PRELIM FLASHCARDS
What is an organization?
A group of people working together in a structured and coordinated fashion to achieve a set of goals
What is management?
A set of activities (including planning and decision making, organizing, leading, and controlling) directed at an organization’s resources (human, financial, physical, and information), with the aim of achieving organizational goals in an efficient and effective manner.
What is a manager?
Someone whose primary responsibility is to carry out the management process.
efficient vs. effective
Efficient is using resources wisely in a cost-effective way. While, effective is making the right decisions and successfully implementing them.
4 Management Process
Planning/Decision Making - setting organization’s goals and how best to achieve them
Organizing - determining how best to group activities and resources
Leading - motivating members to work in the best interests of the organization
Controlling - monitoring and correcting ongoing activities to facilitate goal attainment
Top managers responsibilities
sets objectives, scans environment, plans and makes decisions
Middle managers responsibilities
reports to top management, oversees first-line managers, develops and implements activities, allocates resources
First-line managers
reports to middle managers, supervises employees
Kinds of Managers by Area
- Marketing Managers
- Financial Managers
- Operations Managers
- Human Resources Managers
- Administrative Managers
- Specialist Managers
Technical skills
The skills necessary to accomplish or understand the specific kind of work done in an organization.
Interpersonal skills
The ability to communicate with, understand, and motivate both individuals and groups.
Conceptual skills
The manager’s ability to think in the abstract.
Diagnostic skills
The manager’s ability to visualize the most appropriate response to a situation.
Communication skills
The manager’s abilities both to effectively convey ideas and information to others and to effectively receive ideas and information from others.
Decision-making skills
The manager’s ability to correctly recognize and define problems and opportunities and to then select an appropriate course of action to solve problems and capitalize on opportunities
Time management skills
The manager’s ability to prioritize work, to work efficiently, and to delegate appropriately.
The Science of Management
- Managers can gather data, facts, and objective information.
- They can use quantitative models and decision-making techniques to arrive at “correct” decisions.
- Technical and decision-making skills
The Art of Management
- Managers frequently make decisions and solve problems on the basis of intuition, experience, instinct, and personal insights.
- A manager may have to decide among multiple courses of action that look equally attractive.
- conceptual, communication, interpersonal, and time management skills
Early Management Pioneers
Robert Owen – Recognized the importance of human resources and the welfare of workers.
Charles Babbage – Focused on creating production efficiencies through division of labor and application of mathematics
2 Classical Management Perspectives and their definition
➝ Scientific Management – Concerned with improving the performance of individual workers.
➝ Administrative Management – focuses on managing the total organization.
Earliest advocates of scientific management and their contributions
Frederick W. Taylor - pioneer ; solved soldiering by a piecework pay system
Frank and Lillian Gilbreth - contemporaries of Taylor that crafted bricklaying (reduction of physical movement)
Primary contributors to administrative management and their contributions
Henri Fayol - first to identify
the specific managerial functions of planning, organizing, leading, and controlling
Lyndall Urwick - integrated scientific management with the work of Fayol ; developed a list of
guidelines for improving managerial effectiveness.
Max Weber - bureaucracy laid the foundation for contemporary organization theory
It emphasizes on individual attitudes and behaviors and group processes.
The Behavioral Management Perspective
Contributors to behavior management perspective
Hugo Munsterberg - father of industrial psychology ; suggested that psychologists could make valuable contributions to managers in the areas
of employee selection and motivation.
Mary Parker Follett - worked during the scientific
management era but quickly came to recognize the human element in the workplace.
The Hawthorne Studies
1st study: manipulating illumination for one group of workers
and comparing their subsequent productivity with the productivity of another group
2nd study: piecework incentive pay plan for a group of nine
men assembling terminal banks for telephone exchanges.
It argued that workers respond primarily to the social context of the workplace.
The Human Relations Movement
Two writers who help advance the human relations movement
Abraham Maslow - Hierarchy of Needs
Douglas McGregor - Theory X and Theory Y
It focuses on decision making, cost effectiveness, mathematical models and the use of computers.
Quantitative management perspective
Two branches of quantitative approach
- Management Science - focuses specifically on the development of mathematical models.
2.Operations Management - concerned with helping the organization more efficiently produce its products or services.
It is an interrelated set of elements functioning as a whole.
system
open system vs. closed systems
Open systems are systems that interact with their environment, whereas
closed systems do not interact with their environment.
What is a subsystem?
systems within a
broader system
It suggests that organizational units (or subsystems) may often be more successful
working together than working alone.
Synergy
When does entropy happen?
When an organization
does not monitor feedback from its environment and make appropriate adjustments.
What is universal perspective?
It is an attempt to identify the one best way to do something.
What is contingency perspective?
It suggests that appropriate managerial behavior in a given situation depends on or is contingent on, unique elements in a given situation.
Give a Contemporary Management Issues and Challenge
(1) Globalization, (2) An increasingly diverse and globalized workforce, (3) Increased emphasis on ethics and social responsibility, (4) The use of quality as the basis for competition, (5) The shift to a predominately service-based economy, (6) Meeting the challenges of a recovering economy, (7) Creating new organizational structures, (8) The effects of new information technology on how work is done in organization
It is everything outside an organization’s boundaries that might affect it.
External Environment
What is a general environment?
The set of broad dimensions and forces in an organization’s surroundings that determines its overall context.
3 general environments and their meanings
- Economic dimension – The overall health and vitality of the economic system in which the organization operates
- Technological dimension – The methods available for converting resources into products or services
- Political–legal dimension – The government regulation of business and the relationship between business and government
What is a task environment?
Specific organizations or groups that affect the organization.
7 task environments and their meanings
- Competitor – An organization that competes with other organizations for resources.
- Customer – Whoever pays money to acquire an organization’s products or services
- Supplier – An organization that provides resources for other organizations
- Regulator – A body that has the potential to control, legislate, or otherwise influence the organization’s policies and practices
- Regulatory agency – An agency created by the government to regulate business activities
- Interest group – A group organized by its members to attempt to influence organizations
- Strategic partners (also called strategic ally) – An organization working together with one or more other organizations in a joint venture or similar arrangement
These are the conditions and forces within an organization.
Internal Environment
4 internal environment
- Owners – Whoever can claim property rights to an organization
- Board of Directors – Governing body that is elected by a corporation’s stockholders and charged with overseeing the general management of the firm
- Employees – Are also a major element of its internal environment.
- Physical Work Environment – organization’s actual physical environment and the work that people do.
What is ethics?
An individual’s personal beliefs about whether a behavior, action, or decision is right or wrong.
ethical behavior vs. unethical behavior
Ethical behaviour means conforms to generally accepted social norms. While, unethical behavior does not conform to generally accepted social norms.
What are managerial ethics?
Standards of behavior that guide individual managers in their work.
What is code of ethics?
A formal, written statement of the values and ethical standards that guide a firm’s action.
Sarbanes–Oxley Act of 2002
A law that requires CEOs and CFOs to vouch personally for the truthfulness and fairness of their firms’ financial disclosures and imposes tough new measures to deter and punish corporate and accounting fraud and corruption.
Corporate Governance
The board of directors of a public corporation is expected to ensure that the business is being properly managed and that the decisions made by its senior management are in the best interests of shareholders and other stakeholders.
Ethics and Information Technology
A final set of issues that has emerged in recent times involves information technology. Among the specific focal points in this area are individual rights to privacy and individuals’ potential abuse of information technology.
What is social responsibility?
The set of obligations that an organization has to protect and enhance the societal context in which it functions.
Arguments for Social Responsibility
- Business creates problems and therefore solve them.
- Corporations are citizens in our society.
- Business often has the resources necessary to solve problems.
- Business is a partner in our society, along with the government and the general population.
Arguments against Social Responsibility
- The purpose of business in US society is to generate profit for owners.
- Involvement in social programs gives business too much power.
- There is potential for conflicts of interest.
- Business lacks the expertise to manage social programs.
Formal Organizational Dimensions
- Legal compliance – The extent to which an organization complies with local, state, federal, and international laws
- Ethical compliance – The extent to which an organization and its members follow basic ethical standards of behaviour
- Philanthropic giving – Awarding funds or gifts to charities or other worthy causes
Informal Organizational Dimensions
- Whistle-blowing – The disclosure, by an employee, of illegal or unethical conduct on the part of others within the organization.
exporting vs. importing
Exporting – Making a product in the firm’s domestic marketplace and selling it in another country
Importing – Bringing a good, service, or capital into the home country from abroad
What is licensing?
An arrangement whereby one company allows another company to use its brand name, trademark, technology, patent, copyright, or other assets in exchange for a royalty based on sales.
Advantages and Disadvantages: importing or exporting
Advantages: small cash outlay, little risk, no adaptation necessary
Disadvantages: tariffs and taxes, high transportation costs, government restrictions
Advantages and Disadvantages: licensing
Advantages: increased profitability, extended profitability
DIsadvantages: inflexibility, competition
Advantages and Disadvantages: strategic alliances or joint ventures
Advantages: quick market entry, access to materials and technology
Disadvantages: shared ownership (limits control and profits)
Advantages and Disadvantages: direct investment
Advantages: enhanced control, existing infrastructure
Disadvantages: complexity, greater economic and political risk, greater uncertainty
3 Levels of International Business Activity
Strategic alliance – A cooperative arrangement between two or more firms for mutual gain
Joint venture – A special type of strategic alliance in which the partners share in the ownership of an operation on an equity basis
Direct investment – When a firm builds or purchases operating facilities or subsidiaries in a different country from the one where it has its headquarters
One significant contextual challenge for the international manager is the _________ ______________ and how it affects business.
cultural environment
Controls on International Trade
- Tariff – A tax collected on goods shipped across national boundaries
- Quota – A limit on the number or value of goods that can be traded
- Export restraint agreements – Accords reached by governments in which countries voluntarily limit the volume or value of goods they export to or import from one another
A set of countries that agree to markedly reduce or eliminate trade barriers among member nations (a formalized market system)
Economic Community
The first and most important international market system
European Union (EU)
An agreement among the United States, Canada, and Mexico to promote trade with one another
North American Free Trade Agreement (NAFTA)
A trade agreement intended to promote international trade by reducing trade barriers and making it easier for all nations to compete in international markets
General Agreement on Tariffs and Trade (GATT)
An organization, which currently includes 140 member nations and 32 observer countries, that requires members to open their markets to international trade and to follow WTO rules.
World Trade Organization (WTO)
The set of values, beliefs, behaviors, customs, and attitudes that helps the organization’s members understand what it stands for, how it does things, and what it considers important.
Organizational Culture
2 Importance of Organization Culture
Culture determines the overall “feel” of the organization, although it may vary across different segments of the organization.
Culture is a powerful force that can shape the organization’s overall effectiveness and long-term success.
Determinants of Organization Culture
Organization’s founder (personal values and beliefs).
Symbols, stories, heroes, slogans, and ceremonies that embody and personify the spirit of the organization.
Corporate success that strengthens the culture.
Shared experiences that bond organizational members together.
Managing Organization Culture
Understand the current culture to understand whether to maintain or change it.
Articulate the culture through slogans, ceremonies, and shared experiences.
Reward and promote people whose behaviors are consistent with desired cultural values
Changing Organization Culture
Develop a clear idea of what kind of culture you want to create.
Bring in outsiders to important managerial positions.
Adopt new slogans, stories, ceremonies, and purposely
break with tradition.
Decision making vs. Decision-making process
Decision making is the act of choosing one alternative from among a set of alternatives. While, decision-making process is recognizing and defining the nature of a decision situation, identifying alternatives, choosing the best alternative, and putting it into practice.
Types of Decision Making
Programmed decision – A decision that is relatively structured or recurs with some frequency (or both)
Non-programmed decision – A decision that is relatively unstructured and occurs much less often than a programmed-decision
state of certainty
A condition in which the decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative.
state of risk
A condition in which the availability of each alternative and its potential payoffs and costs are all associated with probability estimates
state of uncertainty
A condition in which the decision maker does not know all the alternatives, the risks associated with each, or the likely consequences of each alternative.
The Classical Model of Decision Making
It assumes that managers are logical and rational and that their decisions will be in the organization’s best interest.
Classical model views the decision-making process:
- Decision makers have complete information about the decision situation and possible alternatives.
- They can effectively eliminate uncertainty to achieve a decision condition of certainty.
- They evaluate all aspects of the decision situation logically and rationally.
A commitment to finding and using the best theory and data available at the time to make decision.
Evidence Based Management
Administrative model - A decision-making model that argues that decision makers:
(1) use incomplete and imperfect information, (2) are constrained by bounded rationality, and (3) tend to “satisfice” when making decisions
A concept suggesting that decision makers are limited by their values and unconscious reflexes, skills, and habits
Bounded rationality
The tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency
Satisficing
An informal alliance of individuals or groups formed to achieve a common goal
Coalition
intuition vs. escalation of commitment
Intuition is an innate belief about something, without conscious consideration. While, escalation of commitment is when a decision maker stays with a decision even when it appears to be wrong.
Individual ethics combine with the organization’s ethics to create ______________ ________.
managerial ethics
Components of managerial ethics:
- Relationships of the firm to employees
- Employees to the firm
- The firm to other economic agents
Forms of Groups and Team Decision Making
Interacting group or team - members openly discuss, argue about, and agree on the best alternative
Delphi group - A form of group decision making in which a group arrives at a consensus of expert opinion
Nominal group - A structured technique used to generate creative and innovative alternatives or ideas
Groupthink - group or team’s desire for consensus and cohesiveness overwhelms its desire to reach the best possible decision.
Advantages of Group and Team Decision Making
More information and knowledge are available.
More alternatives are likely to be generated.
More acceptance of the final decision is likely.
Enhanced communication of the decision may result.
Better decisions generally emerge.
Disadvantages of Group and Team Decision Making
The process takes longer than individual decision making, so it is costlier.
Compromise decisions resulting from indecisiveness may emerge.
One person may dominate the group.
Groupthink may occur.
