Exam 3 Flashcards
Enlargement
Increasing the number of different tasks in a given job by changing the
division of labor
Enrichment
■ Increasing the degree of responsibility a worker has over a job
Functional Structures
An organizational structure composed of all the departments that an organization
requires to produce its goods or services
Advantages of functional structures
Learning from others doing similar jobs
● Easy for managers to monitor and evaluate
● Allows managers to create a set of functions they need in order
to to scan and monitor the competitive environment
Disadvantages of functional structures
Difficult for departments to communicate with others
● Preoccupation with own department, losing sight of organizational
goals
Divisional Structure
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
○ Product, Market, Geographic
Product Matrix
An organizational structure that simultaneously groups people and resource by function and product ○ The structure is very flexible ○ Each employee has two bosses
Span of Control
○ The number of subordinates who report directly to a manager
Tall Structures
- have many levels of authority and narrow spans of control
■ As hierarchy levels increase, communication gets difficult, creating delays
in the time being taken to implement decisions
■ Communications can also become distorted as it is repeated through the
firm
■ Such structures can become expensive
Flat Structures
have fewer levels and wide spans of control
3 Types of Control
● Output
● Behavior
● Clan
ROI
Organization’s net income before taxes divided by its total assets. Most commonly used
financial performance measure
Profit ratios
Measure how efficiently managers are using the organization’s resources to generate
profits
Operating margin
Calculated by dividing a company’s operating profit by sales revenue
● Provides managers with information about how efficiently an organization is utilizing its
resources
Liquidity ratios
Measure how well managers have protected organizational resources to be able to meet
short-term obligations (managing cash flows)
Leverage ratios
● Measure the degree to which managers use debt or equity to finance ongoing operations
How much money do you have vs how much do you owe
Inventory turnover
Measures how efficiently managers are turning inventory over so excess inventory is not
carried
Days sales outstanding
● Reveals how efficiently managers are collecting revenue from customers to pay expenses
Bureaucratic control
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
This management style requires mastery of “follow up”
Evolutionary change
Gradual, incremental, and narrowly focused
● Constant attempt to improve, adapt, and adjust strategy and structure incrementally to
accommodate changes in the environment
Revolutionary change
Rapid, dramatic, and broadly focused
● Involves a bold attempt to quickly find ways to be effective
● Likely to result in a radical shift in ways of doing things, new goals, and a new structure
for the organization
● Intrinsically motivated behavior
○ behavior performed for its own sake
● Extrinsically motivated behavior
○ behavior performed to acquire material or social rewards to avoid punishment
● Expectancy theory
motivation will be high when workers believe that high levels of effort lead to high
performance and that high performance leads to the attainment of desired
outcomes
● Need theories
Theories of motivation that focus on what needs people are trying to satisfy at
work and what outcomes will satisfy those needs
Need: a requirement or necessity for survival and well-being
● Maslow’s Hierarchy of needs
- an arrangement of five basic needs that motivate behavior
○ He proposed that the lowest level of unmet needs is the prime motivator and that
only one level needs motivation at a time
● Procedural justice
A person’s perception of the fairness of the procedures that are used to
determine how to distribute outcomes in an organization
● Distributive justice
A person’s perception of the fairness of the distribution of outcomes in an
organization
● Goal setting theory
A theory that focuses on identifying the types of goals that are most effective in producing high levels of motivation and performance and explaining why goals
have these effects
● Operant Conditioning Theory
People learn to perform behaviors that lead to desired consequences and learn
not to perform behaviors that lead to undesired consequences
● Servant Leader
○ a leader who has a strong desire to serve and work for the benefit of others
● Five Sources of Managerial Power
Legitimate power Reward power Coercive power Expert power Referent power
○ Legitimate Power
the authority that a manager has by virtue of his or her position in an
organization’s hierarchy.
○ Reward Power
the ability of a manager to give or withhold tangible and intangible
rewards
○ Coercive Power
■ the ability of a manager to punish others
○ Expert Power
Power that is based on special knowledge, skills, and expertise that the
leader possess
○ Referent Power
Power that comes from subordinates’ and coworkers’ respect, admiration,
and loyalty.
Relationship-oriented style
Leaders concerned with developing good relations with their subordinates and to be
liked by them.
Task-oriented style
Leaders who primary concern is to ensure that subordinates perform at a high level so
the job gets done.
Charismatic Leader
an enthusiastic, self-confident transformational leader able to clearly communicate his
vision of how good things could be
● Openly sharing information with employees
Intellectual stimulation
Behavior a leader engages in to make followers be aware of problems and view these
problems in new ways, consistent with the leader’s vision.
Developmental consideration
Behavior a leader engages in to support and encourage followers and help them
develop and grow on the job.
Transformational Leadership
Makes subordinates aware of how important their jobs are for the organization and how
necessary it is for them to perform their jobs as best they can so the organization can
attain its goals
Emotional Intelligence
Positive moods = better coordination
● Negative Moods = more effort
Group
Two or more people who interact with each other to accomplish certain goals or
meet certain needs
Team
A group whose members work intensely with each other to achieve specific,
common goal or objective
● Conformity and Deviance
Members conform to norms to obtain rewards, imitate respected members, and
because they feel the behavior is right.
○ When a member deviates, other members will try to make them conform, expel
the member, or change the group norms to accommodate them.
● Advantages of large groups
More resources at their disposal to achieve group goals
○ Enables managers to obtain division of labor advantages
Disadvantages of large groups
Problem of communication and coordination
○ Lower level of motivation
○ Members might not think their efforts are really needed
● Communication:
The sharing of information between two or more individuals or groups to reach a
common understanding.
● Sender:
○ Person wishing to share information.
Message
○ the information the sender wants to share.
Encoding
○ translating a message into understandable language or symbols.
Noise
○ anything that hampers any stage of the communication process.
● Receiver:
○ the person or group for which the message is intended
Medium
○ the pathway through which an encoded message is transmitted to a receiver.
● Decoding:
○ interpreting and trying to make sense of a message.
● Verbal Communication:
○ the encoding of messages into words, written or spoken.
● Nonverbal Communication:
the encoding of messages by means of facial expressions, body language, and
styles of dress.
● Information richness:
The amount of information that a communication medium can carry and the
extent to which the medium enables the sender and receiver to reach a common
understanding.
● Management by wandering around:
A face to face communication technique in which a manager walks around a
work area and talks informally with employees about concerns.
● Organization Chart:
Horizontal communications flow between employees of the same level. Informal
communications can span levels and departments
● Face-to-Face Communication:
High information richness and can take advantage of both verbal and nonverbal
signals
Grapevine
○ An informal network carrying unofficial information throughout the firm
● Information Overload:
The potential for important information to be ignored or overlooked while
tangential information receives attention
● Communication skills for Managers as receivers
Pay attention
○ Be a good listener
○ Be empathetic
•Different evaluation or reward systems
A group is rewarded for achieving a goal, but another interdependent group is rewarded for
achieving a goal that conflicts with the first group.
•Task interdependencies
One member of a group or a group fails to finish a task that another member or group
depends on, causing the waiting worker or group to fall behind.
Scarce resources
Managers can come into conflict over the allocation of scarce resources
Status inconsistencies
Some individuals and groups have a higher organizational status
than others, leading to conflict with lower-status groups.
Compromise
Each party is concerned about not only their goal accomplishment but also the
goal accomplishment of the other party and is willing to engage in a give-and-take exchange to
reach a reasonable solution
Collaboration
Both parties try to satisfy their goals by coming up with an approach that leaves
them both better off and does not require concessions on issues that are important to either
party.
Accommodation
An ineffective conflict-handling approach in which one party gives in to the
demands of the other.
Avoidance
An ineffective conflict - handling approach in which the parties try to ignore the
problem and do nothing to resolve their differences
Competition
An ineffective conflict-handling approach in which each party tries to maximize its
own gain and has little interest in understanding the other party’s position and arriving at a
solution that will allow both parties to achieve their goals.
Negotiation
method of conflict resolution in which parties consider various alternative ways to
allocate resources to come up with a solution acceptable to all.
Third Party Negotiator
An impartial individual with expertise in handling conflicts and
negotiations who helps parties in conflict reach an acceptable solution
Mediators
Facilitates negotiations but has no authority to impose a solution
Arbitrators
Can impose what he thinks is a fair solution to a conflict that both parties are
obligated to pursue.
Design of organizational structure
Organizational environment
Technology
Strategy
Human Resources
Input stage
Anticipate problems before they occur
Conversion stage
Manage problems as they occur
Output stage
Manage problems after they arise
• Efficiency
– A measure of how well or how productively resources are used to achieve a goal
• Effectiveness
– A measure of the appropriateness of the goals an organization is pursuing and the degree to which the organization achieves those goals
Controlling
Establish accurate measuring and monitoring systems to evaluate how well the organization has achieved its goals
Leading
Motivate, coordinate, and energize individuals and groups to work together to achieve organizational goals
Organizing
Establish task and authority relationships that allow people to work together to achieve organization goals
Planning
Choose appropriate organizational goals and courses of action to best achieve these goals
• Steps in the Planning Process
– Deciding which goals the organization will pursue
– Deciding what strategies to adopt to attain those goals
– Deciding how to allocate organizational resources
• Leading
• Articulating a clear vision and energizing and enabling organizational members so they understand the part they play in achieving organizational goals
• Controlling
• Evaluating how well an organization is achieving its goals and taking action to maintain or improve performance
• Conceptual skills
• The ability to analyze and diagnose a situation and distinguish between cause and effect
• Human skills
• The ability to understand, alter, lead, and control the behavior of other individuals and groups
• Technical skills
• Job-specific skills required to perform a particular type of work or occupation at a high level
• Core competency
- Specific set of departmental skills, abilities, knowledge and experience that allows one organization to outperform its competitors
- Skills for a competitive advantage
• Competitive advantage
• Ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than its competitors
• Innovation
• The process of creating new or improved goods and services or developing better ways to produce or provide them
• Administrative management
• The study of how to create an organizational structure and control system that leads to high efficiency and effectiveness
• Behavioral management
• The study of how managers should personally behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals
• Hawthorne effect
- Workers’ performance affected by their attitudes about their managers
- Individual behavior is modified in response to their awareness of being observed. In other words, increased attention leads to temporary increased productivity. Results are not sustainable.
• Theory X
• A set of negative assumptions about workers that leads to the conclusion that a manager’s task is to supervise workers closely and control their behavior
• Theory Y
• A set of positive assumptions about workers that leads to the conclusion that a manager’s task is to create a work setting that encourages commitment to organizational goals and provides opportunities for workers to be imaginative and to exercise initiative and self-direction
• Management science theory
• Contemporary approach to management that focuses on the use of rigorous quantitative techniques to help managers make maximum use of organizational resources to produce goods and services
• Quantitative management
• Utilizes mathematical techniques, like linear programming, modeling, simulation, and chaos theory
• Operations management
• Gives managers a set of techniques they can use to analyze any aspect of an organization’s production system to increase efficiency
• Contingency theory
• The idea that the organizational structures and control systems managers choose depend on
(are contingent on) characteristics of the external environment in which the organization
operates
• “There is no one best way to organize”
• Mechanistic structure
• An organizational structure in which authority is centralized, tasks and rules are clearly specified, and employees are closely supervised
• Organic structure
• An organizational structure in which authority is decentralized to middle and first-line managers and tasks and roles are left ambiguous to encourage employees to cooperate and respond quickly to the unexpected
• Negative affectivity
• Tendency to experience negative emotions and moods, feel distressed, and be critical of oneself and others
• Agreeableness
• Tendency to get along well with others
• Conscientiousness
• Tendency to be careful, scrupulous, and persevering
• Internal locus of control
- Belief that you are responsible for your own fate
* Own actions and behaviors are major and decisive determinants of job outcomes
• External locus of control
• The tendency to locate responsibility for one’s fate in outside forces and to believe one’s own behavior has little impact on outcomes
• Terminal values
• A lifelong goal or objective that an individual seeks to achieve
• Instrumental values
• A mode of conduct that an individual seeks to follow
• Emotional intelligence
- The ability to understand and manage one’s own moods and emotions and the moods and emotions of other people
- Helps managers carry out their interpersonal roles of figurehead, leader, and liaison
Utilitarian rule
An ethical decision should produce the greatest good for the greatest number of people
Moral rights rule
An ethical decision should maintain and protect the fundamental rights and privileges of people
Justice rule
An ethical decision should distribute benefits and harm among people in a fair, equitable, and impartial manor
Practical rule
An ethical decision should be one that a manager has no hesitation about communicating to people outside the company because the typical person in a society would think the decision is acceptable
• Obstructionist approach
• Companies and their managers choose not to behave in a socially responsible way and
instead behave unethically and illegally
• Defensive approach
• Companies and their managers behave ethically to the degree that they stay within the law and strictly abide by legal requirements
• Accommodative approach
• Companies and their managers behave legally and
ethically and try to balance the interests of different stakeholders as the need arises
• Proactive approach
• Companies and their managers actively embrace socially responsible behavior, going out of their way to learn about the needs of different
stakeholder groups and using organizational resources to promote the interests of all
stakeholders
• Distributive justice
• 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
• A moral principle calling for the use of fair procedures to determine how to distribute outcomes to organizational members
• Similar-to-me effect
• Perceive others who are similar to ourselves more positively than we perceive people who are different
• Social status effect
• Perceive individuals with high social status more positively than those with low social status
• Salience effect
• Focus attention on individuals who are conspicuously different
• Overt discrimination
- Knowingly and willingly denying diverse individuals access to opportunities and outcomes in an organization
- Unethical and illegal
• Sociocultural Forces
• Pressures emanating from the social structure of a country or society or from the national culture
• Human capital
• The flow of people around the world through immigration, migration, and emigration
• Financial capital
• The flow of money capital across world markets through overseas investment, credit, lending, and aid
• Resource capital
• The flow of natural resources, parts, and components between companies and countries, such as metals, minerals, lumber, energy, food products, microprocessors, and auto parts
• Political capital
• The flow of power and influence around the world using diplomacy, persuasion, aggression, and force of arms to protect the right or access of a country, world region, or political bloc to the other forms of capital
• Mores
• Norms that are considered to be central to the functioning of society and to social life
• Folkways
• The routine social conventions of everyday life
• Individualism
• 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
• 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
• Reasoned judgment
• Decision that requires time and effort and results from careful information gathering, generation of alternatives, and evaluation of alternatives
• Administrative model
• 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
• Entrepreneurs
• An individual who notices opportunities and decides how to mobilize the resources necessary to produce new and improved goods and services
Classical model
Does not take into account risk and uncertainty
Ranks the options and picks the top ranked option
Steps in the control process
Step 1 Establish the standards of performance, goals, or targets against which performance is to be evaluated
Step 2 Measure actual performance
Step 3 Compare actual performance against chosen standards of performance
Step 4 Evaluate the result and initiate corrective action if the standard is not being achieved
