Models/Theories Flashcards
Tannenbaum Schmidt Continuum
(Highlights different management styles that may be adopted)
Boss-Centered Leadership<
Boss makes decisions and TELLS after
Boss makes decisions and tries to SELL the benefits
Boss allows others to SUGGEST ideas
Boss CONSULTS his choice with others
Boss DELEGATES decision-making after setting the framework
Boss ABDICATES responsibility- only constraints are external
Subordinated-Centered Leadership>
Scientific Decision Making
1) Set objectives
2) Gather data
3) Analyse data
4) Select strategy
5) Implement strategy
6) Review decision
Consider:
Importance of objectives
Value of data + how reliable it is
Risks, rewards, opportunity costs
If the data aligns with objectives
External factors
Decision Trees
Square represents decision
Lines from the square represent possible choices
Circles represent outcomes of those choices
Lines from the circle represent expected outcomes
EV= For each given outcome: Probability x its value
Net Gain= EV- Initial cost of given choice
These are used to analyse choices, their risks and rewards etc
Stakeholder Mapping
Low SP+SI:
Monitor (min effort)
Eg peripheral suppliers (office pens) can be updated via newsletters
Low SP + High SI:
Keep informed
Eg frontline employees can be updated via briefing sessions
High SP + Low SI:
Eg board members, gov officials can be told about strategic outcomes
High SP+SI
Eg senior execs, major investors can be frequently updated and consulted with
Consider:
Factors that affect stakeholders’ power
How stakeholders can increase their power (eg trade unions)
STP
Analyse a market to find its SEGMENTS
Select the segments the business should TARGET
Decide where the products should be POSITIONED
Consider:
Each segment’s S+W
Business’ S+W
(Linked with Market Mapping)
Market Mapping
Identifies how products/ brands are perceived by customers relative to others in the market
X-axis represents price, Y-axis represents quality or innovation
(Linked with STP)
Consider:
Different criteria customers use to assess products
Factors that influence positioning a business chooses
Implication for other functional areas of choosing a position
Why a business may want to move position
Marketing Mix
Product- Appearance, Quality, Features
Price- Strategies
Place- Distribution (eg e-commerce)
Promotion- PR, marketing
People- everyone involved
Process- efficient systems
Physical Evidence- Layout
Boston Matrix
Used to assess a product’s position based on market share and market growth
Dogs
Either revive or discontinue
Cash Cows
Low investment and stable production
Question Marks
May need high investment so they become a cash cow or star
Star
May need some investment to maintain growth
Consider:
Type of product
Business-more suitable for multi-product businesses
Implications of different portfolios
Product Life Cycle
DEVELOPMENT:
Before launch ,R+D, trials etc with no revenue yet
INTRODUCTION:
Low sales and heavy marketing as customers have limited awareness of the product
GROWTH:
Rapid increase in sales, awareness etc with increased production May lead to refinements and competition
MATURITY:
Growth slows as most customers are aware and/or own it already. Profit maximisation or differentiation’s focused on as sales have plateaued out
DECLINE:
Sales fall as customer demand shifts (trends may change, new innovations may enter eg). Businesses have to decide whether to try and rebrand, maximise profits or discontinue
Consider:
Nature of different products, external factors, product marketing and innovation, strategic planning and flexibility
Inventory Control (Chart)
RE-ORDER LEVEL:
After stock falls below a certain amount, a new order’s issued
BUFFER STOCK:
Spare stock held in case of unexpected events (eg demand spikes, supplier issues)
LEAD TIME:
Delay between reorder level and new inventory coming in
Consider:
Nature of product- if its perishable then the reorder time and buffer stock should reflect that, Possibility of demand spikes (eg holiday seasons), Effects and plans for inventory issues
Herzberg’s Theory of Motivation
2 distinct ways aspects of work affect employees: Hygiene Factors- those that only prevents demotivation if are satisfactory (eg wages, working conditions, job security)
Motivating Factors- those that are directly linked to job satisfaction (eg achievement, responsibility, growth)
Maslow’s Hierarchy of Needs
Employees’ bottom tier needs should be met before the higher needs are considered:
PHYSIOLOGICAL NEEDS:
Fundamental human essentials (eg food, water and a competitive wage)
SAFETY NEEDS:
Professional safety and security (eg long-term contract, clear progression)
SOCIAL NEEDS:
Cooperation, teamwork and a positive work environment
ESTEEM NEEDS:
Gaining respect, recognition with achievement, responsibility (eg rewards)
SELF-ACTUALISATION:
Individuals are motivated to achieve their potential and grow as people (eg job enrichment, personal development)
Taylor’s Theory of Motivation
Concluded that employees were mostly motivated by money
Carefully broke down (specialised) and timed each task in order to achieve max potential efficiency
Employees should be chosen based on their capability to perform a task efficiently
Believed in “piece-rate pay”- employees are paid proportionate to their productivity
Elkington’s Triple Bottom Line
Business performance can be measured in how it affects PLANET, PEOPLE and PROFIT. A business has to take in all 3 measures in order to understand their activities’ full costs.
This can be used when discussing objectives and the factors behind setting these.
Caroll’s CSR pyramid
Outlines a business’ different possible responsibilities
Foundation<
ECONOMIC: Be profitable
LEGAL: Obey the law
ETHICAL: Avoid harm and ‘be’ moral (eg fair treatment of employees, minimise environmental harm)
PHILANTHROPIC: Be a good corporate citizen (eg sponsoring charities, community events etc)
Peak>
Porter’s 5 Forces
These forces determine a business’ profitability in an industry
DEGREE of RIVALRY:
High competition lowers prices and therefore profits. This results in competition through differentiation
BUYER POWER:
If there are a small number of buyers (eg supermarkets buying from farmers), they can negotiate better deals. This works better if the product’s more homogenous
SUPPLIER POWER:
Same as buyer power but for suppliers (eg few companies produce certain microchips, increasing their leverage). This is proportional to the uniqueness of input and the cost of switching suppliers
THREAT OF SUBSTITUTES:
The availability of alternatives that satisfy the customer’s needs as well (eg choosing water over juice in the beverage industry)
THREAT OF NEW ENTRANTS:
Depends on the barriers to entry and the structure of the industry (eg it’s hard to enter airline+ pharmaceutical industry)
Investment appraisal
Used to assess investment opportunities
3 methods are
PAYBACK: Measures how long it takes to repay the investment. If managers are worried about liquidity, they’ll want a short payback
ARR: Measures avg annual profit as % of initial investment, considers project’s total returns
NPV: Takes account of ‘time value of money’ (ie £1 meant much more 10 years ago than now)
Consider:
Initial cost
Expected yearly returns
No. of years of returns
Timings of returns
Risk involved
Ansoff’s Matrix
Used to map out business’ growth strategies based on products and markets
MARKET PENETRATION:
More of same product in same market.
Low risk. Could be done with promotion or improved distribution channels (eg Coca Cola seasonally promoting their drinks)
MARKET DEVELOPMENT:
Same product in different markets (eg new areas, demographics etc). Moderate risk. Eg Starbucks in Australia
PRODUCT DEVELOPMENT:
New product to existing market. Moderate-High Risk. (eg Apple releasing iPhone with new features)
DIVERSIFICATION:
New product in new product. High Risk (eg Virgin going into airlines, space, mobile etc)
Porter’s Generic Strategies
A framework for companies to establish a sustainable, competitive advantage. The 2 axes are competitive scope-either broad or niche targeting- and competitive advantage:
COST LEADERSHIP:
EoS, efficiency and low avg costs (eg Walmart leverage high purchasing power to keep prices low)
DIFFERENTIATION:
Differing in quality, innovation, design, features, brand image, customer service etc (eg Apple do this to command premium prices and a loyal customer base)
FOCUS (either cost or differentiation):
When a business fixates upon a specific market segment with unique needs, customising their offerings towards that segment to dominate a narrow market (eg RR uses differentiation focus to target the niche that seeks luxury quality vehicles instead of competing with mass-auto manufacturers)
Lewin’s Force Field
Helps understand the forces for (driving) and against (resisting) a change in a business
1) Identify proposed change (eg introduce new systems)
2) List driving forces through brainstorms, surveys etc (eg more competition, potential efficiency, changing needs)
3) List resisting forces with same methods (eg staff resistance, uncertainty)
4) Assess forces’ strengths
5) Develop strategies to weaken resistors and/or strengthen drivers (eg offering training to calm staff)
6) Implement and monitor, potentially adjust if necessary
Kotter and Schlesinger’s Reasons to Resist Change
SELF INTEREST:
They could be worse off (eg job loss)
FEAR+MISUNDERSTANDING:
They may not be sure of the motives and/or effects of the change
DIFFERENT ASSESSMENTS:
They disagree with the proposal; may be because they think it’s unnecessary, misguided or they have a better idea
PREFER STATUS QUO:
People naturally prefer stability and may just oppose change because it’s outside their comfort zone.
Kotter and Schlesinger’s Methods of Overcoming Resistance to Change
EDUCATION+ COMMUNICATION:
Addresses misunderstanding (eg presentations, Q+As)
PARTICIPATION+ INVOLVEMENT:
Involve employees in the planning and/or implementation so they feel more valued (eg focus groups, joint committees)
FACILITATION+ SUPPORT:
Reduces technical, emotional and/or logistical barriers (eg extra training, counselling)
NEGOTIATION+ AGREEMENT:
Managers bargain/offer incentives and compromise (eg identify concerns and try and mitigate their losses by adjustment, bonuses, better conditions etc)
MANIPULATION+ CO-OPTION:
Managers may select respected staff and subtly enlist them to ‘champion’ for the change
IMPLICIT+ EXPLICIT COERCION:
Managers use authority to try and force change (eg imposing consequences for non-compliance or communicating change’s inevitability)
Handy’s Culture
POWER:
A small set of people control most of the power, with quick decision-making and less formal procedure+ structure (eg family-run business)
ROLE:
Highly structured and bureaucratic, with clear roles and order (eg gov agencies)
TASK:
Driven by teamwork and innovation; orientated around specific projects. Power resides in specific expertise instead of formal titles (eg consulting firms)
PERSON:
Culture’s based around the individuals and their needs, values etc. Involves minimal hierarchy and autonomy (eg law firms)
