Chapter 6

Question 1

Managers

Answer 1

People who plan, organize, lead and control the operations of an organization.

Question 2

Management process

Answer 2

Process of planning, organizing, leading, and controlling an enterprise’s financial, physical, human, and information resources to achieve goals.

Question 3

Efficiency vs Effectiveness

Answer 3

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”)

Question 4

Planning

Answer 4

Process of determining and developing a strategy for a firm’s goal

Question 5

Organizing

Answer 5

Gathering resources to complete a task

Question 6

Leading

Answer 6

Interactions between managers and subordinates. Besides simply barking orders, leading also include motivation through challenge goals and working hard to achieve them.

Question 7

Controlling

Answer 7

Monitoring firm’s performance to make sure goals are being met

Question 8

Levels of management

Answer 8

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

Question 9

Areas of management

Answer 9

Human resources
Operations
Information
Financial 
Marketing

Question 10

Interpersonal roles

Answer 10

Figurehead (duties of ceremonial nature, attending weddings, etc)
Leader (being responsible at work)
Liaison (making contact outside the vertical food chain)

Question 11

Informational roles

Answer 11

Monitor (scanning environment for info)
Disseminator (passing info to subordinates)
Spokesperson (sending info to people outside the unit)

Question 12

Decision making roles

Answer 12

Entrepreneur (improving performance)
Disturbance handler (handling high-pressure disturbances)
Resource allocator (deciding who gets what)
Negotiator (working out agreements)

Question 13

Technical skill

Answer 13

Management skill;

Allows managers to perform specialized tasks, especially important to front-line managers

Question 14

Human relations skills

Answer 14

Management skill;
Helps manager to lead, motivate, communicate with, and get along with subordinates. Important to all levels of management.

Question 15

Conceptual

Answer 15

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

Question 16

Time management

Answer 16

Management skill;

Helps managers use their time productively.

Question 17

Decision making

Answer 17

Management skill;

Helps define problems and select best course of action

Question 18

Three basic decision characteristics

Answer 18

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

Question 19

Emotional factors that influence logical decisions

Answer 19

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)

Question 20

Strategic management

Answer 20

Process of aligning an organization with its environment. Every strategic management starts with setting goals.

Question 21

Strategy

Answer 21

Broad set of plans made to achieve organizational goals

Question 22

Goals vs Plans

Answer 22

Goals: what results are desired
Plans: How goals are to be achieved

Question 23

Vision/purpose vs Mission statement

Answer 23

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

Question 24

Steps of formulating strategy

Answer 24

1. Set strategic goals (comes from the mission statement)
2. Analyze organization and its environment
3. Match the organization and environment
4. Carry out the strategy through hierarchy

Question 25

Hierarchy of plans

Answer 25

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.

Question 26

SWOT analysis

Answer 26

Strengths and Weaknesses (organizational)

Opportunities and Threats (Environmental)

Question 27

Corporate level strategy (concentration)

Answer 27

Focusing on one product or product line the company knows well

Question 28

Corporate level strategy (growth)

Answer 28

Market penetration (boosting sales by aggressive tactics) 
Geographic expansion (expanding operations into new areas)
Product development (developing improved products)
All international activities for growth

Question 29

Corporate level strategy (integration)

Answer 29

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

Question 30

Corporate level strategy (diversification)

Answer 30

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)

Question 31

Corporate level strategy (investment reduction)

Answer 31

Retrenchment: Reduction of activity or operations, i.e., target leaving Canada
Divestment: Selling or liquidating one or more of a firm’s business

Question 32

Business/Competitive level strategy

Answer 32

How to compete in the chosen line of product

1. Cost leadership (become the low-cost leader in an industry)
2. Differentiation (Being unique in its industry)
3. Focus strategy (select a market segment and serve those customers better than anyone else)

Question 33

Functional Strategies

Answer 33

What each department follows to accomplish goals