TEMO Flashcards
decision making
The process by which managers respond to opportunities and threats by analyzing options and making determinations about specific organizational goals and courses of action.
programmed decision
making
Routine, virtually
automatic decision making
that follows established rules
or guidelines.
nonprogrammed decision
making
Nonroutine decision making that occurs in response to unusual, unpredictable opportunities and threats.
intuition
Feelings, beliefs, and hunches that come readily to mind, require little effort and information gathering, and result in on-the-spot decisions.
reasoned judgment
A decision that requires time and effort and results from careful information gathering, generation of alternatives, and evaluation of alternatives.
classical decision-making
model
A prescriptive approach to decision making based on the assumption that the decision maker can identify and evaluate all possible alternatives and their consequences and rationally choose the most appropriate course of action.
optimum decision
The most appropriate decision in light of what managers believe to be the most desirable consequences for the organization.
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.
bounded rationality
Cognitive limitations that
constrain one’s ability to
interpret, process, and act on
information.
risk
The degree of probability
that the possible outcomes
of a particular course of
action will occur.
uncertainty
Unpredictability.
ambiguous information
Information that can be interpreted
in multiple and often
conflicting ways.
satisficing
Searching for and choosing an acceptable, or satisfactory, response to problems and opportunities, rather than trying to make the best decision.
heuristics
Rules of thumb
that simplify decision making
systematic errors
Errors
that people make over and
over and that result in poor
decision making.
prior hypothesis bias
A cognitive bias resulting from the tendency to base decisions on strong prior beliefs even if evidence shows that those beliefs are wrong.
representativeness bias
A cognitive bias resulting from the tendency to generalize inappropriately from a small sample or from a single vivid event or episode.
illusion of control
source of cognitive bias resulting from the tendency to overestimate one’s own ability to control activities and events.
escalating commitment
A source of cognitive bias resulting from the tendency to commit additional resources to a project even if evidence shows that the project is failing.
groupthink
A 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.
devil’s advocacy
Critical analysis of a preferred alternative, made in response to challenges raised by a group member who, playing the role of devil’s advocate, defends unpopular or opposing alternatives for the sake of argument.
dialectical inquiry
Critical analysis of two preferred alternatives in order to find an even better alternative for the organization to adopt.
organizational learning
The process through which managers seek to improve employees’ desire and ability to understand and manage the organization and its task environment.
learning organization
An organization in which managers try to maximize the ability of individuals and groups to think and behave creatively and thus maximize the potential for organizational learning to take place.
creativity
A decision maker’s ability to discover original and novel ideas that lead to feasible alternative courses of action.
production blocking
A loss of productivity in brainstorming sessions due to the unstructured nature of brainstorming.
nominal group technique
A decision-making technique in which group members write down ideas and solutions, read their suggestions to the whole group, and discuss and then rank the alternatives.
delphi technique
A decision-making technique in which group members do not meet face-to-face but respond in writing to questions posed by the group leader.
entrepreneur
An individual who notices opportunities and decides how to mobilize the resources necessary to produce new and improved goods and services.
social entrepreneur
An individual who pursues initiatives and opportunities and mobilizes resources to address social problems and needs in order to improve society and well-being through creative solutions.
intrapreneur
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.
entrepreneurship
The mobilization of resources to take advantage of an opportunity to provide customers with new or improved goods and services.
product champion
A manager who takes “ownership” of a project and provides the leadership and vision that take a product from the idea stage to the final customer.
skunkworks
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.
control systems
Formal target-setting, monitoring, evaluation, and feedback systems that provide managers with information about how well the organization’s strategy and structure are working.
feedforward control
Control that allows managers
to anticipate problems before
they arise.
concurrent control
Control that gives managers immediate feedback on how efficiently inputs are being transformed into outputs so managers can correct problems as they arise.
feedback control
Control that gives managers information about customers’ reactions to goods and services so corrective action can be taken if necessary.
operating budget
A budget that states how managers intend to use organizational resources to achieve organizational goals.
management by objectives
MBO
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.
bureaucratic control
Control of behavior by means
of a comprehensive system of
rules and standard operating
procedures.
clan control
The control exerted on individuals and groups in an organization by shared values, norms, standards of behavior, and expectations.
organizational change
The movement of an organization away from its present state and toward some preferred future state to increase its efficiency and effectiveness.
evolutionary change
Change that is gradual, incremental,
and narrowly focused.
revolutionary change
Change that is rapid, dramatic,
and broadly focused.
top-down change
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.
bottom-up change
A gradual or evolutionary approach to change in which managers at all levels work together to develop a detailed plan for change.
benchmarking
The process of comparing one company’s performance on specific dimensions with the performance of other highperforming organizations.
global organization
An
organization that operates
and competes in more than
one country.
global environment
The set of global forces and conditions that operates beyond an organization’s boundaries but affects a manager’s ability to acquire and utilize resources.
task environment
The set of forces and conditions that originates with suppliers, distributors, customers, and competitors and affects an organization’s ability to obtain inputs and dispose of its outputs. These forces and conditions influence managers daily.
general environment
The wide-ranging global, economic, technological, sociocultural, demographic, political, and legal forces that affect an organization and its task environment.
suppliers
Individuals and organizations that provide an organization with the input resources it needs to produce goods and services.
global outsourcing
The purchase or production of inputs or final products from overseas suppliers to lower costs and improve product quality or design.
distributors
Organizations
that help other organizations
sell their goods or services to
customers.
customers
Individuals and
groups that buy the goods
and services an organization
produces.
competitors
Organizations that produce goods and services that are similar to a particular organization’s goods and services.
potential competitors
Organizations that presently
are not in a task environment
but could enter if they so
choose.
barriers to entry
Factors that make it difficult and costly for an organization to enter a particular task environment or industry.
economies of scale
Cost
advantages associated with
large operations.
brand loyalty
Customers’
preference for the products of
organizations currently existing
in the task environment.
economic forces
Interest rates, inflation, unemployment, economic growth, and other factors that affect the general health and well-being of a nation or the regional economy of an organization.
technology
The combination of skills and equipment that managers use in designing, producing, and distributing goods and services.
technological forces
Outcomes of changes in the
technology managers use to
design, produce, or distribute
goods and services.
sociocultural forces
Pressures emanating from the social structure of a country or society or from the national culture.
social structure
The traditional
system of relationships
established between people
and groups in a society.
national culture
The set of values that a society considers important and the norms of behavior that are approved or sanctioned in that society.
demographic forces
Outcomes of changes 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
Outcomes of changes in laws and regulations, such as deregulation of industries, privatization of organizations, and increased emphasis on environmental protection.
globalization
The set of specific and general forces that work together to integrate and connect economic, political, and social systems across countries, cultures, or geographical regions so that nations become increasingly interdependent and similar.
tariff
A tax that a government
imposes on imported or,
occasionally, exported goods.
free-trade doctrine
The idea that if each country specializes in the production of the goods and services that it can produce most efficiently, this will make the best use of global resources.
values
Ideas about what a
society believes to be good,
right, desirable, or beautiful.
norms
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.
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 than by 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.
power distance
The degree to which societies accept the idea that inequalities in the power and wellbeing of their citizens are due to differences in individuals’ physical and intellectual capabilities and heritage.
achievement orientation
A worldview that values
assertiveness, performance,
success, and competition.
nurturing orientation
A worldview that values the quality of life, warm personal friendships, and services and care for the weak.
uncertainty avoidance
The degree to which societies
are willing to tolerate uncertainty
and risk.
long-term orientation
A
worldview that values thrift
and persistence in achieving
goals.
short-term orientation
A
worldview that values personal
stability or happiness
and living for the present.
planning
Identifying and selecting appropriate goals and courses of action; one of the four principal tasks of management.
strategy
A cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals.
mission statement
A broad declaration of an organization’s purpose that identifies the organization’s products and customers and distinguishes the organization from its competitors.
corporate-level plan
Top management’s decisions pertaining to the organization’s mission, overall strategy, and structure.
corporate-level strategy
A plan that indicates in which
industries and national markets
an organization intends
to compete.
business-level plan
Divisional managers’ decisions pertaining to divisions’ longterm goals, overall strategy, and structure.
business-level strategy
A plan that indicates how a division intends to compete against its rivals in an industry.
functional-level plan
Functional managers’ decisions pertaining to the goals that they propose to pursue to help the division attain its business-level goals.
functional-level strategy
A plan of action to improve the ability of each of an organization’s functions to perform its task-specific activities in ways that add value to an organization’s goods and services.
time horizon
The intended
duration of a plan.
strategic leadership
The ability of the CEO and top managers to convey a compelling vision of what they want the organization to achieve to their subordinates.
strategy formulation
The development of a set of corporate, business, and functional strategies that allow an organization to accomplish its mission and achieve its goals.
SWOT analysis
A planning exercise in which managers identify organizational strengths (S) and weaknesses (W) and environmental opportunities (O) and threats (T).
hypercompetition
Permanent, ongoing, intense competition brought about in an industry by advancing technology or changing customer tastes.
low-cost strategy
Driving
the organization’s costs down
below the costs of its rivals.
differentiation strategy
Distinguishing an organization’s products from the products of competitors on dimensions such as product design, quality, or after-sales service.
focused low-cost strategy
Serving only one segment of
the overall market and trying
to be the lowest-cost organization
serving that segment.
focused differentiation strategy
Serving only one segment of the overall market and trying to be the most differentiated organization serving that segment.
concentration on a single
industry
Reinvesting a company’s
profits to strengthen
its competitive position in its
current industry.
