Theories Flashcards
Ansoff Matrix
used to categorise different strategies that are implemented by a business. For a business to grow and achieve long-term business success. To evaluate a growth strategy
Variables that growth has to consider
The product(s) intended for sale, The market in which the business operates
Two options for growth in terms of market
To remain in the existing market, to enter new markets
Two options for growth in terms of product
Sell existing products, develop new products
Market Penetration (top left)
The business attempts to sell a greater quantity of an existing product to consumers in an existing market.
Product development (top right)
Involves selling new products to existing customers.
Market development (bottom left)
Requires the business to sell an existing product to new consumers
Diversification strategy (bottom right)
This is the process of selling new products to new consumers
What can Ansoff’s matrix be used for?
Effectively asses the appropriateness of a particular strategy: the risk that will be taken, by referring to current state, whether it is a good idea
4 types of corporate culture (gods of management - Charles Handy)
Power culture, role culture, task culture, person culture
Business culture depends on….
Company history, ownership, organisation structure, technology, environment
The power culture - cooperate culture
Commonly found in small entrepreneurial organisations, the power culture is described as a web. Centralisation of power is the key feature of this culture, there is a central power source, and rays of influence are spread out from the centre
Advantages Power culture - cooperate culture
Decisions can be made quickly as there is little communication
Disadvantages Power culture - cooperate culture
Results in a D motivated workforce due to lack of consultation and size can be a problem – the web can break if it has to support too many activities
The person culture - corporate culture
Individuals are central, the organisation exists only to serve the interests of those within it. Can be found in communities such as Kibbutzim - Israel’s cooperative communities. Other examples included barristers and architects partnerships, where there is a cluster of individuals all operating at the same level
Advantage The person culture - corporate culture
Many people opt for this culture since hierarchies are impossible except by mutual consent
The role culture - corporate culture
Based on rules to abide by, and a hierarchy, role culture is based on an employee’s position in an organisation - so a manager has more power than an employee. Role culture organisations are organised by business functions such as HR, marketing etc. so each staff remember works to a specific role. For example, government departments in the public sector
Advantages - The role culture - corporate culture
Best suited for organisations which are stable and not subject to constant change
Disadvantages - The role culture - corporate culture
There is little scope for individual initiative and individual development, and people avoid taking risks
Task or team culture - corporate culture
With emphasis placed on completing a specific task, task cultures are job or project orientated. Instead of individuals determining the way in which the work is organised or even the rules that govern how work should be organised in a task culture the task determines the way in which work is organised. Examples of task culture are found at management consultancy firms like PWC. It is best suited when projects require specific skill sets and problem solving
Advantages Task or team culture - corporate culture
Provide rewarding environments to work in, employees have considerable freedom
Disadvantages Task or team culture - corporate culture
There is a lack of formal authority, making management and control very difficult
Influencing corporate culture
A long term process which is dependant on factors such as the size of the business, the way it is managed, the process mergers etc. what often changes is not culture, but is the way individuals think, value, and do
Motivation theories
Taylor, Maslow, Herzberg, Adams, Pink
Taylor - scientific management
Reduce inefficiency of workers and managers through objective laws, encouraged specialisation and repetitive work, clear division of work between managers and workers, reducing inefficiencies allowed for higher wages
John Stacey Adams - equity theory
if the comparison is equal, the employee feels treated fairly, if their inputs feel greater than the outputs, they may respond by reducing effort, becoming disgruntled, absenteeism, and in extreme cases, resignation
Equity
A radio (balance) between an individual’s job inputs and outputs in comparison with those of other people
Input examples:
Effort, loyalty, skill, ability, commitment, enthusiasm, hard work, adaptability, determination
Output examples:
Salary, promotion, status, recognition, praise, reputation
Frederick Herzberg - two factor theory
Motivators and hygiene factors
Herzberg two factor theory - motivators
Sense of achievement, nature of job, recognition of achievement, responsibility, chance of promotion, possibility of improvement
Herzberg two factor theory - hygiene
Pay, inability to develop oneself, conditions of work, treatment at work, relationship with management, company policy, feelings of inadequacy
Maslow - hierarchy of needs
Psychological needs of employees- The 5 levels in a hierarchy of human needs that employees need to have fulfilled at work: self-actualisation, esteem, social, safety, and psychological
Needs in Maslow’s hierarchy
Self-actualisation (intellectual needs, fulfilling potential, achieving targets), esteem (self-respect, level of status), social (felling wanted, sense of belonging, part of team), safety (safe working environment, job security), psychological (basic needs - eg: food, shelter)
Daniel Pink’s three intrinsic elements to motivation at work
Autonomy, Mastery Purpose
Autonomy - Pink’s three intrinsic elements to motivation at work
The desire to direct our own lives 4 main aspects include time, technique, team and task. Eg: some people allow workers to peruse individual projects. If managers want employee engagements they should encourage self direction and autonomy of employees
Mastery - Pink’s three intrinsic elements to motivation at work
The desire to improve at something that matters, and enjoy satisfaction from progress. Lack of opportunity for self-improvement makes employees more demotivated. Managers should set tasks not too easy or too challenging, but allow them to stretch and develop skills and experience
Purpose - Pink’s three intrinsic elements to motivation at work
The desire to do things in service of something larger than ourselves, people intrinsically want to do things that matter. EG: entrepreneurs are motivated to make a difference rather than just a profit. People want their time at work to matter. To do this, company mission and goals should be well communicated, employees need to understand these and appreciate how their work fits into what the organisation is about
What is the PLC?
The progression of a product’s sales over its lifetime
Four stages of the PLC
Introduction, growth, maturity, decline
Best method to analyse a product portfolio and determine balance?
Boston consulting group matrix (BCG matrix)
Two variables of the BCG matrix
Relative market share (x axis) Market growth rate (y axis)
How does the BCG matrix fit within the PLC
The four categories in the matrix equate to the four stages of the product lifecycle
Question Mark
Recently introduced product which has not yeast established itself, hence why it is hard to predict it’s future (low share, high growth)
Dogs
(Low share, low growth) most people remove dogs from their product portfolio as the drain resources, but in same cases they can still make some revenue. EG: If a newer car model is out, some people will still need new parts for their older car even if the model is hardly selling
Cash Cows
(high market share, low growth rate) Basically the maturity stage of the PLC, well established products, dominant positions in the market that deliver a significant amount of income, and is not costing the business much to maintain
Star
(High share, high growth) They have rapid growth and dominant market share, they can be seen as market leading products, and they require a lot of investment to keep their position and to lead over competitions. It is hard to tell whether the market will continue to grow or go down
BCG aim
To allow an organisation to plot their products on the Matrix to see whether they have a healthy product portfolio. An unbalanced portfolio would have too many dogs/question marks, and not enough stars/cash cows
Four strategies that a business must decide whether to go froward with
Build, hold, Harvest, Divest
Build (strategy)
Question marks or products in the introduction stage that need to be built in order to have them grow into stars, This requires a high level of funding
Hold (strategy)
A firm will be keen to maintain the market position of a star product, therefore promotional costs will be high so as to differentiate itself
Harvest (strategy)
A firm plans to cash in on its ‘crop’ (mature product), to ‘milk its business’ hence why this is called a cash cow
Divest (strategy)
Made appropriate for dogs or products in the decline stage, as its market is not growing
AIDA model
Attention, Interest, Desire, Action
Schein’s theory attributes/artefacts
How the business culture is presented and illustrated to the audience - like the dust cover of a book
Schein’s theory professor or espoused
Slogans, statements, and projects of the business - text inside a book
Schein’s theory organisational assumptions
How things really work in the business could be the hidden message or purpose (purpose behind the book)
3 levels of business culture
Artifacts, basic assumptions, espoused values
