Business Management Flashcards
What are the characteristics of services
Intangibility
Inseparability
Variability
Perishability
What is the intangibility characteristic of services?
Intangibility: a deed, performance or effort Difficulty in evaluation Use tangible cues Benefits on non-ownership
How can a business overcome the intangibility characteristic of services
Company and brand image essential
Increased importance of promotion
Emphasise benefits
Increase tangibility
Describe the inseparability characteristic of services
Inseparability
Simultaneous production and consumption
Importance of service provider
Selection, training and rewarding of staff
Avoid inter-customer conflict
How can a business overcome the inseparability characteristic of services
Direct sales may be more successful than intermediaries
Scale of operation may be limited
Describe the variability characteristic of services
Variability
Standardization difficult
Selection, training and rewarding of staff
Evaluation systems
Use of reliable equipment
How can a business overcome the variability characteristic of services
Selection, training and rewarding of staff
Systems standardised
Emphasise custom service
Use of reliable equipment
Describe the perishability characteristic of services
Perishability
Consumption cannot be stored
Match supply and demand
Use of part-time staff
Multi-skilling
Participation by consumers
Differential pricing
Stimulation of off-peak demand
Comfortable waiting area
Reservation system
How can a business overcome the perishability characteristic of services
Match supply and demand
Stimulation of off-peak demand
Reservation system
what is organisational structure
the process of dividing the tasks between groups, individuals and departments and co-ordinating their activities to achieve organisational goals
what are the two components of structural configuration
Division of labour
Spans of control
What is division of labour
Extent to which work is broken down into different tasks
Dividing complex tasks into specialised jobs
what is spans of control
the number of employees reporting directly to the supervisor
width of span depends on
skills and abilities of the manager
employee characteristics
task characteristics
similarity, complexity, standardisation of tasks
physical proximity of subordinates
what is a centralised structure
locating of decision making at the top of the organisation with senior management
several layers of management that control an organisation’s activities in a top-down fashion
what are the benefits of a centralised structure
senior managers enjoy greater control
standardised procedures can result in cost savings
decisions to benefit the organisation as a whole
senior and experienced managers making decisions
in difficult times an organisation will need strong leadership
defined roles aid accountability
what is a decentralised structure
eliminate much of the unnecessary layers of management
more authority given to line managers and even lower level staff
reduced bureaucracy to encourage efficiency
emphasis on flexibility (lean organisations)
what are the benefits of decentralised structures
aids the flow of communication
eliminates red tape
promotes bottom-up lines of communication
places top management closer to the real operations of the firm
decision making is a form of empowerment
increases employee motivation
greater flexibility in responding to challenges
increases productivity through delegation of responsibilities to all levels
list the forms of departmentalisation
functional
product/service
geographic
matrix
what is functional departmentalisation
groups jobs by the function they perform, such as finance, marketing, HR, production
what are the benefits of functional departmentalisation
synergies and efficiencies through specialisation
clear lines of communication and decision-making
reduces duplication of resources
facilitates co-ordination within functional areas
what are the limitations of functional departmentalisation
poor communications across functional areas
may be difficult to manage large departments
limited view of organisational goals
costly to co-ordinate activities between functions
what is product departmentalisation
groups jobs by product or service line and allows specialisation in particular products or services
jobs can be grouped according to a specific product or service thereby placing all activities related to the product under one manager
each major product area in the organisation is under the authority of a senior manager who is a specialist in, and responsible for, everything related to that product line
what are the benefits of product departmentalisation
product lines are amenable to evaluation as profit centres
product lines are more easily managed
speedy co-ordination between those working on a product
managers develop experience of a variety of functions
what are the limitations of product departmentalisation
co-ordination among specialised areas can be problematic
duplication of functional services
less communication between functional specialists
over emphasis on product objectives rather than organisational objectives
what is geographic departmentalisation
grouping of activities on the basis of territory or according to the area served by the business
if a firms customers are geographically dispersed, it can group jobs based on a specific geographical region
suits international firms and MNCs as allows them to serve local markets better
what are the benefits of geographic departmentalisation
more effective and efficient handling of specific regional issues that arise
better serves the needs of unique geographic markets
what are the limitations of geographic departmentalisation
needs large number of general managers at regional level
loss of control over operations
duplication of functional tasks
what is the matrix form of departmentalisation
hybrid structure in which two or more forms of departmentalisation are used
usually people assigned to a specific functional area AND a specific project or product
critical for firms who have multiple product portfolios in a variety of international markets eg Boeing
what are the benefits of matrix departmentalisation
the use of cross functional project teams may lead to high innovation
flexible pool of specialists
functional assistance is available to all projects
good training ground for potential managers
what are the limitations of matrix departmentalisation
dual reporting relationship may lead to conflict over responsibilities
power struggles may emerge between functional managers
it may lead to slower decision making
tracing accountability and authority may be problematic
what are the main reasons for delayering and downsizing
adaptability is important in the dynamic business environment
must be cost efficient and responsive which leads to downsizing and delayering
what is delayering
delayering is the reduction of layers of management, such as middle level management and supervisors
what is downsizing
downsizing is the reduction in overall numbers through various measures that range from the adoption of labour-saving tech to outsourcing
list the new forms of organisational design
network organisations virtual organisations self-managed teams learning organisations self-organising systems
what is a network organisation
the linking of numerous separate organisations to optimise their interaction in achieving an overall common goal
for example joint ventures on large construction or product development projects
what is a virtual organisation
interaction between organisational members is completely or pre-dominantly via telecommunications technology
what is self managed teams
small teams granted sufficient authority to manage themselves in the pursuit of their project goals
Empowerment
a challenge for traditional managers
what is a learning organisation
critically important in a dynamic business environment to detect and correct mistakes early
learn from mistakes
managers facilitate employees to apply new information and learning from experience
what are self organising systems
have the ability to continuously change their structure and internal processes in line with feedback form the environment
Requires continuous feedback, patience and good communication skills
what is the external environment in the dynamic business environment
The external environment refers to factors, forces, situations and events outside the organization
that affect its performance
Economic Demographic Technological Political/Legal Socio-cultural
what is the micro-environment (dynamic business environment)
The forces close to the company that affect the it’s ability to serve it’s customers
Customers Employees Suppliers Shareholders Media Competitors
what is the macro-environment (dynamic business environment)
Larger environment of forces that shape opportunities and threats to the company
Encompasses the ‘PESTLE’ factors
what is the PESTLE analysis
Political
Government (conservative, socialist, dictator) e.g. GREEN PARTY
Economic
BOOM BUST Cycle
Socio-cultural
Culture, traditions, values, beliefs, language, education, etc
Technological
Innovation, cost efficiencies, premium pricing
Legal
Workplace laws, Minimum Wage, Working Time, Health and Safety
Environmental
Ecological, pollution, society expects
what is the purpose of the finance functional department in a business
Raising Capital
- Equity, long-term debt, short-term debt
- Evaluate sources of finance
Preparing Reports and Internal Management Accounts
- Cash-flow statements, P & L, balance sheet
Preparing Budgets
- Essential for effective costing strategy
Monitoring and Controlling
what is the purpose of the operations functional department of a business
Process and system performance
quality
inventory management
production scheduling
materials requirements planning
purchasing
Layout of facilities:
Just in Time production
Scheduling and managing maintenance time
product development
forecasting expected supply and demand of materials etc
what is the purpose of the information technology functional department in a business
Assists with functions, e.g., HR, Marketing, finance
Source of competitive advantage
what is the purpose of the Human Resources Management functional department in a business
Recruitment and Selection • Orientation • Training and Development • Performance Evaluation • Compensation and Benefits • Health and Safety • Downsizing • Strategic HR Planning
what is human resources management?
“ the policies and practices involved in carrying out the “people” or human resource aspects of a management position, including recruiting, screening, training, rewarding, and appraising” Dessler (2013)
- People are viewed as a company’s best resource and therefore procedures, practices and policies must be put in place to secure commitment from employees
- Dealing with people who differ Gunnigle et al (2011)
what are the components of HRM (human resource management)
- HR Planning
- Recruitment and Selection
- Employee Induction
- Training and Development • Performance Appraisal
what is human resources planning
demand analysis
supply analysis
estimate deficits/surpluses
prepare action plan
what is HR recruitment and selection
job analysis
job description
job/person specification
what are the selection tools used by HR
- Interviews
- Written Tests
- Performance Simulation Tests
Reject Error
Reject a candidate who would, if hired, have performed successfully in the job
Accept Error
Hire those who subsequently perform poorly
What is the purpose of employee induction (HRM)
Reduce initial anxiety
Familiarise with the job, work unit, organisation
Expands on the information obtained during recruitment and selection
Informs about organisational objectives, policies and procedures
What is training in HRM
Employee Training
Planned effort to modify/develop knowledge, skills and attitudes
Warning signals – decreased productivity, lower quality, more accidents
What is employee development in HRM
Broader concept than training
Improve individual manager’s performance
Improve management performance as a whole
Improvement of organisational effectiveness
What is a performance appraisal in HRM
Periodic assessment of an individual’s future potential
Establish performance objectives and standards
Measure and compare performance against those standards
Feedback to employees
What are some methods of appraisal used by HR
Graphic rating scales
self assessment
360 degree feedback
what is marketing
“the science and art of exploring, creating and delivering value to satisfy the needs of a target market at a profit” Kotler
“marketing is based on understanding the needs of customers and serving those needs, competitively, at a profit” Rogan
what are the characteristics of successful marketing
customer driven
centred on satisfying customer needs
capable of change
responsive to customer needs
it should have a competitive advantage
profit-driven
responsive to society’s well being
quality focused before during and after sales
the customer is the reason the business exists
happy customers keep coming back
repeat business=profitability
what are the components of the marketing mix
product
price
promotion
place
for services:
process
people
physical evidence
describe the product element of the marketing mix
Any good, service or idea that is capable of satisfying a customer’s need
Decisions……product design, number of versions, brand name, packaging, improving products to keep pace, eliminating declining products
describe the price element of the marketing mix
Must make profit, but be affordable to customer (willing to pay, wishes to pay).
Decisions…….product image, discount and credit terms.
describe the promotion element of the marketing mix
Inform market about product. (communicating with the market)
Decisions….combination of advertising, sales promotions, direct marketing, personal selling
describe the place element of the marketing mix
Distribution
Decisions….quantities, time, locations, directly or through channels
Choice of channel must be in line with product image.
what are the phases of the product life cycle
Development
Introduction
Growth
Maturity
Decline
describe the introduction phase of the product life cycle
Newly introduced - all about awareness
Characterised by:
Low sales
High costs
purchased by innovators
limited competition
describe the growth phase of the product life cycle
becoming more popular with early adopters
characterised by:
rising sales
costs declining
growing competitors
increasing market share
describe the maturity phase of the product life cycle
approaching its peak sales and profits (middle majority)
characterised by:
intense competition
maximising profits
maintain market share
cost per customer is low
describe the decline phase of the product life cycle
past its best (purchased by laggards)
characterised by:
sales decline
profits decline
competition is reduced
replacement is an option
what is the STP process
Segmentation
Targeting
Positioning
what is segmentation in the STP Process
Select the most profitable and viable customers to serve
what is targeting in the STP Process
Reach the segmented customers with an offering that has a competitive advantage
what is positioning in the STP Process
Communicate a position that is clearly perceived
what are the segmentation variables used by marketers to segment their customers?
Demographic
Age, gender, income, social class
Geographic
Nations, states, regions, counties, cities, towns
Pyschographic
Consumer lifestyles, activities, interest, and opinions
Behavioural
Relationship between the customer and product
gift buying, usage rates, loyalty
what is market targeting
Evaluating each segment and selecting which segments to enter
based on:
levels of competition
growth opportunities
buyer behaviour
market size
supplier power
new product information
competitor strategies
what are the market targeting strategies that businesses can employ
Undifferentiated - full market coverage
Differentiated - separate marketing mix for different segments
Concentrated – more specific, micro or niche strategy. Trying to capture a large share of one or a few sub-markets
describe market positioning
Designing the product and marketing mix to occupy a particular place in the customer’s mind (Distinctiveness)
Must identify possible areas of competitive advantage
Marketers create an image or identity in the minds of consumers
Strongly linked to branding
Is the difference…………?
Important – to the target market
Distinctive – from competitors offer
Superior – better than other options available
Communicable – and visible to the prospective buyer
Pre-emptive – not easily copied by competitors
Affordable – to the prospective buyer
Profitable – for the company to produce/offer
what is branding
The marketing practice of creating a name, symbol or design that identifies and differentiates a product from others products
factors to consider
Distinctiveness
Memorability
Relevance
Flexibility
what are the benefits of branding
aids product identification
communicates benefits/risks
creates interest
creates loyalty
defends against competition
helps positioning
allows premium pricing
increases power over retailers
transfers to successor product
how can a company differentiate its product
May position on one or more differentiating factors
Relevant when two or more firm’s claim to be the best USP
If a company hammers away at one difference and consistently delivers on it then it will be associated with it E.g. Volvo……safety
what are the four areas of the Ansoff Matrix
Market Penetration
Product development
Market development
Product/market diversification
what is market penetration in Ansoff’s matrix
Focuses on further exploiting existing products
Promotions, pricing etc., to attract more customers and wider distribution
what is product development in Ansoff’s matrix
New products are introduced into existing markets
Modify existing products, (appearance, efficiency, effectiveness, “new” or “improved”)
What is market development in Ansoff’s matrix
Market extension, new geographic markets, new distribution channels, new packaging, different pricing
what is diversification in ansoff’s matrix
New products to new markets
Related diversification – same industry
Unrelated diversification – different industry
define management
The process of getting things done effectively and efficiently through and with other
people. (Robbins et al., 2010)
“Management is the process of assembling and using sets of resources in a goaldirected manner to accomplish tasks in an organizational setting”. (Hitt et al., 2007)
list the five functions of management
planning commanding controlling coordinating organising
what is the planning function of management
Planning
Allows best use of current resources
what is the organising function of management
Organising
The way work is arranged/scheduled
Create structures, establish relationships, allocate resources
what is the co-ordinating function of management
Co‐ordinating
An extension of organising across numerous employees/departments
what is the commanding function of management
Commanding
Orders and instructions, leading and motivating
what is the controlling function of management
Controlling
Establish performance standards, measure performance, compare, take corrective action
what are contemporary management skills
Communication/interpersonal skills
Disseminate information across the company
Ethical Orientation
Morally acceptable behaviour internal and external
Ability to manage change
Steer the company through uncertain times, think strategically
Ability to motivate
Get optimum performance from staff
Political skills
Handle internal and external political issues astutely
Conflict Management
Resolve conflicts, conciliatory/empathetic approach
what are the 4 broad categories of contemporary management skills
Conceptual
Analyse and diagnose complex situations
Interpersonal
Working well with others
Technical
Job–specific knowledge and techniques
Political
Build a power base and establish the right connections
what is leadership
A process of leading a group and influencing that group to achieve its goals. It’s what
leaders do, (Robbins et al 2015).
• Its about persuasion and influence.
what is organisational leadership
An interpersonal process whereby the organisation attempts to influence employees in accomplishing an
objective and can be demonstrated by any employee at any level of an organisation
what are the hallmarks of leaders
Leaders
Have followers
Have a people focus
Seek risk
Seek change
Are proactive
what are the skills of effective leaders
Empathy
Understanding the goals/situations of others
Competency
Strong reasoning and moral principles
Communication
Comfortable running meetings and making
presentations
Forward looking
Ability to set goals and have a vision of the future
Emotional and Social
intelligence
Awareness of one’s own and others emotions and an
ability to manage them
what are the different types of leadership approaches
Trait Behavioural Contingency Charismatic Situational
what is the trait approach to leadership
Leader born not made
Set of traits shared by leaders:
Adaptability Assertiveness Passion Self‐confidence Social intelligence
These are found in non‐leader too
No single recipe for leadership
what is the behavioural approach to leadership
Specific behaviours differentiate leaders from non‐leaders
• Ohio State University ‐ Two principle dimensions
- Concern for people ‐ mutual trust with subordinates
- Concern for task – structuring tasks and goals
• Michigan Leadership studies – three criteria
- Task‐oriented – guiding employees in setting tasks that are challenging and rewarding
- Relationship oriented – considerate, helpful and supportive of subordinates
- Participative leadership – promote , foster and encourage collaboration through teamwork
what are the benefits of the behavioural approach to leadership
looks at more dimensions than trait theory
more plausible
backed up by scientific studies
potential to shape behaviour of potential leadership candidates
what are the limitations of the behavioural approach to leadership
very general and may discount peripheral influence such as background and social status
situational factors are secondary
leadership qualities highlighted in studies will not necessarily guarantee success
what is the contingency approach to leadership
More complicated that simple traits or behaviours
• Traits and behaviours interact with situational factors
Fielder’s LPC scale
• Change the leader to suit the situation, or
• Change the situation to suit the leader
• Favourability (more control) depends on relationship with and maturity of subordinates,
task structure, level and position of power
• No ideal leader, both task‐oriented or relationship‐oriented leaders can be effective
depending on the situation
• Good leadership‐subordinate relation, highly structured task, high leader position power –
favourable situation
Task oriented leaders are more effective in extremely favourable or unfavourable
situations
Relationship‐oriented leaders perform better in situations of intermediate favourability
what is the charismatic approach to leadership
Based on an individual’s ability to influence others through their own inspirational qualities
rather than through formal position power
what are the characteristics of charismatic leaders
Strong needs for power
Self confident
Strong beliefs in their ideas
Visionaries who communicate effectively
Take innovative actions to achieve their goals
Portray self‐sacrifice on behalf of the company
Astute ‘reader’ of the business environment
Often unconventional
Cultivate a certain image
Dominant and have strong desire to influence
others
what is the situational approach to leadership
• Hersey and Blanchard – define leadership in terms of the direction and support the leader
provided to subordinates
- Leadership is task relevant and adaptable to the situation
- Leadership depends on the style and the group maturity
what is the four styles of leadership under the situational approach to leadership
Directing ‐ roles defined by the leader and closely monitored
Coaching – roles defined with input from subordinates
Supporting – leader makes decisions and delegates the processes, ultimately the control
is with the follower
Delegating – leader is involved in decision making but the follower will decide when and
how the leader will be involved
Under the situational approach to leadership, what are the four levels of maturity as identified by Hersey and Blanchard
• M1 – workers lack the skill and
unwilling to take responsibility for the
job =Directing leadership style
M2 – workers lacking responsibility
for the task being done but willing to
work at the task = Coaching leadership style
• M3 – worker capable of doing the
task but lack the confidence to take
on responsibility = Supporting leadership style
M4 – workers capable and willing to
take on the responsibility= Delegating leadership style
What three things can be changed by management?
Structure
‐ authority relationships, degree of centralisation, job design
Technology
‐ flexibility, process design, improve quality
People
‐ attitudes, expectations, perceptions, behaviours, quality and
continuous improvement
why do people resist organisational change
Uncertainty – fear of the unknown
Habit – stress reduction mechanism
Concern over personal loss – power, status
Belief that its not in best interests of the organisation
list the techniques for reducing resistance to change
Education and
Communication
Participation
Facilitation and
support
Negotiation
Manipulation and
Co‐optation
Coercion
Outline education and communication (technique for reducing resistance for change)
WHEN USED
To counter misinformation
ADVANTAGE
Clear the air
DISADVANTAGE
Not suitable if trust and
credibility is lacking
outline participation (technique for reducing resistance to change)
WHEN USED
When resisters have
expertise
ADVANTAGE
Increased involvement
and acceptance
DISADVANTAGE
Time consuming,
potential for a poor
solution
outline facilitation and support (technique for reducing resistance to change)
WHEN USED
Counter fear and anxiety
ADVANTAGE
Helps staff adjust
DISADVANTAGE
Expensive
outline negotiation (technique for reducing resistance to change)
WHEN USED
Resisters are powerful
ADVANTAGE
Can “buy”
commitment
DISADVANTAGE
Expensive
outline manipulation and co-optation (technique for reducing resistance to change)
WHEN USED
When a powerful group’s
endorsement is needed
ADVANTAGE
Inexpensive
DISADVANTAGE
Can backfire
outline coercion (technique for reducing resistance to change)
WHEN USED
When a powerful group’s
endorsement is needed
ADVANTAGE
Inexpensive
DISADVANTAGE
May be illegal
define teams and define groups
Teams represent groups at their best
“ a unit of two or more people who interact and coordinate their work to accomplish a specific goal” Daft
2005
what are some of the reasons for having a team
Higher
Productivity
Higher
Flexibility
Democracy
Conflict
Resolution
Communication
Motivation
Unity of
purpose
Culture
what are 2 types of teams
Employees with similar skills
Employees with different skills
what should team selection be based on
Team selection should be based on qualifications, fit and potential to add value
list tuckman’s stages of group development
Forming
Storming
Norming
Performing
Adjourning
what is forming in tuckman’s stages of group development
Join‐up, define purpose
what is storming in tuckman’s stages of group development
Agree on leadership and direction
what is norming in tuckman’s stages of group development
‘modus operandi’ becomes accepted
what is performing in tuckman’s stages of group development
• Fully functional
what is adjourning in tuckmans stages of group development
• Group disbands
List Belbin’s Team roles
Plant
- Monitor Evaluator
- Co‐ordinator
- Resource Investigator
- Implementer
- Completer Finisher
- Teamworker
- Shaper
- Specialist
what are the two broad categories of motivation theory
Content Theories
Process Theories
List the Content Theories of Motivation
Hierarchy of Needs (Abraham Maslow)
- Existence‐Relatedness‐Growth (ERG)Theory (Clayton Alderfer
- Achievement Theory (David McClelland)
- Two‐Factor Theory (Frederick Herzberg)
what is hierarchy of needs
When one need is satisfied, others become stronger
• A satisfied need is not a motivator so timing is important
Needs: (from bottom-up) Physiological Safety Love/Belonging Esteem Self-Actualization
what are the benefits of the hierarchy of needs theory
Helps managers identify motivating
factors
Separate the physical from the
emotional
Self actualisation can be applied in
workplace scenarios through career
and personal development
what are the limitations of the hierarchy of needs theory
Simplistic, over generalised
Doesn’t consider other aspects of
human experience such as
aesthetics, culture
May satisfy higher level before lower
level
explain the ERG Theory
Existence‐Relatedness‐Growth
(ERG) Theory (Clayton Alderfer)
Existence
• Physiological and safety needs
Relatedness
• Social and external esteem needs
Growth
• Self‐actualisation and internal esteem needs
what are the benefits of the ERG Theory
Simplifies Maslow’s Hierarchy
Growth needs are especially
relevant to managers who seek to
develop employees
Needs are simultaneous
what are the limitations of the ERG Theory
Simplistic
Does not address culture
Could be viewed as just a
condense version of Maslow’s
Hierarchy
Questionable relevance in the
contemporary environment
explain the achievement theory by david mcclelland
Main factor in willingness to perform is the intensity of an individual’s actual need for
achievement
Need for achievement
Need for affiliation
Need for power
……………………………….usually one is dominant
Underlines the importance of ‘ person‐job fit
what are the benefits of the achievement theory by david mcclelland
Each element has ramifications in the workplace
Managers can develop rewards that encourage
achievement
Managers can implement social programmes to
unify the workplace and promote cohesion
what are the limitations of the achievement theory by david mcclelland
Overly general
More than one element could be predominant
for a given individual
Values like power can be interpreted very
differently across cultures
explain the two-factor theory by frederick herzberg
Focussed on the impact of the job and the environment on performance
Motivating factors primarily intrinsic
e.g. achievement, recognition, responsibility,
advancement, the work itself (job content)
Hygiene factors (extrinsic) do not motivate but absence of them can cause dissatisfaction
e.g. policies, quality of supervision, conditions,
relationships, salary, status, job security
what are the benefits of the two-factor theory by herzberg
Very applicable to the workplace
Managers can easily determine the motivators
and de‐motivators
Initiatives to develop motivations and reduce
de‐motivations can be put in place
what are the limitations of the two-factor theory by herzberg
No attempt to measure the relationship
between satisfaction and performance
Some factors are bi‐polar (both motivate
and/or de‐motivate)
No evidence that satisfied workers improve
productivity
list the process theories of motivation
Theory X, Theory Y (Douglas McGregor)
- Expectancy Theory (Victor Vroom)
- Equity Theory (John Adams)
explain the theory x, theory y motivation theory by douglas mcgregor
Based on how managers perceive employees
Theory X (Authoritarian Management)
Average person dislikes and avoids work – People must be forced with threat of punishment – Average person prefers to be directed, avoid responsibility, is unambitious and mostly just wants security
Theory Y (Participative Management)
Employees enjoy work and want a challenge – People apply self‐control and self‐ direction – Commitment is a function of rewards – Usually accept and often seek responsibility – Imaginative, creative problem solving – Intellectual potential only partly utilised
explain the expectancy theory by victor vroom
Relationship between effort put in and expectations of reward
Effort‐performance linkage
Performance‐reward linkage
Attractiveness of reward
Motivation=Expectancy x Instrumentality x Valence
Expectancy =do I believe the effort will lead to performance
Instrumentality =do I believe performance will lead to reward?
Valence = do I value the reward?
what are the benefits of the expectancy theory by victor vroom
Identifies that people decided on
what they want
It is measurable
Aims to be predictive
Clearly states that motivation is made
up of positive expectation and
positive valence together
