business theories and models Flashcards
What is the Tannenbaum Schmidt continuum?
A model that plots amount of autonomy/freedom given to subordinates
What are the seven stages of the Tannenbaum Schmidt continuum?
Tells, Sells, Suggests, Consults, Joins, Delegates, Abdicates
What does the Tannenbaum Schmidt continuum show?
There are a range of leadership styles rather than categorising them into simply authoritarian and democratic
When is the Tannenbaum Schmidt continuum useful?
When discussing the influences, impacts, advantages and disadvantages of different management/leadership styles, discussing when a given style may be appropriate and the factors that could determine this
What is the Blake Mouton grid?
A model that highlights different management styles based on task focus and people focus
How would a manager with low task concern and low people concern on the Blake Mouton grid be described?
Impoverished (e.g. 1,1)
How would a manager with high task concern and low people concern on the Blake Mouton grid be described?
Produce or perish (e.g. 9,1)
How would a manager with low task concern and high people concern on the Blake Mouton grid be described?
Country club (e.g. 1,9)
How would a manager with high task concern and high people concern on the Blake Mouton grid be described?
Team leader (e.g. 9,9)
How would a manager with medium task concern and medium people concern on the Blake Mouton grid be described?
Middle of the road (e.g. 5,5)
When can you use the Blake Mouton grid?
When discussing the influences, impacts, advantages and disadvantages of different management styles and the factors which determine which style is used
What are the 6 stages of scientific decision making?
Set objectives, gather data, analyse data, select decision, implement decision, review
What considerations are there when using scientific decision making?
Objectives, risk/reward, effective implementation, reflecting on wrong decisions
What does a stakeholder map plot?
Stakeholders in terms of their relative power and interest
How would a stakeholder with low interest and low power on a stakeholder map be dealt with by a business?
Monitored (minimum effort)
How would a stakeholder with high interest and low power on a stakeholder map be dealt with by a business?
Kept informed
How would a stakeholder with low interest and high power on a stakeholder map be dealt with by a business?
Kept satisfied
How would a stakeholder with high interest and high power on a stakeholder map be dealt with by a business?
Managed closely
What needs to be considered when discussing a stakeholder map?
Factors that impact stakeholder power/influence, how a business may treat these groups, how stakeholders may increase their power
What is the purpose of market mapping?
To identify how products/brands are perceived by customers relative to competitors
What are the axes on a market map?
Can be anything, depends on specific criteria set out by business
What needs to be considered when using market mapping?
How customers assess products, how business wants to position themselves in a market
What are the 7 Ps of the marketing mix?
Product, price, people, place, process, promotion, physical environment
What is the purpose of the Boston Matrix?
Plots products on market share and overall market growth
How would a product with low market share in a low growth market be categorised in the Boston Matrix?
Dog
How would a product with high market share in a low growth market be categorised in the Boston Matrix?
Cash Cow
How would a product with low market share in a high growth market be categorised in the Boston Matrix?
Problem child/question mark
How would a product with high market share in a high growth market be categorised in the Boston Matrix?
Star
When is the Boston Matrix useful?
In terms of analysing how much of a business’s resources should be allocated to a particular product
What is the product life cycle?
A model that explains the typical stages a product will go through
What are the 5 stages of the product life cycle?
Development, launch, growth, maturity and decline
How does the product life cycle help businesses?
It helps businesses understand how to market, price and distribute products at each stage in order to maximise profits and extend the product’s life
What is the purpose of Hackman and Oldham’s model of job design?
To identify factors that influence the motivating potential of a job
What are Hackman and Oldham’s five core job dimensions?
Skill variety, task identity, task significance, autonomy and feedback
What is the critical psychological state that results from high skill variety, task identity or task significance in Hackman and Oldham’s model?
Experienced meaningfulness of work
What is the critical psychological state that results from high autonomy in Hackman and Oldham’s model?
Experienced responsibility for the outcomes of work
What is the critical psychological state that results from high feedback in Hackman and Oldham’s model?
Knowledge of actual results of work activities
What are the overall outcomes when a business effectively implements Hackman and Oldham’s model of job design?
High internal work motivation, high quality work performance and high satisfaction with work
When is Hackman and Oldham’s model of job design useful?
So businesses can effectively design jobs that increase job satisfaction, motivation and performance
What is Herzberg’s two-factor theory?
Theorised that some factors have the ability to provide job satisfaction (motivators) while others can only reduce job dissatisfaction (hygiene factors)
Name examples of Herzberg’s job motivators:
Sense of achievement, recognition for effort/achievement, interest in work, promotion opportunities
Name examples of Herzberg’s hygiene factors:
Company policy, amount of supervision, pay, interpersonal workplace relationships, working conditions
What does Herzberg define as ‘movement’
Short-term/temporary motivation when someone does something for a specific purpose or because they are forced to
Strengths of Herzberg’s two-factor theory:
Recognition of importance of intrinsic motivators and emphasis on job enrichment to improve employee morale
Weaknesses of Herzberg’s two-factor theory:
Limited in scope, based on small sample size, individual motivation is very complex
What is Maslow’s hierarchy of needs?
A hierarchy which has five factors of human motivation - you can’t go up the hierarchy without meeting the need below
What are the 5 factors on Maslow’s hierarchy, in order from bottom to top?
Physiological (food/water/shelter), safety (security/freedom from danger/anxiety), social (friendship/love/belonging), esteem (self-respect/respect from others), self-actualisation (fulfilling potential through actions/achievements)
Strengths of Maslow’s hierarchy:
Recognition of complexity of human motivation and usefulness in understanding individual needs
Weaknesses of Maslow’s hierarchy:
Difference in needs from person to person, lack of observed evidence
What were Taylor’s 3 main methods of improving productivity and efficiency?
Extreme division of labour into short, repetitive tasks, piece rate (payment by production) and tight management control
Strength’s of Taylor’s theory:
Emphasis on efficiency and productivity
Weaknesses of Taylor’s theory:
Division of labour leads to boring jobs, lowering morale - Taylor saw workers as machines with financial needs
What is a SWOT analysis?
A method of strategic planning where strengths, weaknesses, opportunities and threats are identified
Strengths of a SWOT analysis
Simplicity, versatility, provides a comprehensive overview
Weaknesses of a SWOT analysis
Oversimplification, potential for bias, needs accurate data
What is the premise behind Kaplan and Norton’s balanced scorecard?
The belief that financial matters aren’t the only relevant performance measures for a business
What are the four areas of performance on Kaplan and Norton’s balanced scorecard?
Financial performance, customer value performance (customer loyalty/satisfaction), internal business process performance (productivity/product quality), learning and growth performance (employee engagement/labour turnover)
Strengths of the Balanced Scorecard:
Comprehensive view of organisational performance (not just financial), facilitates communication and collaboration between departments
Weaknesses of the Balanced Scorecard:
Complexity, difficulty of implementation, needs accurate weighting of different elements
What are the three areas of Elkington’s Triple Bottom Line?
Profit, People, Planet
Strengths of Elkington’s Triple Bottom Line:
Focus on people can lead to increased productivity/morale, focus on planet can lead to increased sales/revenue (USP), increases stakeholder engagement
Weaknesses of Elkington’s Triple Bottom Line:
Difficult to measure people and planet areas, therefore impossible to total or compare all 3 aspects
What is the purpose of Carroll’s Corporate Social Responsibility pyramid?
To set out the ways in which an organisation can meet its social responsibilities
What are the 4 elements of Carroll’s pyramid, in order from bottom to top?
Economic (e.g. profit), Legal (e.g. minimum wage), Ethical (e.g. living wage), Philanthropic (e.g. charitable donations)
Strengths of Carroll’s CSR pyramid:
Acknowledges different levels of importance at each stage, framework for organisations to assess and improve CSR efforts
Weaknesses of Carroll’s CSR pyramid:
Challenge of balancing different dimensions of CSR, lack of guidance on prioritising different responsibilities
What were Porter’s five forces?
Threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products or services, intensity of competitive rivalry
How is Porter’s five forces analysis useful for businesses?
Analysing these forces allows businesses to identify opportunities and threats, meaning they can devise strategies to improve their competitive position
What is the purpose of Ansoff’s Matrix?
Sets out strategic options for a business based on whether or not it intends to venture into existing/new markets with existing/new products
In Ansoff’s Matrix, what strategy is used for a business selling an existing product in an existing market?
Market Penetration
In Ansoff’s Matrix, what strategy is used for a business selling an existing product in a new market?
Market Development
In Ansoff’s Matrix, what strategy is used for a business selling a new product in an existing market?
Product Development
In Ansoff’s Matrix, what strategy is used for a business selling a new product in a new market?
Diversification
How is Ansoff’s Matrix useful to a business?
Can plan growth strategies for products by considering different combinations of products and markets
What does Porter’s strategic matrix show?
Plots market scope of business against its preferred source of competitive advantage - ensuring difference (usp) in comparison to competitors
What would be Porter’s advised generic strategy for a business with a broad market scope and a cost-based competitive advantage?
- Cost leadership
What would be Porter’s advised generic strategy for a business with a broad market scope and a differentiation-based competitive advantage?
- Differentiation (leadership)
What would be Porter’s advised generic strategy for a business with a narrow market scope and a cost-based competitive advantage?
3a. Cost focus
What would be Porter’s advised generic strategy for a business with a narrow market scope and a differentiation-based competitive advantage?
3b. Differentiation focus
What does Porter define as cost leadership?
Becoming the lowest cost producer in an industry - either means increased profits charging same price or increased sales if business can price products lower than competitors
What does Porter define as differentiation?
A business provides a USP - seeks to meet buyer demands better than competitors and in return charges a higher price
What does Porter define as a focus strategy?
Concentration on one segment within a market (niche market)
When is Porter’s strategic matrix useful to business?
In order to evaluate and select competitive strategies in their industry
What does Bowman’s strategic clock do?
Outlines whether or not a strategy is competitive based on its perceived benefits and price
Which strategies on Bowman’s clock are unlikely to be competitive?
Low added value and high price
How is a strategy with high added value and low price on Bowman’s clock described?
Hybrid
How is a strategy with low added value and low price on Bowman’s clock described?
Low price, low added value
How is a strategy with high added value and medium price on Bowman’s clock described?
Differentiation
How is a strategy with high added value and high price on Bowman’s clock described?
Focused differentiation
What does Greiner’s growth curve show?
The crises that typically occur as a business grows
What crisis typically occurs in the first phase of growth in Greiner’s growth curve?
Leadership crisis - the leadership which has taken the business up to this point may not be effective and a more formal leadership structure is necessary. Could involve hiring external managers
What crisis typically occurs in the second phase of growth in Greiner’s growth curve?
Autonomy crisis - lower level employees begin to feel constrained by the centralised structure. Business will have to decentralise and increase other policy like collaboration
What crisis typically occurs in the third phase of growth in Greiner’s growth curve?
Control crisis - senior management can no longer control decentralised elements and business begins to lose direction - need to implement systems to monitor performance
What crisis typically occurs in the fourth stage of growth in Greiner’s growth curve?
Red tape crisis - systems implemented in previous stage can slow processes as bureaucratic red tape is needed. Business now needs to develop processes that encourage collaboration between departments without head office approval
What crisis typically occurs in the fifth stage of growth in Greiner’s growth curve?
Growth crisis - difficult for business to grow internally while maintaining appropriate control. Business may now decide to pursue external growth strategies
What is Greiner’s first stage of growth known as?
Growth through creativity
What is Greiner’s second stage of growth known as?
Growth through direction
What is Greiner’s third stage of growth known as?
Growth through delegation
What is Greiner’s fourth stage of growth known as?
Growth through coordination
What is Greiner’s fifth stage of growth known as?
Growth through collaboration
What is Greiner’s sixth stage of growth known as?
Growth through alliances
In Porter’s strategic matrix, what’s the difference between being a cost-leader with parity and a cost-leader with proximity?
Cost leader with parity charges the same price as rivals but has an increased profit margin because costs are lower, whilst cost leader with proximity has the same margins but charges less to increase sales volume
What is a major difference between Porter’s matrix and Bowman’s clock?
Porter’s matrix focuses on cost to the business while Bowman’s clock focuses on cost to customers
What does the Bartlett-Ghoshal matrix plot?
Pressure for local responsiveness (extent product needs to be adapted for local tastes) against pressure for global integration (extent international units are integrated together)
In the Bartlett-Ghoshal matrix, what strategy is suggested for a business which has low pressure for local responsiveness and low pressure for global integration?
International - business is domestically focused, products aren’t adapted for international market. Key decision making all made in head office, international departments have some freedom as not seen as important to integrate
In the Bartlett-Ghoshal matrix, what strategy is suggested for a business which has high pressure for local responsiveness and low pressure for global integration?
Multi-domestic - different regional departments of business operate independently and all products are adapted for local tastes, resources aren’t shared between departments
In the Bartlett-Ghoshal matrix, what strategy is suggested for a business which has low pressure for local responsiveness and high pressure for global integration?
Global - products standardised globally and very centralised. These businesses tend to be very efficiently run (economies of scale and management efficiencies)
In the Bartlett-Ghoshal matrix, what strategy is suggested for a business which has high pressure for local responsiveness and high pressure for global integration?
Transnational - attempts to maximise responsiveness and integration through extreme sharing of resources and ideas while also locally adapting products
What are some risks of utilising an internationalisation strategy?
Cultural differences in behaviour and taste, ethical standards, anti-globalisation sentiment, political instability
Why is the nature of the product so important when deciding which of Bartlett and Ghoshal’s strategies to use?
Some products (e.g. oil) will be extremely standardised across the world whilst in other industries (e.g. publishing) significant alterations will be needed
What does Lewin’s force field analysis show?
The fact that a business will usually stay at an equilibrium, as the forces for change and forces against change cancel each other out
How is Lewin’s force field analysis useful to a business?
Gives management a framework to analyse the situation - can see how they could overcome resistance or increase pressure against change depending on the situation
What are some examples of forces pushing for change in Lewin’s force field?
Keeping up with competition, poor performance, ownership wanting increased returns, increasing customer complaints
What are some examples of forces resisting change in Lewin’s force field?
Lack of finance, reluctance from staff, resistance from stakeholders
What could occur to spark change in Lewin’s force field?
Drivers for change could increase (business falling further behind), forces resisting could decrease (employees could become more open)
What were Kotter and Schlesinger’s four main reasons for employee resistance?
Self-interest (individual may be worse off), preference for status quo (not liking change), differing assessment (disagreeing with management on change), misunderstanding (employees may think everything is fine)
When is Kotter and Schlesinger’s model of reasons for resisting change useful?
When analysing why change isn’t happening the business can categorise it into one of these quadrants
What were Kotter and Schlesinger’s six methods of overcoming resistance to change?
Education, facilitation/support, participation/involvement, manipulation/co-option, negotiation/bargaining, coercion
What may influence which of Kotter and Schlesinger’s methods of overcoming resistance are used?
Original reasons for employee resistance
What are Handy’s four cultures?
Power (web), role (pillars), task (grid), person (cookie)
What does Handy’s power culture consist of?
Extreme centralisation, small number of key people make all key decisions
What are the positives of Handy’s power culture?
Quick decision making, consistent approach
What are the negatives of Handy’s power culture?
Puts great pressure on those at the centre, subordinates may feel underutilised
What does Handy’s role culture consist of?
Each individual in the organisation has a clearly defined role and know who they report to and are responsible for - identify with specific department
What are the strengths of Handy’s role culture?
Certainty of structure, increased efficiency and productivity
What are the weaknesses of Handy’s role culture?
Resistance to change, lack of adaptability, increased bureaucracy
What does Handy’s task culture consist of?
Individuals identify with the specific tasks they are given - common in businesses with many projects
What are the strengths of Handy’s task culture?
Collaboration, innovation, creativity
What are the weaknesses of Handy’s task culture?
Lack of structure, confusion over individual responsibility, lack of focus/bigger picture thinking
What does Handy’s person culture consist of?
Individuals all have extreme freedom and responsibility in the business, given own parts of business to control
What are the strengths of Handy’s person culture?
Employee self-fulfillment, creativity and innovation, personal development
What are the weaknesses of Handy’s person culture?
Lack of cohesion across business, lack of direction, limited effectiveness in achieving group or corporate objectives
What are Hofstede’s five national culture differentiators?
Individualism vs collectivism, power distance, short-termism vs long-termism, masculinity vs femininity, uncertainty avoidance
In Hofstede’s theory, what is meant by individualism vs collectivism? (IDV)
The extent to which individuals believe they should look after themselves rather than be team players
In Hofstede’s theory, what is meant by power distance? (PDI)
The extent to which society accepts that power is distributed unequally
In Hofstede’s theory, what is meant by short termism vs longtermism?
How long-term employees are in their thinking
In Hofstede’s theory, what is meant by masculinity vs femininity?
Are the dominant values in a firm ‘masculine’ (focusing on assertiveness and money) or ‘feminine’ (focusing on concern for others and quality of relationships)
In Hofstede’s theory, what is meant by uncertainty avoidance?
The extent to which employees feel threatened by ambiguity and the extent to which they like rules and a well defined career structure
When is Hofstede’s theory useful for managers?
When considering issues that may emerge when businesses from across the world collaborate or join together
What are the four stages of the strategic drift model?
Incremental change, strategic change, flux, transformational change or demise
What does the strategic drift model plot?
Business change, environmental (external) change and time
What is strategic drift?
When the strategy of the business no longer matches with the environment in which it operates
What are the main causes of strategic drift?
Failure to identify changes, failure to react to change quickly enough, pressures against change to strategy are too great, managerial denial
When is the strategic drift model useful?
When analysing external market changes and reviewing how well a business has adapted to this
