Exam 1 Flashcards
Three economic sectors
Public, Private, Academia
Academic sector includes:
Schools, colleges, and universities
Public Sector is:
The government; receives funding through taxes, provides public services
Private Sector:
- Run by individuals and companies
- Run in order to generate a profit
Within the private sector, there are…
Public and private companies
- Public companies are owned by shareholders
- Private companies are owned by individuals or families; small groups of people
- In addition, non-profit and non-government organizations
The Economic Cycle is
A recurring, predictable, general pattern of periodic fluctuations in national economies
There is no universally accepted theory to determine how long each cycle of an economy will last
True
What are the four stages of a market economy?
- Expansion
- Peak (Highest Point)
- Contraction
- Trough (Lowest Point)
Expansion:
- An Expansion is a time when
businesses are expanding, producing
more goods and hiring more workers - This is generally a happy time for
people because it usually means that
more money is coming into the
economy and that people and
businesses are able to afford more
things than they normally might be able
to buy
Peak:
- A Peak is usually identified AfTER it
happens because this is the time
when a country’s expansion is at its
highest level - Economists don’t really know when
the expansion is going to peak, so
they wait until production and hiring
start to fall, then identify the Peak
Contraction:
- Opposite of an expansion
- During a Contraction, production goes
down, hiring goes down, and people
are generally less happy than they are
during an expansion - A country’s output commonly
decreases during a Contraction, as
does consumer confidence
A long contraction is usually described as:
A recession
A really long contraction is usually described as:
A depression
Trough:
- Opposite of a peak
- Lowest point in an economy, proceeded with expansion
Expansion lasts for…, while a trough lasts for…
6-10 years, 6 months - 2 years
Power is:
the ability to direct or influence the behavior of others or the course of events
The Organizational Life
People use power to their advantage, to attain what they want
Organizations are made up of…
People; use them to your advantage in a exhibiting way
Organizational Politics
People use power and networking to attain a certain position or influence; a fact in all aspects of life
Political Model of Behavior
Promotions go to those who are team players, not the hardest workers
John Danforth
Did everything wrong, focused on work rather than socializing and gaining power in the company, resulted in 20 years of no promotion
Jerry & Dave
Jerry was wrong, did too much and hastened the process was right, Dave played it slow and took all things into consideration before his next move
Management Role
- Pursue company goals efficiently and effectively
- Integrate the work of people
- Plan, Organize, Lead and Control the company’s resources (POLC)
Efficient means…
To use the resources of the company effectively
Effective means…
To achieve results and make the right decisions to further grow the company
Top Managers
Make long-term decisions about the overall direction of the organization and establish the objectives, policies, and strategies for the organization – think CEO or CFO
Middle Managers
Implement the policies and plans of the top managers above them and supervise and coordinate the activities of the first-line managers below them – think Head of Marketing
First Line Managers
Make short-term operating decisions, directing the daily tasks of non-
managerial personnel – think Marketing Manager who supervises marketing writers
Team Leaders
Responsible for facilitating team activities toward achieving key results – think marketing writers who don’t supervise designers of marketing brochures or website designers but they guide them and work closely with them
Functional Managers
- Responsible for just one organizational activity
- For example, Director of Scouting for the Philadelphia Eagles
General Managers
- Responsible for several organizational activities
- For example, Howie Roseman, General Manager of the
Philadelphia Eagles, is responsible for managing the people who
run Scouting, Training, Administration, and Coaching – basically all
the departments in the Eagles’ organization report to Roseman
Interpersonal Roles
- Interact with people inside and outside their work units
- Figurehead, leader, liaison
Informational Roles
- Receive and communicate information
- Monitor, disseminator, spokesperson
Decisional Roles
- Use information to make decisions to solve problems or take
advantage of opportunities - Entrepreneur, disturbance handler, resource allocator, negotiator
Henry Mintzberg found that…
- A manager relies more on verbal than on
written communication - A manager works long hours at an
intense pace - A manager’s work is characterized by
fragmentation, brevity and variety
WWJD
“What Would Jesus Do?”, refers to the moral and ethical teachings of Jesus, implemented in business
Managers Daily Tasks
- Staff Meeting
- Budget Meeting
- Attend meetings to Kick Off a New Project
- Meet With My Boss
- Fire Someone?
- Interview Someone for a Job on Your Team
- Plus phone calls and emails!
Technical Skills
The job-specific knowledge needed to perform well in a
specialized field
Conceptual Skills
- The ability to think analytically, to visualize an
organization as a whole and understand how the
parts work together
Human Skills (Soft skills)
The ability to work well in cooperation with other
people to get things done; the ability to motivate,
to inspire trust, to communicate with others
Good managers are great listeners
True
80/20 rule states…
that one should do 80% listening, and 20% talking
Competitive advantage means…
The ability of an organization to produce goods or
services more effectively than competitors do,
thereby outperforming them
Challenges faced by managers:
- Helping your company maintain competitive
advantage - Managing information technology
- Making sure the company has a diverse
workforce - Doing business in a global economy
- Being ethical
- Managing for sustainability
Having a competitive advantage means to…
- Be responsive to consumers
- Innovations
- Quality
- Efficiency
The global business world is…
interconnected
Only 33% of small businesses survive…
more than 10 years
Who has the advantage regarding union strikes?
Typically unions due to the loss of money that companies suffer
Planning is the foundation of successful management
True
Planning
The first of the four, involves setting goals and deciding how to achieve them; ensures the plan is linked to the business strategy
Strategy involves setting direction for the long term
True
Strategy/Strategic plan
- A large-scale action plan that sets the long-term goals
and direction for an organization - Represents an “educated guess” about what must be
done in the long term for the survival or the prosperity of
the organization - Strategic plans are generally reconsidered every year
due to ever-changing business conditions
Strategic Management
- A process that involves managers from all parts of the
organization in the formulation and implementation of
strategies
Strategic management process
- Establish mission, vision, and values statement
- Assess current reality
- Formulate corporate, business, and functional strategies
- execute the strategies
- Maintain strategic control
Why are planning and strategic management so important?
- Provides direction and momentum for the business
- Encourages new ideas
- Develops a sustainable competitive advantage
Why are direction and momentum so important?
- Unless a plan is in place, managers may just focus on
whatever is in front of them and just “put out fires” all-day - Managers might be so preoccupied with day-to-day
pressures that their organizations can lose momentum
Strategy innovation is…
The ability to reinvent the basis of competition within
existing industries—“create bold new business models
that put incumbents on the defensive”
Mission statement:
What is our reason for being? Why are we here?
Vision statement:
Who do we want to become? Where do we want to go?
Values statement:
How are we going to behave as an organization?
Difference between a strategy and a plan:
- A strategy identifies what you need to do to
meet one or more business objectives - A plan explains in detail how the strategy will
be executed
BHAG
Big Hairy Audacious Goal
Goals:
A specific commitment to achieve a measurable result within a stated period of time
short-term goals
*Sometimes referred to as
tactical or operational goals,
or just plain goals
* Generally span 12 months and
are connected to strategic
goals
Long-term goals
- Generally referred to as
strategic goals - Tend to span 1 to 5 years and
focus on achieving the
strategies identified in a
company’s strategic plan
SMART Goals
- Specific
- Measurable
- Attainable
- Results-oriented
- Target dates
Peter Drucker
His big ideas:
– Management By
Objectives (MBO)
– Outsourcing
– Importance of culture
Considered Father of Management
Drucker MBO Process cycle
- Set corporate objectives
- Set and align employee objectives
- Monitor performance
- Evaluate performance
- Reward employees
- Repeat
MBO requires 3 things
- Top management must be committed to it
- Goals must be applied organization-wide
- Goals must “cascade”—be linked
consistently down through the organization
Alignment is critical
True
to achieve alignment, organizations must…
Organizations need to be aligned from top to bottom; everyone needs to be pulling in the same direction
IBM has… and generates…
282,000 employees, $60 billion annual revenue
What is a brand?
The way a company is perceived; provokes a feeling, and
Strategic principles:
- Strategy is the creation of a unique and
valuable position in the marketplace - Strategy requires trade-offs in competing
- Strategy involves creating a “fit” among
activities
Three levels of strategy
- Corporate Level
- Business Level
- Functional Level
SWOT Analysis
Strengths, Weaknesses, Opportunities, and Threats
Forecasting
predicting future events
Trend Analysis
Hypothetical extension of a past series of events
into the future
Contingency Planning
- Creation of alternative hypothetical but equally likely
future conditions - Also called scenario planning and scenario analysis
Benchmarking
Comparing your company with other competing companies to gain insight on ideas to improve your business
Retrenchment
Companies strategy to dig themselves out of a mess
vertical integration
The firm expands into businesses that provide the supplies it
needs to make its products or distribute and sell its
products
Porter’s five forces
- Threat of new entrants
- Bargaining power of buyers
- Bargaining power of suppliers
- Threat of new substitutes
- Competitive rivalry.
