles in three ways: o Know thyself o Influence others o Deal with conflict

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decision-making

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o Many companies now have an ___ officer: someone trained about matters of ethics in the workplace, particularly about resolving ethical dilemmas

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ethics

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o More companies creating ____ statements

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values

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Managers must now make sure their decisions are not only lawful, but ____

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ethical

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o Constance Bagley - introduced the ____ ____

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decision tree

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____ ____: a graph of decisions and their possible consequences; it is used to create a plan to reach a goal

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Decision tree

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o Questions ____ must ask: • Is the proposed action legal? • If "yes" does the proposed action maximize shareholder value? • If "yes" is the proposed action ethical? • If "no" would it be ethical not to take the proposed action?

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managers

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Your ____ about how happy or unhappy you think your future outcomes will make you perhaps can influence your decisions

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expectations

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o Four _____ Reactions: 1. Relaxed avoidance 2. Relaxed change 3. Defensive avoidance 4. Panic

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Ineffective

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____ ____: a manager decides to take no action in the belief that there will be no great negative consequences

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Relaxed avoidance

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____ ____: a manager realizes that complete inaction will have negative consequences but opts for the first available alternative that involves low risk

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Relaxed change

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____ ____: a manager cannot find a good solution and follows by (a) procrastinating, (b) passing the buck, or (c) denying the risk of any negative consequences

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Defensive avoidance

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____: a manager is so frantic to get rid of the problem that he or she cannot deal with the situation realistically

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Panic

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o Three _____ Reactions: 1. ____: a. Determine how much priority to give the decision situation 2. _____: a. Evaluate how much is known about the possible threat or opportunity 3. ____: a. Is the threat immediate?

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Effective; Importance; Credibility; Urgency

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Deciding to ____: a manager agrees that he or she must decide what to do about a problem or opportunity and take effective decision-making steps

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decide

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• Nine Common Decision Making ____ 1. Availability bias 2. Representativeness bias 3. Confirmation bias 4. Sunk-cost bias 5. Anchoring & adjustment bias 6. Overconfidence bias 7. Hindsight bias 8. Framing bias 9. Escalation of commitment bias

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Biases

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____: strategies that simplify the process of making decisions

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Heuristics

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_____ bias: managers use information readily available from memory to make judgments a. The problem is that readily-available information may not present a complete picture of a situation

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Availability

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_____ bias: the tendency to generalize from a small sample or single event a. The problem is that just because something happens once, does not mean it will happen again or happen to you

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Representativeness

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_____ bias: when people seek information to support their point of view and discount data that do not

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Confirmation

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____ ____ bias: when managers add up all the money already spent on a project and conclude it is too costly to simply abandon it

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Sunk-cost

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____ & ____ bias: the tendency to make decisions based on an initial figure a. The problem is that the initial figure may be irrelevant to market realities

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Anchoring & adjustment

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_____ bias: the bias in which people's subjective confidence in their decision making is greater than their objective accuracy

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Overconfidence

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____ bias: the tendency of people to view events as being more predictable than they really are

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Hindsight

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____ bias: the tendency of decision makers to be influenced by the way a situation or problem is presented to them

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Framing

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_____ of ______ bias: decision makers increase their commitment to a project despite negative information about it a. The problem is that what was once decided as a rational decision may continue to be supported for irrational reasons like pride, ego, etc.

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Escalation of commitment

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• Advantages/Disadvantages of Group Decision Making o _____: • Greater pool of knowledge • Different perspectives • Intellectual stimulation • Better understanding of decision rationale • Deeper commitment to the decision

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Advantages

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• Advantages/Disadvantages of Group Decision Making o _____: • A few people dominate or intimidate • Groupthink • Occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation • Satisficing • Goal displacement • Occurs when the primary goal is subsumed by a secondary goal

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Disadvantages

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______: • Occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation

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Groupthink

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____ _____: Occurs when the primary goal is subsumed by a secondary goal

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Goal displacement

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• What Managers Need To Know About ____ ____ ____ o They are less efficient • Take longer to make decisions • Use less information because of time pressures - increase chances of bad decision o Their size affects decision quality o They may be too confident o Knowledge counts

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Group Decision Making

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• _____ Management: Involving Employees in Decision Making o PM is the process of involving employees in (a) setting goals, (b) making decisions, and (c) solving problems, and (d) making changes in the organization • The PM is predicted to increase motivation, innovation, and performance • PM is not a quick-fix for low productivity and motivation, yet it can probably be effective in certain situations

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Participative

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_____: occurs when members are able to express their opinions and reach agreement to support the final decision

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Consensus

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o The dos and don'ts for achieving consensus: • ____: use active listening skills, involve as many members as possible, seek out reasons behind arguments, dig for facts • _____: avoid log rolling and horse trading ("I'll support your pet project if you'll support mine"), avoid agreeing just to make others happy, don't try to achieve consensus by putting questions to a vote

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Dos; Don'ts

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_____: a technique used to help groups generate multiple ideas and alternatives for solving problems

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Brainstorming

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____ brainstorming: sometimes called brain-writing, in which members of a group come together over a computer network to generate ideas and alternatives

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Electronic

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• Seven rules for _____: • Defer judgment • Build on the ideas of others • Encourage wild ideas • Go for quantity over quality • Be visual • Stay focused on the topic • One conversation at a time

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brainstorming

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o The ____ Technique: a group process that uses physically dispersed experts who fill out questionnaires to anonymously generate ideas; the judgments are combined in effect averaged to achieve a consensus of expert opinion • Useful when face-to-face discussions are impractical, when disagreement and conflicts are likely to impair communication, when certain individuals might try to dominate the discussion, when there is a high risk of groupthink

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Delphi

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_____ -driven systems - for push button consensus: ask participants to answer predetermined questions on electronic keypads or dials (polling devices, etc.)

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Chauffeur

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_____ -driven systems - for anonymous networking: a meeting within a room of participants who express their ideas anonymously on a computer network • Compared to traditional brainstorming, group-driven systems have been shown to produce greater quality and quantity of ideas for large groups of people, although there is no advantage with groups of four to six people • More ideas as group sizes increase

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Group

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BCG: is measuring ___ ____ on the left and relative market share on the bottom

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market growth

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____ ____: (a.k.a. corporate culture) is a system of shared beliefs and values that develops within an organization and guides the behavior of its members (Schein)

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Organizational culture

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Think of organizational culture as a company's "_____"

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"personality"

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____ ____: a formal system of tasks and reporting relationships that coordinates and motivate an organization's members so that they can work together to achieve the org's goals

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Organizational structure

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____ _____ Vision ? Strategy ? Culture ? Structure and internal practices ? Collective attitudes and behaviors ? Achievement of goals

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Organizational structure

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Four Types Of Organizational Culture • ____ Culture: has an internal focus and values flexibility rather than stability and control o Thrust: collaborate o Means: cohesion, participation, communication, empowerment o Ends: morale, people development, commitment o Clan orgs devote considerable resources to hiring/developing employees o View customers as partners o Example: Southwest Airlines

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Clan

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Four Types Of Organizational Culture ____ Culture: has an external focus and values flexibility o Thrust: create o Means: adaptability, creativity, agility o Ends: innovation, growth, cutting-edge output o Employees are encouraged to take risks and experiment new ways of getting things done o Example: Google

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Adhocracy

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Four Types Of Organizational Culture ____ Culture: has a strong external focus and values stability and control o Thrust: compete o Means: customer focus, productivity, enhancing competitiveness o Ends: market share, profitability, goal achievement o Customers, productivity, and profits take precedence over employee development/satisfaction o Example: Kia

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• Market

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Four Types Of Organizational Culture ____ Culture: has an internal focus and values stability and control over flexibility o Thrust: control o Means: capable processes, consistency, process control, measurement o Ends: efficiency, timeliness, smooth, functioning o Example: General Motors and UPS

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• Hierarchy

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____ ____: physical manifestations such as manner of dress, awards, myths and stories about the company, rituals and ceremonies, decorations, as well as visible behavior exhibited by managers and employees

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Observable artifacts

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____ values: the explicitly stated values and norms preferred by the organization

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Espoused

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____ values: which represent the values and norms actually exhibited in the organization

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Enacted

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____ _____: not observable, represent the core beliefs that employees have about their organization - those that are taken for granted, and as a result, difficult to change

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Basic assumptions

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How Employees Learn ____ • Symbols • Stories • Heroes • Rites and rituals

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Culture

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____: an object, act, quality, or event that conveys meaning to others

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Symbols

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____: a narrative based on true events, which is repeated - and sometimes embellished upon - to emphasize a particular value

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Stories

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____: a person whose accomplishments embody the values of the organization

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Heroes

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____ & ____: the activities/ceremonies, planned and unplanned, that celebrate important occasions and accomplishments in the org's life

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Rites and rituals

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The Importance of ____ • It gives members and organizational identity • It facilitates collective commitment • It promotes social-system stability • It shapes behavior by helping employees make sense of their surroundings

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Culture

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o ____ perspective: assumes that the strength of a corporate culture is related to a firm's long-term financial performance o _____: such financial success can so reinforce cultural norms that managers and employees become arrogant, inwardly focused, and resistant to change

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Strength; Downside

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A culture is said to be ____ when employees adhere to the org's values because they believe in its purpose

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strong

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A culture is said to be ___ when employees are forced to adhere to the org's valued through extensive procedures and bureaucracies

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weak

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____ cultures create goal alignment, employee motivation, and the appropriate structure and controls needed to improve organizational performance

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Strong

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• The ___ Perspective: Success Results When Culture Fits With The Firm's Business o A correct fit is expected to foster higher ____ performance

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Fit; financial

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___ perspective: assumes that an org's culture must align/fit with its business or strategic context

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Fit

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• The ____ Perspective: Success Results When Culture Helps The Firm Adapt

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Adaptive

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____ perspective: assumes that the most effective cultures help organizations anticipate and adapt to environmental changes

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Adaptive

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The ___ of ____ ____ • Formal statements • Slogans and sayings • Stories, legends, and myths • Leader reactions to crises • Role modeling, training, and coaching • Physical design • Rewards, titles, promotions, and bonuses • Organizational goals and performance criteria • Measurable and controllable activities • Organizational structure • Organizational systems and procedures

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Process of Culture Change

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____: a system of consciously coordinated activities or forces of two or more people

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Organization

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• __ ____ orgs: formed to make money by offering products or services

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For-profit

question

______ orgs: forms to offer service to some clients, not to make a profit (hospitals, colleges)

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Nonprofit

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____ ____ orgs: voluntary collectives whose purpose is to advance the members' interests (unions, trade associations)

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Mutual-benefit

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• ____ ___: is a box-and-lines illustration showing the formal lines of authority and the org's official positions or work specializations • The ____ hierarchy of authority: the chain of command o Also shows the official communication network (who talks to whom) • The ____ specialization: who specializes in what work

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Org chart; vertical; horizontal

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Common Elements of Orgs: 4 Proposed by ___ ____

answer

Edgar Schein

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Common ____ of ____: 4 Proposed by Edgar Schein 1. Common Purpose: The Means For Unifying Members 2. Coordinated Effort: Working Together For Common Purpose 3. Division Of Labor: Work Specialization For Greater Efficiency 4. Hierarchy Of Authority: The Chain Of Command Common Elements Of Orgs: 3 More That Most Authorities Agree On 5. Span Of Control: Narrow (Or Tall) Vs. Wide (Of Flat) 6. Authority, Responsibility, And Delegation: Line Vs. Staff Positions 7. Centralization vs. Decentralization of Authority o Centralized authority: important decisions are made by higher-level managers • Very small companies tend to be the most centralized • Ex: Sears and McDonald's • Advantage: less duplication of work, procedures are uniform o Decentralized authority: important decisions are made by middle-level and supervisory-level managers • Ex: GM and Harley-Davidson • Decisions are made more quickly, increasing org's flexibility and efficiency

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Elements of Organizations

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____ _____: unifies employees/members and gives everyone an understanding of the org's reason for being

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Common purpose

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____ ____: the coordination of individual efforts into a group of organization-wide effort

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Coordinated effort

question

____ of ____: (a.k.a. work specialization) is the arrangement of having discrete parts of a task done by different people

answer

Division of labor

question

____ of authority: is a control mechanism for making sure the right people do the right things at the right time

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Hierarchy

question

____ of command: in which an employee should report to no more than one manager

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Unity

question

____ of ____: (a.k.a. span of management) refers to the number of people reporting directly to a given manager o ___ span: means a manager has a limited number of people reporting - 3 VP's reporting to the Pres. rather than 9 VPs o ____ span: several people reporting

answer

Span of control; Narrow; Wide

question

____: refers to the rights inherent in a managerial position to make decisions, give orders, and utilize resources

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Authority

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____: managers must report and justify work results to managers above them

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Accountability

question

____: the obligation you have to perform the tasks assigned to you

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Responsibility

question

____: the process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy

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Delegation

question

____ ____: • Line managers: have authority to make decisions and usually have people reporting to them • Ex: president, VPs • Indicated on the org chart by a solid (usually vertical) line

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Line position

question

____ ___: • Staff personnel: have authority functions; they provide advice, recommendations, and research to line managers • Indicated on the org chart by a dotted (usually horizontal) line

answer

Staff position

question

____ ____: concerned with designing the optimal structures of accountability and responsibility that an org uses to execute its strategies

answer

Org design

question

_____ structure: has authority centralized in a single person, a flat hierarchy, few rules, and low work specialization i. For the small firm

answer

Simple

question

____ structure: people with similar occupational specialties are put together in formal groups

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Functional

question

____ structure: people with diverse occupational specialties are put together in formal groups by similar products or services, customers or clients, or geographic regions i. Product divisions: group activities around similar products or services ii. Customer divisions: tend to group activities around common customers or clients iii. Geographic divisions: group activities around defined regional locations

answer

Divisional

question

____ structure: an org combines functional and divisional chains of command in a grid so that there are two command structures - vertical and horizontal

answer

Matrix

question

____ ____: teams or workgroups, either temp. or permanent, are used to improve collaboration and work on shared tasks by breaking down internal boundaries

answer

Horizontal design

question

___ ____ org: is a fluid, highly adaptive org whose members, linked by information technology, come together to collaborate on common tasks o Collaborators may include coworkers, suppliers, customers, and even competitors

answer

Boundary-less

question

_____ structure: (a.k.a. network structure) the organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster

answer

Hollow

question

____ structure: a firm assembles product chunks, or modules, provided by outside contractors

answer

Modular

question

___ structure: a company outside a company that is created specifically to respond to an exceptional market opportunity that is often temporary

answer

Virtual

question

____ organization: an org whose members are geographically apart, usually working with email, collaborative computing, and other computer connections o Valuable for orgs who want to grow in partnerships with other orgs

answer

Virtual

question

____ design: the process of fitting the org to its environment

answer

Contingency

question

_____ Orgs: bureaucratic; this design works best when an org is operating in a stable environment o Centralized hierarchy of authority o Many rules and procedures o Specialized tasks o Formalized communication o Few teams or task forces o Narrow span of control, taller structures

answer

Mechanistic

question

___ Orgs: adhocracy o Decentralized hierarchy or authority o Few rules and procedures o Shared tasks o Informal communication o Many teams or task forces o Wider span of control, flatter structures

answer

Organic

question

1. The Environment: Mechanistic Vs. Organic Orgs - The ____ & ____ Model

answer

Burns And Stalker

question

2. The Environment: Differentiation Vs. Integration - The ____ & ____ Model

answer

Lawrence And Lorsch

question

3. Life cycle: ____ stages in the life of an org

answer

four

question

Organizational ____ ____: has a natural sequence of stages: birth, youth, midlife, maturity

answer

life cycle

question

o ___: non-bureaucratic • The stage in which the org is created

answer

Birth

question

o ___: pre-bureaucratic • A stage of growth and expansion

answer

Youth

question

o ____: bureaucratic • A period of growth evolving into stability

answer

Midlife

question

o ____: very bureaucratic • The org becomes large and mechanistic • The danger at this point is lack of flexibility and innovation

answer

Maturity

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