Management Test 2

______: setting goals and deciding how to achieve them; coping with uncertainty by formulating future courses of action to achieve specified results
Planning
Planning and ____ _____ are used in conjunction
Strategic Management
_____ ______ 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
Strategic management
Planning covers not only strategic planning (done by top managers) but also ____ planning (middle managers) and ____ planning (first-line managers)
tactical; operational
Planning steps:
1. Establish the organization’s ____ & ____
2. Formulate the ____ _____
3. Formulate the ____ plans, then the ____ & ____ plans
4. ____ the strategic plans
5. ____ the strategy
mission and vision; grand strategy; strategic, tactical and operational; Implement; Control
Planning requires you to set aside the ___ to do it
time
You may have to make some decisions without a lot of time to __
plan
• 4 benefits of planning:
o Helps you check your____
o Helps you coordinate ____
o Helps you think ____
o Helps you cope with ____
progress; activities; ahead; uncertainty
___ & ___ suggest that organizations adopt on of the 4 approaches when responding to uncertainty in their environment.
Miles and Snow
____: “Lets stick with what we do best, avoid other involvements”
Defenders
– 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
Defenders
_____: “Let’s create our own opportunities, not wait for them to happen”
Prospectors
– Focus on developing new products/services and in seeking out new markets, rather than waiting for things to happen
– Examples: Apple, Gap
Prospectors
____: “Let others take the risks of innovating, and we’ll imitate what works best”
Analyzers
Analyzers:
– 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
_____: “Lets wait until there’s a crisis, then we’ll react
Reactors
Reactors
– Passive and reactive
– Make adjustments only when finally forced to by environmental pressures
___ ___ ___: 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
The adaptive cycle
Miles and Snow also introduced the ____ ____.
Adaptive cycle
___ ____: “what is our reason for being?”
Mission statement
___ ____: “what do we want to become?”
Vision statement
___ _____: done by top managers for the next 1-5 years
Strategic planning
____ ____: done by middle managers for the next 6-24 months
Tactical planning
____ ____: done by first-line managers for the next 1-52 weeks
Operational planning
___: the organizations’ purpose or reason for being
Mission
Determining the ___ ____ is done by the top managers and board of directors
mission statement
____ ____: expresses the purpose of the organization
Mission statement
____: 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
Vision
After developing the mission statement, ___ managers need to develop the vision statement
top
____ ____: expresses what the organization should become, where it wants to go strategically
Vision statement
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
Strategic
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
Tactical
o _____ planning
• First-line management
• Determining how to accomplish specific tasks with available resources within the next 1-52 weeks
Operational
____: also known as an objective, is a specific commitment to achieve a measurable result within a stated period of time
Goal
Like planning, ____ are of the same 3 types (strategic, tactical, operational)
goals
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
means-end-chain
____ ____: defined the course of action needed to achieve the stated goal; such as a marketing plan or sales plan
Action plan
___ ____: 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
Operating plan
_____ plans: developed for activities that occur repeatedly over a period of time
Standing
_____: a standing plan that outlines the general response to a designated problem or situation
Policy
_____: a standing plan that outlines the response to particular problems or circumstances
Procedure
____: a standing plan that designates specific required action
Rule
____ ____ plans: developed for activities that are not likely to be repeated in the future
Single-use
_____: a single-use plan encompassing a range of projects or activities
Program
____: a single-use plan of less scope and complexity than a program
Project
___ goals: is one that is specific, measurable (quantifiable), attainable, results-oriented, and has target dates
Smart
____ ___ _____: 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
MBO (Management By Objectives)
The purpose of MBO is to ____ rather than to control subordinates
motivate
1. ____ ____ ____:
a. Important to have back and forth negotiation to make the objectives practicable
b. This practice impels people to set more difficult goals
Jointly set objectives
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
Improvement; Personal Development; Maintenance
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
Develop Action Plan
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
Periodically Review Performance:
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
Give Performance Appraisal
• 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”
Management By Objectives
____: objectives are structured in a unified hierarchy, becoming more specific at lower levels of the organization
Cascading
• 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
Deadlines
• The 2 ____ Steps:
o Make the plan
o Carry out the plan
Planning
• 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
Control
____ _____: a document that outlines a proposed firm’s goals, the strategy for achieving them, and the standards for measuring success
Business plan
Evidence suggests that firms with formal _____ plans are the ones that are more apt to survive
business
_____: 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
Strategy
_____ _____: a process that involves all managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals
Strategic Management
_____ _____: 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
Strategic Planning
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:
direction and momentum; planning; new ideas; sustainable competitive
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 _____
responsive; innovating; quality; effectiveness
_____ _____: attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company
Strategic positioning
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
Many; Broad; many
Strategy requires ____ ____ in competing: a company has to choose not only what strategy to follow, but which one not to follow
trade-offs
Strategy involves creating a ____ among activities:
“fit”
___ has to do with the ways a company’s activities interact and reinforce one another
“Fit”
Does Strategic Management Work for Small as Well as Large Firms?
Yes
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
Five Steps of the Strategic Management Process
a. Characteristics of a good mission statement:
The ____ & ____ for being should be included
purpose and reason
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
positive; beyond
_____ _____: after an assessment of current organizational performance, then explains how the organization’s mission is to be accomplished
Grand strategy
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
Growth; Stability; Defensive
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
strategic plans; Strategy formulation
4. Carry out the strategic plans
a. Strategy implementation
b. ____ managers sell the plans to middle and supervisory managers
Top
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
Strategic control
_____ _____: gaining information about one’s competitors’ activities so that you can anticipate their moves and react appropriately
Competitive Intelligence
o Ways to gain ___ _____:
• Public prints and advertising, investor information, informal sources
Competitive Intelligence
____ ____: (a.k.a. situational analysis); is a search for the strengths, weaknesses, opportunities, and threats affecting the organization
SWOT Analysis
_____ _____: 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
Environmental scanning
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
Strengths
____: 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.
Weaknesses
_____: 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
Opportunities
____: environmental factors that hinder an organization’s achieving a competitive advantage
• Outside matters
• Could be in the same categories as opportunities
Threats
_____: a vision or projection of the future
o Trend analysis
o Contingency planning
Forecasting
____ ____: a hypothetical extension of a past series of events into the future
Trend analysis
_____ ____: (a.k.a. scenario planning/analysis); the creation of alternative hypothetical but equally likely future conditions
Contingency planning
• 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
Competitive Forces
• Porter’s Four Competitive Strategies:
o A.k.a. four generic strategies:
i. Cost-leadership strategy
ii. Differentiation strategy
iii. Cost-focus strategy
iv. Focused-differentiation strategy
____ ____ _____: is to keep the costs, and hence the prices, of a product or service below those of competitors and to target a wide market
Cost-leadership strategy
____ _____: to offer products or services that are of unique and superior value compared with those of competitors but to target a wide market
Differentiation strategy
____ _____ _____: to keep the costs, and hence the prices, of a product or service below those of competitors and to target a narrow market
Cost-focus strategy
_____ ____ ____: to offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market
Focused-differentiation strategy
o ____ ____ ____: a company makes and sells only one product within its market
• Benefit: focus
• Risk: vulnerability
Single-product strategy
o ____ _____: operating several businesses in order to spread the risk
• Unrelated diversification
• Related diversification
Diversification strategy
_____ diversification: operating several businesses under one ownership that are not related to one another
Unrelated
_____ diversification: an organization under one ownership operates separate businesses that are related to one another
Related
• 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
Related
____: the economic value of separate, related businesses under one ownership is greater together than the businesses are worth separately
Synergy
• 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
BCG
___: have high growth, high market share – definite keepers
Stars
____ ____: risky new ventures, some will become stars, some dogs
Question marks
____ ____: have slow growth but high market share – income finances stars and question marks
Cash cows
____: have low growth, low market share – should be gotten rid of
Dogs
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
Execution: The Discipline of Getting Things Done; Execution
• 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”
People; Strategy; Operations
• 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”
Execution
Two Kinds of Decision Making: _____ and _____
Non-rational, Rational
____: a choice made from among available alternatives
Decision
_____ ____: the process of identifying and choosing alternative courses of action
Decision making
o Two Systems of ____ ____
• Rational, analytical, and slow to act
• Emotional, impulsive, and prone to form and follow habits
Decision Making
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
Curse of Knowledge
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
Rational
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
rational decision making
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
problem or opportunity; Problems; Opportunities; Diagnosis
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
alternative solutions
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
alternatives; solution
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
solution chosen; Evaluation; unintended consequences
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)
prescriptive; assumptions
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
Non-rational
o Non-rational models are ____
descriptive
o Three non-rational models:
• Satisficing
• Incremental
• Intuition
• 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
Herbert Simon
• ____ ____: 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
Bounded Rationality
_____: the problems that need solving are often exceedingly complex, beyond understanding
Complexity
___ & ____ ____: there is not enough time or money to gather all relevant information
Time and money constraints
Different cognitive capacity, values, skills, habits, and unconscious reflexes:
managers aren’t all built the same way, of course, and all have personal limitations and biases that affect their judgment
____ ____: there is too much information for one person to process
Information overload
____ ____: some data are considered more important, so certain facts are ignored
Different priorities
___ ____: managers have imperfect, fragmentary information about the alternatives and their consequences
Imperfect information
____ ____: other managers, including colleagues, have conflicting goals
Conflicting goals
_____ model: managers seek alternatives until they find one that is satisfactory, not optimal
Satisficing
____ 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
Incremental
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 ____ _____
Intuition; holistic hunch; automated experience
____ ____ management: the translation of principles based on best evidence into organizational practice, bringing rationality to the decision making process
Evidence-based
Pfeffer and Sutton had to do with what kind of management?
Evidence-based
• 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?
Implementation
• 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.
evidence
• _____: (a.k.a. business analytics) the term used for sophisticated forms or business data analysis
Analytics
• Example of analytics:
o ____ _____: an investment adviser evaluates the risks of various stocks
o ___ ____ ____: which predicts future data based on patterns of historical data
Portfolio analysis; Time-series forecast
• 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
analytics competitors; modeling; applications; top
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”
Big Data; Big Data
• Risk ____: the willingness to gamble or undertake risk for the possibility of gaining an increased payoff
o Research shows men are more ____ than women
propensity; competitive
Decision making ____: reflects the combination of how an individual perceives and responds to information
style
____ orientation: reflects the extent to which a person focuses on either task and technical concerns or people and social concerns when making decisions
o Value
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
Tolerance; low; high
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
Directive; low tolerance; autocratic
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
Analytical; careful; longer
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
Conceptual; High tolerance; intuition; indecisive
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
Behavioral; well; avoid
• You can use knowledge of ___ ____ styles in three ways:
o Know thyself
o Influence others
o Deal with conflict
decision-making
o Many companies now have an ___ officer: someone trained about matters of ethics in the workplace, particularly about resolving ethical dilemmas
ethics
o More companies creating ____ statements
values
Managers must now make sure their decisions are not only lawful, but ____
ethical
o Constance Bagley – introduced the ____ ____
decision tree
____ ____: a graph of decisions and their possible consequences; it is used to create a plan to reach a goal
Decision tree
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?
managers
Your ____ about how happy or unhappy you think your future outcomes will make you perhaps can influence your decisions
expectations
o Four _____ Reactions:
1. Relaxed avoidance
2. Relaxed change
3. Defensive avoidance
4. Panic
Ineffective
____ ____: a manager decides to take no action in the belief that there will be no great negative consequences
Relaxed avoidance
____ ____: a manager realizes that complete inaction will have negative consequences but opts for the first available alternative that involves low risk
Relaxed change
____ ____: 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
Defensive avoidance
____: a manager is so frantic to get rid of the problem that he or she cannot deal with the situation realistically
Panic
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?
Effective; Importance; Credibility; Urgency
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
decide
• 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
Biases
____: strategies that simplify the process of making decisions
Heuristics
_____ 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
Availability
_____ 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
Representativeness
_____ bias: when people seek information to support their point of view and discount data that do not
Confirmation
____ ____ bias: when managers add up all the money already spent on a project and conclude it is too costly to simply abandon it
Sunk-cost
____ & ____ 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
Anchoring & adjustment
_____ bias: the bias in which people’s subjective confidence in their decision making is greater than their objective accuracy
Overconfidence
____ bias: the tendency of people to view events as being more predictable than they really are
Hindsight
____ bias: the tendency of decision makers to be influenced by the way a situation or problem is presented to them
Framing
_____ 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.
Escalation of commitment
• 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
Advantages
• 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
Disadvantages
______:
• Occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation
Groupthink
____ _____: Occurs when the primary goal is subsumed by a secondary goal
Goal displacement
• 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
Group Decision Making
• _____ 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
Participative
_____: occurs when members are able to express their opinions and reach agreement to support the final decision
Consensus
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
Dos; Don’ts
_____: a technique used to help groups generate multiple ideas and alternatives for solving problems
Brainstorming
____ brainstorming: sometimes called brain-writing, in which members of a group come together over a computer network to generate ideas and alternatives
Electronic
• 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
brainstorming
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
Delphi
_____ -driven systems – for push button consensus: ask participants to answer predetermined questions on electronic keypads or dials (polling devices, etc.)
Chauffeur
_____ -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
Group
BCG: is measuring ___ ____ on the left and relative market share on the bottom
market growth
____ ____: (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)
Organizational culture
Think of organizational culture as a company’s “_____”
“personality”
____ ____: 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
Organizational structure
____ _____
Vision → Strategy → Culture → Structure and internal practices → Collective attitudes and behaviors → Achievement of goals
Organizational structure
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
Clan
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
Adhocracy
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
• Market
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
• Hierarchy
• The 3 Levels of Organizational Culture
– Observable artifacts
– Espoused values
– Enacted values
– Basic assumptions
____ ____: 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
Observable artifacts
____ values: the explicitly stated values and norms preferred by the organization
Espoused
____ values: which represent the values and norms actually exhibited in the organization
Enacted
____ _____: 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
Basic assumptions
How Employees Learn ____
• Symbols
• Stories
• Heroes
• Rites and rituals
Culture
____: an object, act, quality, or event that conveys meaning to others
Symbols
____: a narrative based on true events, which is repeated – and sometimes embellished upon – to emphasize a particular value
Stories
____: a person whose accomplishments embody the values of the organization
Heroes
____ & ____: the activities/ceremonies, planned and unplanned, that celebrate important occasions and accomplishments in the org’s life
Rites and rituals
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
Culture
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

Strength; Downside
A culture is said to be ____ when employees adhere to the org’s values because they believe in its purpose
strong
A culture is said to be ___ when employees are forced to adhere to the org’s valued through extensive procedures and bureaucracies
weak
____ cultures create goal alignment, employee motivation, and the appropriate structure and controls needed to improve organizational performance
Strong
• The ___ Perspective: Success Results When Culture Fits With The Firm’s Business
o A correct fit is expected to foster higher ____ performance
Fit; financial
___ perspective: assumes that an org’s culture must align/fit with its business or strategic context
Fit
• The ____ Perspective: Success Results When Culture Helps The Firm Adapt
Adaptive
____ perspective: assumes that the most effective cultures help organizations anticipate and adapt to environmental changes
Adaptive
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
Process of Culture Change
____: a system of consciously coordinated activities or forces of two or more people
Organization
• __ ____ orgs: formed to make money by offering products or services
For-profit
______ orgs: forms to offer service to some clients, not to make a profit (hospitals, colleges)
Nonprofit
____ ____ orgs: voluntary collectives whose purpose is to advance the members’ interests (unions, trade associations)
Mutual-benefit
• ____ ___: 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
Org chart; vertical; horizontal
Common Elements of Orgs: 4 Proposed by ___ ____
Edgar Schein
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

Elements of Organizations
____ _____: unifies employees/members and gives everyone an understanding of the org’s reason for being
Common purpose
____ ____: the coordination of individual efforts into a group of organization-wide effort
Coordinated effort
____ of ____: (a.k.a. work specialization) is the arrangement of having discrete parts of a task done by different people
Division of labor
____ of authority: is a control mechanism for making sure the right people do the right things at the right time
Hierarchy
____ of command: in which an employee should report to no more than one manager
Unity
____ 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
Span of control; Narrow; Wide
____: refers to the rights inherent in a managerial position to make decisions, give orders, and utilize resources
Authority
____: managers must report and justify work results to managers above them
Accountability
____: the obligation you have to perform the tasks assigned to you
Responsibility
____: the process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy
Delegation
____ ____:
• 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
Line position
____ ___:
• 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
Staff position
____ ____: concerned with designing the optimal structures of accountability and responsibility that an org uses to execute its strategies
Org design
_____ structure: has authority centralized in a single person, a flat hierarchy, few rules, and low work specialization
i. For the small firm
Simple
____ structure: people with similar occupational specialties are put together in formal groups
Functional
____ 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

Divisional
____ structure: an org combines functional and divisional chains of command in a grid so that there are two command structures – vertical and horizontal
Matrix
____ ____: teams or workgroups, either temp. or permanent, are used to improve collaboration and work on shared tasks by breaking down internal boundaries
Horizontal design
___ ____ 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
Boundary-less
_____ 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
Hollow
____ structure: a firm assembles product chunks, or modules, provided by outside contractors
Modular
___ structure: a company outside a company that is created specifically to respond to an exceptional market opportunity that is often temporary
Virtual
____ 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
Virtual
____ design: the process of fitting the org to its environment
Contingency
_____ 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
Mechanistic
___ 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
Organic
1. The Environment: Mechanistic Vs. Organic Orgs – The ____ & ____ Model
Burns And Stalker
2. The Environment: Differentiation Vs. Integration – The ____ & ____ Model
Lawrence And Lorsch
3. Life cycle: ____ stages in the life of an org
four
Organizational ____ ____: has a natural sequence of stages: birth, youth, midlife, maturity
life cycle
o ___: non-bureaucratic
• The stage in which the org is created
Birth
o ___: pre-bureaucratic
• A stage of growth and expansion
Youth
o ____: bureaucratic
• A period of growth evolving into stability
Midlife
o ____: very bureaucratic
• The org becomes large and mechanistic
• The danger at this point is lack of flexibility and innovation
Maturity