management exam t1

8/3/2019 Management Exam T1

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Management exam T1:

Chapter 1, page 7 - 13

Management is the attainment of organizational goals in an effective andefficient manner through planning, organizing, leading and controllingorganizational resources.

Functions of management:Planning: is the management function concerned with defining goals for futureorganizational performance and deciding on the tasks and resources needed oattain them.

Organizing: is the management function concerned with assigning tasks,grouping tasks into departments and allocating resources to departments.

Leading: is the management function that involves the use of influence to

motivate employees to achieve the organizations goals.

Controlling is the management function concerned with monitoring employeesactivities, keeping the organization on track towards its goals and makingcorrections as needed.

Organizational performance:

Organization: A social entity that is goal directed and deliberately structured.Effectiveness: the degree to which the organization achieves a stated goalEfficiency: the use of minimal resources (raw materials money and people) toproduce a desired volume of output.Performance: the organizations ability to attain its goals by using resources inan efficient and effective manner.

Resources:

HumanFinancialRawmaterials

TechnologicalInformation

Performance:

Attain goalsProductsServicesEfficiencyEffectiveness


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Management skills:

Conceptual skill: The cognitive ability to see the organization as a whole andthe relationships among its parts.

Think strategically: long-term view.

Human Skill: the ability to work with and through other people and to workeffectively as a group member.

Technical skill: The understanding of and proficiency in the performance ofspecific tasks.

Chapter 2, page 37 - 62

External Forces:

Social forces: The aspects of a culture that guide and influence relationshipsamong people (their values, needs and standard of behaviour).Political forces: the influence of political and legal institutions on people andorganizations.Economic Forces: Forces that affect the availability, production and distributionof a societys resources among competing users.

The management perspective:

1. Classical perspective:A management perspective that emerged during the nineteenth and earlytwentieth centurys that emphasized a rational, scientific approach to the studyof management and sought to make organizations efficient operating machines.


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Scientific management: A subfield of the classical management perspectivethat emphasized scientifically determined changes in management practices asthe solution to improving labor productivity.

Standard methods for performing each job.

Selected workers with appropriate abilities for each job. Trained workers in standard method.

Supported workers byplanning workand eliminating interruptions.

Provided wage incentives to workers for increased output.

Bureaucratic organizations: A subfield of the classical managementperspective that emphasized management on an impersonal, rational basis.

Through such elements as clearly defined authority and responsibility, formalrecordkeeping and separation of management and ownership.

Focus on organization and no longer on individuals

Systematic and rational approach looked at organization as a whole

The ideal bureaucracy:- Divisions of labor, with clear definitions of authority and responsibility.- Positions organized in a hierarchy of authority.- Managers subject to rules and procedures that will ensure reliable,

predictable behaviour.- Management separate from the ownership of the organization.- Administrative acts and decisions recorded in writing.- Personnel selected and promoted based on technical qualifications.

Administrative principles: A subfield of the classical management perspectivethat focuses on the total organization rather than the individual worker,

delineating the management functions of:- planning- Organizing

- commanding- coordinating

- controlling

2. Humanistic perspectiveA management perspective that emerged near the late nineteenth century andemphasized understanding human behaviour, needs, and attitudes in theworkplace.

Human relations movement: A movement in management thinking andpractice that emphasizes satisfaction of employees- basic needs as the key to

increased worker productivity.

Human resources perspective: A management perspective that suggests jobsshould be designed to meet higher-level needs by allowing workers to use theirfull potential.

McGregor:X theory:

- Dislike work will avoid it- Must be coerced, controlled, directed, or threatened with punishment- Prefer direction, avoid responsibility, little ambition, want security

Y theory- Do like work


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- Self direction and self control- Seek responsibility- Imagination, creativity widely distributed- Intellectual potential only partially utilized

Behavioural sciences approach: A subfield of the humanistic managementperspective that applies social science in an organizational context, drawing fromeconomics, psychology, sociology and other disciplines.Understand employee behaviour and interaction in an organizational setting.

3. Management science perspectiveA management perspective that emerged after World War 2 and appliedmathematics, statistics and other quantitative techniques to managerialproblems.

4. Systems theoryAn extension of the humanistic perspective that describes organizations as open

systems characterized by entropy, synergy and subsystem interdependence.

Open system: A system that interacts with the external environmentClosed system: A system that does not interact with the external environment

Entropy: The tendency for a system to run down and die.Synergy: the concept that the whole is greater than the sum of its parts.Subsystems: parts of a system that depends on one another for theirfunctioning.

5. Contingency viewAn extension of the humanistic perspective in which the successful resolution oforganizational problems is thought to depend on managers identification of keyvariations in the situation at hand.


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To help managers identify and understand situations.6. Total quality management (TQM)

A concept that focuses on managing the total organization to deliver quality tocustomers. Four significant elements of TQM are: employee involvement, focuson the customer, benchmarking, and continuous improvement.

7. The learning organizationAn organization in which everyone is engaged in identifying and solving

problems, enabling the organization to continuously experiment, improve, andincrease its capability.

8. The technology-driven workplace

E-commerce: Business exchanges or transactions that occur electronically.Types of E-commerce are:B2C: Business to consumer: selling products and services onlineB2B: Business to Business: transactions between organizationsC2C: Consumer to consumer: electronic markets created by web-basedintermediaries. (EBay)

Supply chain management: managing the sequence of suppliers andpurchasers, covering all stages of processing from obtaining raw materials todistributing finished goods to final customers.

Enterprise resource planning (ERP): systems that unite a companys majorbusiness functions, order processing, product design, purchasing, inventory andso on.

Knowledge management: The efforts to systematically find, organize, and

make available a companys intellectual capital and to foster a culture ofcontinuous learning and knowledge sharing.

LearningOrganization


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Customer relationship management (CRM): Systems that help companiestrack customers interaction with the firm and allow employees to call upinformation on past transaction.

Outsourcing: Contracting out selected functions or activities of an organizationto other organizations that can do the work more cost efficiently.


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Chapter 3, page: 69-85

General and tasks environment

Organisational EnvironmentAll elements existing outside the organisations boundaries that have thepotential to affect the organization.

General environment: the layer of the external environment that affects theorganization indirectly.Tasks environment: the layer of the external environment that directlyinfluences the organizations operations and performance.Internal environment: the environment that includes the elements within theorganizations boundaries.

General environment:

International dimension: represents events originating in foreign countries as

well as opportunities for U.S. companies in other countries. (globalization)Technological dimension: includes scientific and technological advancementsin the industry and society at large.Examples

Technological advance (innovation) ICT Network advances- ERP-MIS Medical advances (HIV, diabetes) Nanotechnology advances (Chemical/Biochemical Marketing advances (customer behavior)


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Sociocultural dimension: representing the demographic characteristics,norms, customs, and values of the population within which the organizationoperates.

- Demographic characteristicso Average age going up

o People stay healthier

- Customs, norms and valueso Emancipation

o Multiculturalism

- Level of education- Free move of employees (EU)

Economic dimension: representing the overall economic health of the countryor region in which the organization operates.

- General economic health (EU and global scale)o Consumer purchasing power (inflation)

o Unemployment rate

o National economic growth (GDP)o Interest rates/ money value

- Recent Trendso Frequency of mergers and acquisitions

o Recession and credit crisis

Legal-Political dimension: includes federal, state and local governmentregulations and political activities designed to influence company behavior.

Free trade and free flow of workers within EU (open market) Tax on pollution activities subsidies on green activities

An pressure group works within the legal-political framework to influencecompanies to behave in socially responsible ways.

Task environment :

Customers: people and organizations in the environment who acquire goods orservices from the organization.Competitors: Other organizations in the same industry or type of business thatprovide goods or services to the same set of customers.Suppliers: People and organizations who provide the raw materials which theorganization uses to produce its output.Labor market: The people available for hire by the organization.

The organization environment relationship.


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External environment and uncertainty

Boundary spanning roles: Roles assumed by people and/or departments thatlink and coordinate the organization with key elements in the externalenvironment.

Business Intelligence (BI)

Competitive intelligence (CI)Inter-organizational partnerships: An increasingly popular strategy foradapting to the environment is to reduce boundaries and increase collaborationwith other organizations.

From adversarial to partnership orientation.

Strategic partnershipsMergers and Joint venturesMerger: The combining of two or more organizations into one.Joint venture: A strategic alliance or program by two or more organizations.

Chapter 7, page: 209 219 + 226 230

Managerial planning and goal setting

Goal: A desired future state that the organization attempts to realizePlan: A blueprint specifying the resource allocations, schedules, and other

actions necessary for attaining goals.Planning: The act of determining the organizations goals and the means forachieving them.


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Levels of goals and plans:

Mission statement = External Message: Legitimacy for investors,customers, suppliers, communityRest = Internal Message: Legitimacy, motivation, guides, rationale, standards

Goals in Organizations:Mission: The organizations reason for existence.

Unique proposition to the market shared values

Mission statement: A broadly stated definition of the organizations basicbusiness scope and operations that distinguishes it from similar types oforganizations.

Slogan with mission essentials. A way to distinguish from similar typesof organizations, such as, company values, product quality, attitudesto reward employees

- To Refresh the World in body, mind, and spirit.- Coca Cola- Sense and simplicity - Philips

Purposes of goals and plans: Legitimacy

What the organization stands for - reason for being External + employees identify with overall purpose

Source of Motivation and Commitment Employees identification with the organization Motivate by reducing uncertainty

Resource allocation Allocate employees, money, and equipment

Guides to Action Provides direction; focus on targets


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Direct efforts toward important outcomes

Rationale for Decisions Learn what organization is trying to accomplish internal policies and decisions will be made in accordance with

desired outcomes Standard of Performance

Serve as performance criteria Provide a standard of assessment

goals and plans

Strategic goals: Broad statements of where the organization wants to be in thefuture. Pertain to the organization as a whole rather than to specific ordepartments.Strategic Plans: The action steps by which an organization intends to attain

strategic goals.(long term 1-3 years)

Tactical goals: goals that define the outcomes that major divisions anddepartments must achieve in order for the organization to reach its overall goals.Tactical Plans: Plans designed to help execute major strategic plans and toaccomplish a specific part of the companys strategy.(3 6 months)

Operational goals: Specific, measurable results expected from departments,work groups, and individuals within the organization.Operational plans: Plans developed at the organizations lower levels thatspecify action steps toward achieving operational goals and that support tacticalplanning activities.(daily or weekly)

Means-end Chain: Achievement of goals at lower levels permits the attainmentof high-level goals

Traditional organizational responsibility: Strategic = top management Tactical middle management Operational = 1st line management & workers

Criteria for Effective goals:Specific and measurableCover key result areasChallenging but realisticdefined time periodLinked to rewards


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Planning

High performance planning in a fast changing environment: Have a strong mission statement and vision Set stretch goals for excellence (ambitious, clear, energizing) Establish a culture that encourages learning Embrace event-driven planning Utilize temporary task forces Planning still starts and stops at the top

Central planning department: A group of planning specialists who developplans for the organization as a whole and its major divisions and departmentsand typically report directly to the president or CEO.Decentralized planning: managers work with planning experts to develop their

own goals and plans.Event-driven planning: Evolutionary planning that responds to the currentreality of what the environment and the marketplace demands.Planning task force: A group of managers and employees who develop astrategic plan.

Chapter 8, page: 237-263

Strategic management: The set of decisions and actions used to formulate andimplement strategies that will provide a competitively superior fit between theorganization and its environment so as to achieve organizational goals.

Organizations make decisions and actions such as....... respond to competitors behavior... cope with difficult environmental changes... meet changing customer needs... effectively and efficiently use of resources

requires proper strategic thinking and planning of management

Managers ask such questions as...

What changes and trends are occurring?

Who are our customers?

What products or services should we offer? Who are our competitors? What makes them successful?

Grand strategy: the general plan of major action by which an organizationintends to achieve its long-term goals.

Three general categories:1. Growth2. Stability3. Retrenchment ( Retrenchment, liquidation and Divestiture)

1. Growth can be promoted internally by investing in expansion or externallyby acquiring additional business divisions


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- Internal growth = investing in expansion, including new or changedproducts

- External growth = typically involves diversification businessesrelated to current product lines or into new areas

2. Stability, sometimes called a pause strategy, means that the organizationwants

- to remain the same size or- to grow slowly and in a controlled fashion

3. Retrenchment- Retrenchment = the organization goes through a period offorced decline

by either shrinking current business units or selling off or liquidating entirebusinesses

- Liquidation = selling off a business unit for the cash value of the assets,thus terminating its existence

- Divestiture = involves selling off parts of businesses that no longer seemcentral to the corporation

Global strategy:

Strategy: The plan of action that prescribes resource allocation and otheractivities for dealing with the environment, achieving a competitive advantage,and attaining organizational goals.Globalization: The standardization of product design and advertising strategiesthroughout the world.Multi domestic strategy: The modification of product design and advertisingstrategies to suit the specific needs of individual countries.Transnational strategy: A strategy that combines global coordination to attainefficiency with flexibility to meet specific needs in various countries.


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Purpose strategy:

Core Competencies:Competitive advantage: What sets the organization apart from others andprovides it with a distinctive edge in the marketplace.a competitive advantage, expertise, branding, process efficiency or customerservice.

Building Synergy:Core competence: A business activity that an organization does particularlywell in comparison to competitors.

1+1=3. Combination of organization properties that are congruent (aligned)on the cost side (efficiency)on the knowledge side (innovation)internal organization (alignment of processes)

Synergy: The condition that exists when the organizations part interact toproduce a joint effect that is greater than the sum of the parts acting alone.

Creating customer valueCombination of core competences and synergy.

Levels of strategy:

Corporate level strategy: the level of strategy concerned with the question:what business are we in? Pertains to the organization as a whole and thecombination of business units and product lines that make it up.

Business level strategy: the level of strategy concerned with the question:how do we compete? Pertains to each business unit or product line within theorganization.

Functional level strategy: the level of strategy concerned with the question:how do we support the business level strategy? Pertains to all of theorganizations major departments.


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The strategic Management process

Strategy formulations: The stage of strategic management that involves theplanning and decision making that lead to the establishment of the organizationsgoals and of a specific strategic plan.Strategy implementation: the stage of strategic management that involvesthe use of managerial and organizational tools to direct resources towardachieving strategic outcomes.

Situation analysis: Analysis of the strengths, weaknesses, opportunities, and

threats (SWOT) that affect the organizational performance.


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Portfolio strategy:


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Strategic business unit (SBU): Adivision of the organization that hasa unique businessMission, product line, competitors,andMarket relative to other SBUs in thesameCorporations.

Portfolio strategy: Theorganizations mix of strategicbusiness units and product lines thatfit together in such a way as toprovide the corporation with synergyand competitive advantage.

BCG matrix: a concept developedby the Boston Consulting Group thatevaluates strategic business units with respect to the dimensions of businessgrowth rate and market share.


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Formulating business level strategy:

Competitive strategies:Differentiation: A type of competitive strategy with which the organizationseeks to distinguish its products or services from that of competitors.

Cost- leadership: A type of competitive strategy with which the organizationaggressively seeks efficient facilities, cuts costs, and employs tight cost controlsto be more efficient than competitors.Focus: A type of competitive strategy that emphasizes concentration on aspecific regional market or buyer group.

Strategy Organizational characteristics

Differentiation Acts in a flexible, loosely knit way, with strong coordinationamong departmentsStrong capability in basic rewardsCreative flair, thinks out of the boxStrong marketing abilitiesRewards employee innovationCorporate reputation for quality or technical leadership

Cost - leadership Strong central authority; tight cost controlsMaintains standard operating proceduresEasy to use manufacturing technologiesHighly efficient procurement and distributions systemsClose supervision, finite employee empowerment

Focus Frequent, detailed control reportsMay use combination of above policies directed at particular

strategic targetValues and rewards flexibility and customer intimacy


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Measures and costs of providing services and maintainingcustomer loyaltyPushes empowerment to employees with customer contact

Strategy implementation and control:

Strategy -> organization -> perfomance

Organization:Leadership:

- Use persuasion- Motivate employees- Shape culture/values

Human resources:- Recruit/select employees- Manage transfers/promotions/training- Direct layoffs/recalls

Information and control systems:- Revise pay, reward system- Change budget allocations- Implement information systems- Apply rules/procedures

Structural design:- Design organizational chart- Create teams- Determine centralization/decentralization- Arrange facilities, task design

management exam t1

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