Chapter 6 Flashcards
Managers
People who plan, organize, lead and control the operations of an organization.
Management process
Process of planning, organizing, leading, and controlling an enterprise’s financial, physical, human, and information resources to achieve goals.
Efficiency vs Effectiveness
Efficiency: Producing the greatest level of output with a given input (“Doing things right”)
Effectiveness: Achieving the organization’s set goals (“Doing the right things”)
Planning
Process of determining and developing a strategy for a firm’s goal
Organizing
Gathering resources to complete a task
Leading
Interactions between managers and subordinates. Besides simply barking orders, leading also include motivation through challenge goals and working hard to achieve them.
Controlling
Monitoring firm’s performance to make sure goals are being met
Levels of management
Top: formulate strategies, oversee significant decisions, and represent company against the company
Middle: Implement strategy made by the top
First line: works with employees who report to them
Areas of management
Human resources Operations Information Financial Marketing
Interpersonal roles
Figurehead (duties of ceremonial nature, attending weddings, etc)
Leader (being responsible at work)
Liaison (making contact outside the vertical food chain)
Informational roles
Monitor (scanning environment for info)
Disseminator (passing info to subordinates)
Spokesperson (sending info to people outside the unit)
Decision making roles
Entrepreneur (improving performance)
Disturbance handler (handling high-pressure disturbances)
Resource allocator (deciding who gets what)
Negotiator (working out agreements)
Technical skill
Management skill;
Allows managers to perform specialized tasks, especially important to front-line managers
Human relations skills
Management skill;
Helps manager to lead, motivate, communicate with, and get along with subordinates. Important to all levels of management.
Conceptual
Management skill;
Ability to think in the abstract, diagnose and analyze various situations, to see beyond the current state. Helps to define opportunity and threats. Most important to top managers
Time management
Management skill;
Helps managers use their time productively.
Decision making
Management skill;
Helps define problems and select best course of action
Three basic decision characteristics
Problem (problem must be fixed) vs Opportunity (opportunity presents itself) decisions
Programmed (made frequently, routine work) vs Non-programmed (made infrequently, poorly structured) decisions
Decisions under risks
Emotional factors that influence logical decisions
Organizational politics (people do things for their benefit, not the firms)
Intuition (“hunch”)
Escalation of commitment (managers committed too much to turn back)
Risk propensity (depends on manager, how willing they are to take risks)
Strategic management
Process of aligning an organization with its environment. Every strategic management starts with setting goals.
Strategy
Broad set of plans made to achieve organizational goals
Goals vs Plans
Goals: what results are desired
Plans: How goals are to be achieved
Vision/purpose vs Mission statement
Vision/purpose: why a company exists, what kind of organization they want to be
Mission statement: how they will achieve the purpose
Possible for two firms to have similar vision but carry it out in very contrasting mission statements
Steps of formulating strategy
- Set strategic goals (comes from the mission statement)
- Analyze organization and its environment
- Match the organization and environment
- Carry out the strategy through hierarchy
Hierarchy of plans
Top: Strategic plans; resource allocations, company priorities, and meeting strategic goals
Middle: Tactical plans; shorter range ones, concerned with implementing the specific aspect’s of the strategic plan
Front line: Operational plans; Short term targets for daily, weekly, and monthly performances.
SWOT analysis
Strengths and Weaknesses (organizational)
Opportunities and Threats (Environmental)
Corporate level strategy (concentration)
Focusing on one product or product line the company knows well
Corporate level strategy (growth)
Market penetration (boosting sales by aggressive tactics) Geographic expansion (expanding operations into new areas) Product development (developing improved products) All international activities for growth
Corporate level strategy (integration)
Horizontal (acquiring control of competitors in the same or similar markets)
Vertical (owning or controlling multiple stages of production, i.e., manufacture, distribution, etc., that most companies outsource to separate companies.
All external activities for growth
Corporate level strategy (diversification)
Related diversification (adding new products/services that is related to an existing business) Conglomerate diversification (diversifying into markets/products that isn't related to the current businesses)
Corporate level strategy (investment reduction)
Retrenchment: Reduction of activity or operations, i.e., target leaving Canada
Divestment: Selling or liquidating one or more of a firm’s business
Business/Competitive level strategy
How to compete in the chosen line of product
- Cost leadership (become the low-cost leader in an industry)
- Differentiation (Being unique in its industry)
- Focus strategy (select a market segment and serve those customers better than anyone else)
Functional Strategies
What each department follows to accomplish goals
