Exam 2 Flashcards
• Four forces within the task environment
o Suppliers
o Competitors
o Distributers
o Customers
• Economies of scale
o Cost advantages associated with large operations
• Individualism
o worldview that values individual freedom and self-expression and adherence to the principle that people should be judged by their individual achievements rather than social background
• Bounded rationality
o Cognitive limitations that constrain one’s ability to interpret, process, and act on information
• Four steps of the control process
o Establish standards
o Measure actual performance
o Compare yourself to the standards
o Follow up if necessary
• Four factors affecting organizational structure
o Environment
o Technology
o Human Resources
o Own strategy
• Job enlargement
o Increasing the number of different tasks in a given job by changing the division of labor
• Job enrichment
o Increasing the degree of responsibility a worker has over a job
• Diversity
o Dissimilarities or differences among people due to age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background, education, experience, physical appearance, capabilities and disabilities, and any other characteristic that is used to distinguish between people
• Distributive justice
o A moral principle calling for fair distribution of pay, promotions, and other organizational resources based on meaningful contributions that individuals have made and not personal characteristics over which they have no control
o Distribute opportunities equally amongst all people
• Socioeconomic background
o Refers to a combination of social class and income-related factors o Socioeconomic diversity requires that managers be sensitive and responsive to the needs and concerns of individuals who might not be as well off as others.
• Schema
o An abstract knowledge structure stored in memory that allows people to organize and interpret information about a person, event, or situation
• Span of control
o The number of subordinates that report to the manager
• Group thinking
o A group deciding on something just to get the task over with
You give up different ideas being produced
• Functional structure
o An organizational structure composed of all the departments that an organization requires to produce its goods or services
• Divisional structure
o An organizational structure composed of separate business units within which are the functions that work together to produce a specific product for a specific customer
o Product, market, geographic
• Matrix structure
o An organizational structure that simultaneously groups people and resources by function and product
o The structure is the most flexible
• Five forces in the general environment
o Technology o Sociocultural o Demographic o Political/legal o Economic
• Risk
o The degree of probability that the possible outcomes of a particular course of actions will occur
• Uncertainty
o The probability of alternative outcomes cannot be determined and future outcomes are unknown
• Management by objectives (MBO)
o A goal-setting process in which a manager and each of his or her subordinates negotiate specific goals and objectives for the subordinate to achieve and then periodically evaluate the extent to which the subordinate is achieving those goals.
• Technological Forces
o outcomes of changes in technology
• Devil’s Advocacy
o Critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented
o One member of the group acts as the devil’s advocate by critiquing the way the group identified alternatives and pointing out problems with the alternative selection.
o Play the pessimist
• Dialectical Inquiry
o Two different groups are assigned to the problem and each group is responsible for evaluating alternatives and selecting one of them
o Top managers then hear each group present their alternatives and each group can critique the other
• Evolutionary change
o Gradual, incremental, and narrowly focused
o Constant attempt to improve, adapt, and adjust strategy and structure incrementally to accommodate changes in the environment
• Revolutionary change
o Rapid, dramatic, and broadly focused
o Involves a bold attempt to quickly find ways to be effective
o Likely to result in a radical shift in ways of doing things, new goals, and a new structure for the organization
• Overt discrimination
o Knowingly and willingly denying diverse individuals access to opportunities and outcomes in an organization
o Unethical and illegal
• Diversity
o Dissimilarities or differences among people due
to age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background,
education, experience, physical appearance, capabilities and disabilities, and any other
characteristic that is used to distinguish between people
• Socioeconomic background
o Refers to a combination of social class and income-related factors
• Distributive justice
o A moral principle calling for fair distribution of pay, promotions, and other organizational resources based on meaningful contributions that individuals have made and not personal characteristics over which they have no control
• Procedural justice
o A moral principle calling for the use of fair procedures to determine how to distribute outcomes to organizational members
• Stereotype
o Simplistic and often inaccurate beliefs about the typical characteristics of particular groups of people
• Bias
o The systematic tendency to use information about others in ways that result in inaccurate perceptions
• Similar-to-me effect
o Perceive others who are similar to ourselves more positively than we perceive people who are different
• Social status effect
o Perceive individuals with high social status more positively than those with low social status
• Salience effect
o Focus attention on individuals who are conspicuously different
• Quid pro quo
o Asking for or forcing an employee to perform sexual favors in exchange for receiving some reward or avoiding negative consequences
• Hostile work environment
o Telling lewd jokes, displaying pornography, making sexually oriented remarks about someone’s personal appearance, and other sex-related actions that make the work environment unpleasant
• Demographic forces
o Outcomes of change in, or changing attitudes toward, the characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class
• Political and legal forces
o Outcomes of changes in laws and regulations, such as deregulation of industries, privatization of organizations, and increased emphasis on environmental protection
• Norms
o Unwritten, informal codes of conduct that prescribe how people should act in particular situations and are considered important by most members of a group or organization
• Individualism
o A worldview that values individual freedom and self-expression and adherence to the principle that people should be judged by their individual achievements rather their social background
• Collectivism
o A worldview that values subordination of the individual to the goals of the group and adherence to the principle that people should be judged by their contribution to the group
• Administrative model
o An approach to decision making that explains why decision making is inherently uncertain and risky and why managers usually make satisfactory rather than optimum decisions
• Bounded rationality
o Cognitive limitations that constrain one’s ability to interpret, process, and act on information
• Groupthink
o Pattern of faulty and biased decision making that occurs in groups whose members strive for agreement among themselves at the expense of accurately assessing information relevant to a decision
• Brainstorming
o Managers meet face-to-face to generate and debate many alternatives.
• Entrepreneurs
o An individual who notices opportunities and decides how to mobilize the resources necessary to produce new and improved goods and services
• Intrapreneurs
o A manager, scientist, or researcher who works inside an organization and notices opportunities to develop new or improved products and better ways to make them
• Skunkworks
o A group of intrapreneurs who are deliberately separated from the normal operation of an organization to encourage them to devote all their attention to developing new products
• Organizational structure
o Formal system of task and reporting relationships that coordinates and motivates organizational members so they work together to achieve organizational goals
Four components of organizational structure
Organizational environment
Technology
Strategy
Human Resources
• Job simplification
o The process of reducing the number of tasks that each worker performs
• Job enlargement
o Increasing the number of different tasks in a given job by changing the division of labor
• Job enrichment
o Increasing the degree of responsibility a worker has over a job
• Functional structure
o An organizational structure composed of all the departments that an organization requires to produce its goods or services
• Divisional structure
o An organizational structure composed of separate business units within which are the functions that work together to produce a specific product for a specific customer
o Product, market, geographic
• Product structure
o Managers place each distinct product line or business in its own self-contained division.
o Divisional managers have the responsibility for devising an appropriate business-level strategy to allow the division to compete effectively in its industry or market.
• Geographic structure
o Divisions are broken down by geographic location
• Market structure
o Groups divisions according to the particular kinds of customers they serve
o Allows managers to be responsive to the needs of their customers and act flexibly in making decisions in response to customers’ changing needs
• Matrix structure
o An organizational structure that simultaneously groups people and resources by function and product
o The structure is very flexible
o Each employee has two bosses
• Tall structures
o Have many levels of authority and narrow spans of control.
o As hierarchy levels increase, communication gets difficult, creating delays in the time being taken to implement decisions.
o Communications can also become distorted as it is repeated through the firm.
o Such structures can become expensive.
• Flat structures
o have fewer levels and wide spans of control
• Decentralizing authority
o Giving lower-level managers and non-managerial employees the right to make important decisions about how to use organizational resources
Input Stage
Feed-forward control
Anticipate problems before they occur
Conversion stage
Concurrent control
Manage problems as the occur
Output stage
Feedback control
Manage problems after they arise
• Profit ratios
o Measure how efficiently managers are using the organization’s resources to generate profits
• Return on investment (ROI)
o Organization’s net income before taxes divided by its total assets
o Most commonly used financial performance measure
• Operating margin
o Calculated by dividing a companies operating profit by sales revenue
o Provides managers with information about how efficiently an organization is utilizing its resources
• Liquidity ratios
o Measure how well managers have protected organizational resources to be able to meet short-term obligations (managing cash flows)
• Leverage ratios
o Measure the degree to which managers use debt or equity to finance ongoing operations
• Activity ratios
o Show how well managers are creating value from organizational assets
• Days sales outstanding
o Reveals how efficiently managers are collecting revenue from customers to pay expenses
• Bureaucratic control
o Control by means of a comprehensive system of rules and standard operating procedures (SOPs) that shapes and regulates the behavior of divisions, functions, and individuals
o This management style requires mastery of “follow up”
• Clan control
o The control exerted on individuals and groups in an organization by shared values, norms, standards of behavior, and expectations
• Lewin’s Force-Field Theory of Change
The resistance to change goes down as time goes on
• Top-down change
o A fast, revolutionary approach to change in which top managers identify what needs to be changed and then move quickly to implement the changes throughout the organization – sustainable? – No, the people at the bottom don’t believe in it
• Bottom-up change
o A gradual or evolutionary approach to change in which managers at all levels work together to develop a detailed plan for change – fast enough? – no, takes a very long time to implement
