management exam 1 review.doc
TRANSCRIPT
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Management Study Review Exam 1
Chapters 1-5
Chapter 1 The Management Process Today
All managers work in organiations and are responsi!le "or supervising the use o" organiationshuman and other resour#es to a#hieve its goals$
%rganiation #olle#tions o" people who work together and #oordinate their a#tions to a#hieve a
wide variety o" goals$Resour#es in#lude assets su#h as people and their skills& know-how& and knowledge'
ma#hinery' raw materials' #omputers and in"ormation te#hnology' and "inan#ial #apital$
Management the planning& organiing& leading& and #ontrolling o" human and other resour#es
to a#hieve organiational goals e""i#iently and e""e#tively$
%ne o" the most important goals that organiations and their mem!ers try to a#hieve is to
provide some kind o" good or servi#es that #ustomer(s desire$
Ex) *ospital+taking #are o" patients& M#,onalds+$produ#ing !urgers
%rganiational per"orman#e a measure o" how e""i#iently and e""e#tively managers use
resour#es to satis"y #ustomers and a#hieve organiational goals$
E""i#ien#y a measure o" how well or produ#tively resour#es are used to a#hieve a goal$E""e#tiveness a measure o" the appropriateness o" the goals that managers have sele#ted "or the
organiation to pursue and o" the degree to whi#h the organiation a#hieves those goals$
Four essential managerial functions:
1$ lanning identi"ying and sele#ting appropriate goals and #ourses o" a#tion$ .here are threesteps to planning+/10 de#iding whi#h goals the organiation will pursue /0 de#iding whi#h
#ourse o" a#tion to adopt to attain those goals /20 de#iding how to allo#ate organiational
resour#es to attain those goals$
- the out#ome o" planning is strategy whi#h is de"ined as' a #luster o" de#isions a!out what goals
to pursue& what a#tions to take& and how to use resour#es to a#hieve goals$
$ %rganiing stru#turing working relationships in a way that allows organiational mem!er to
work together to a#hieve organiational goals$
- the out#ome o" organiing is the #reation o" an organiational stru#ture& whi#h is a "ormal
system o" task and reporting relationships that #oordinated and motivates mem!ers so that they
work together to a#hieve organiational goals$
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2$ 3eading arti#ulating a #lear vision and energiing and ena!ling organiational mem!ers so
that they understand the part they plan in a#hieving organiational goals$
- .he out#ome o" leadership is a high level o" motivation and #ommitment among organiationalmem!ers$
4$ Controlling evaluating how well an organiation is a#hieving its goals and taking a#tion tomaintain or improve per"orman#e$
- the out#ome o" the #ontrol pro#ess is the a!ility to measure per"orman#e a##urately andregulate organiational e""i#ien#y and e""e#tiveness$
*how well managers perform these functions determines how efficient and effective their
organizations are.
,epartment- a group o" people who work together and possess similar skills or use the same
knowledge& tools& or te#hniues to per"orm their 6o!s$
Types of Managers
.o per"orm e""i#iently& organiations employ 2 types o" managers
/10 7irst line managers o"ten #alled supervisors& is a manager who is responsi!le "or the daily
supervision o" non-managerial employees who per"orm many o" the spe#i"i# a#tivities ne#essary
to produ#e goods and servi#es$
/0 Middle managers a manager who supervises "irst line managers and is responsi!le "or
"inding the !est way to use resour#es to a#hieve organiational goals$ .hey help to in#reasee""i#ien#y& !etter utilie resour#es& redu#e manu"a#turing #osts& and improve #ustomer servi#es$A ma6or part o" the middle managers 6o! is to develop and "ine tune skills$
/20 .op managers a manager who is responsi!le "or the per"orman#e o" all departments$ .heyesta!lish organiational goals& de#ide how departments should intera#t& and monitor the
per"orman#e o" middle managers$ .hey are ultimately responsi!le "or the su##ess or "ailure o" an
organiation and devote most o" their time to planning and organiing$
.op management team a group #omposed o" the CE%& the C%%& and the heads o" the most
important departments$
CE% #hie" exe#utive o""i#er& most senior and important manager C%% #hie" operating o""i#er& se#ond in #ommand
10 Managerial roles by Henry Mintzberg
Managerial role the set o" spe#i"i# tasks that a manager is expe#ted to per"orm !e#ause o" the
position he or she holds in an organiation$
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.he 18 roles he developed are grouped into 2 !road #ategories)
,e#isional - #losely asso#iated with the methods managers use to plan strategy and utilieresour#es$
1$ Entrepreneur provides more and !etter in"o to use in de#iding whi#h pro6e#ts or
programs to initiate and in investing resour#es to in#rease organiational per"orman#e$$ ,istur!an#e handler a manager #an get real-time in"o through 9. to manage the
unexpe#ted event or #risis that threatens the organiation and to implement solutions
ui#kly$2$ Resour#e allo#ator a manager using human resour#e so"tware systems "rom
#ompany(s #an have easy a##ess to the detailed in"o needed to de#ide how !est to use
people and other resour#es to in#rease an organiations per"orman#e$
4$ :egotiator a manager must !e a!le to rea#h agreements with other managers orgroups #laiming the "irst right to resour#es or with the organiation and outside groups
su#h as suppliers or #ustomers$
9n"ormational - #losely asso#iated with the tasks ne#essary to o!tain and transmit in"ormationand so have o!viously !een dramati#ally impa#ted !y 9.$
5$ Monitor evaluate the per"orman#e o" mangers in di""$ "un#tions and take #orre#tivea#tion to improve their per"orman#e
;$ ,isseminator a manager #an use 9. to ui#kly and e""e#tively transmit in"ormation to
employees to in"luen#e their work attitudes and !ehavior$
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Con#eptual skills the a!ility to analye and diagnose a situation and to distinguish !etween
#ause and e""e#t$
*uman skills the a!ility to understand& alter& lead& and #ontrol the !ehavior o" other individualsand groups$
.e#hni#al skills the 6o!-spe#i"i# knowledge and te#hniues reuires to per"orm anorganiational role$ Examples in#lude a manager(s spe#i"i# skills su#h as manu"a#turing&
a##ounting& marketing& and in#reasingly& 9. skills$
Competen#ies the spe#i"i# set o" skills& a!ilities& and experien#es that allows one manager to
per"orm at a higher level than another manager in a parti#ular setting$
lobal !rganizations
lo!al organiation organiations that operate and #ompete in more than one #ountry$
?? Managers who make no attempt to learn and adapt to #hanges in the glo!al environment "indthemselves rea#ting rather than innovating$ "o#rma6or #hallenges stand out "or managers in
today(s world)
/10 !uilding a #ompetitive advantage
- #ompetitive advantage the a!ility o" one organiation to outper"orm other organiation!e#ause it produ#es desired goods or servi#es more e""i#ien#y and e""e#tively than its
#ompetitors$ .here are fo#r!uilding !lo#ks o" #ompetitive advantage)
1$ in#rease e""i#ien#y
$ in#rease uality2$ in#reasing speed& "lexi!ility& and innovation
4$ in#reasing responsiveness to #ustomers
/0 Maintaining ethi#al standards managers at all levels per"orm under pressure to in#rease the
level at whi#h their organiations per"orm$ ressure to in#rease per"orman#e #an !e healthy "or
an organiation !e#ause it #auses managers to think outside the !ox' however& too mu#h pressure#an !e harm"ul$ 9t #an lead to unethi#al !ehavior to get ahead$
/20 Managing a diverse work"or#e managers must esta!lish employment pro#edures andpra#ti#es that are legal& "air& and do not dis#riminate against any organiational mem!ers$
/40 Btiliing new in"ormation systems and te#hnologies new te#hnologies su#h as #omputer
#ontrolled manu"a#turing and in"ormation systems that link and ena!le employees in new waysare #ontinually !eing developed$
Chapter $ %al#es& 'ttit#des& (motions& and C#lt#re) The Manager
as a Person
ersonality traits enduring tenden#ies to "eel& think& and a#t in #ertain ways$
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?? it is important to understand the personalities o" managers !e#ause their personalities
in"luen#e their !ehavior and their approa#h to managing people and resour#es$
The Big fi*e personality traits
/10 Extraversion the tenden#y to experien#e positive emotions and moods and to "eel gooda!out onesel" and the rest o" the world$
? Managers who are high on extraversion are #alled extraverts and tend to !e so#ia!le&
a""e#tionate& outgoing& and "riendly$? Managers who are low on extraversion are #alled introverts and tend to !e less in#lined toward
so#ial intera#tions and have a less positive outlook$
/0 :egative a""e#tivity the tenden#y to experien#e negative emotions and moods& to "eeldistressed& and to !e #riti#al o" onesel" and others$
? Managers high on this trait may o"ten "eel angry and dissatis"ied and #omplan a!out their own
and others la#k o" progress$
? Sometimes the #riti#al approa#h o" this #an improve others per"orman#e$
/20 Agreea!leness the tenden#y to get along well with other people$? Managers high on agreea!leness are likea!le& tend to !e a""e#tionate& and #are a!out other
people$
? Managers low on this #an !e distrust"ul& unsympatheti#& in#orporative& et#$
/40 Cons#ientiousness the tenden#y to !e #are"ul& s#rupulous& and persevering$
? Managers high on this are organied and sel" dis#iplined$
? Managers low on this might sometimes seems la#k dire#tion$
/50 %penness to new experien#es the tenden#y to !e original& have !road interest& !e open to
wide range o" stimuli& !e daring& and take risks$? Managers who are high on this may !e espe#ially likely to take risks and !e innovative in their
planning and de#ision making$ i#e versa$
!ther personality trains that affect managerial beha*ior
9nternal lo#us o" #ontrol the tenden#y to lo#ate responsi!ility "or ones "ate within onesel"$
.hey see their own a#tions and !ehaviors as !eing ma6or de#isive determinants o" importantout#omes$
External lo#us o" #ontrol the tenden#y to lo#ate responsi!ility "or ones "ate in outside "or#esand to !elieve that ones own !ehavior has little impa#t on out#omes$
Sel" esteem the degree to whi#h individuals "eel good a!out themselves and their #apa!ilities$lease with high sel" esteem !elieve that they are #ompetent& deserving& and #apa!le o" handling
most situations$ 3ow sel" esteem is asso#iated with poor opinions o" themselves& unsure a!out
their #apa!ilities& and uestions their a!ility to su##eed$
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:eeds "or a""iliation the extend to whi#h an individual is #on#erned a!out esta!lishing and
maintaining good interpersonal relations& !eing liked& and having other people get along$
:eeds "or a#hievement the extent to whi#h an individual has a strong desire to per"orm
#hallenging tasks well and to meet personal standards "or ex#ellen#e$
:eeds "or power the extent to whi#h an individual desires to #ontrol or in"luen#e others$
alues- Dhat managers are trying to a#hieve through work and how they think they should !ehave$
.erminal value a li"elong goal or o!6e#tive that an individual seeks to a#hieve
Examples a #om"orta!le li"e& euality& inner harmony& true "riendship
9nstrumental value a mode o" #ondu#t that an individual seeks to "ollow$
Examples honest& am!itious& polite& intelle#tual& "orgiving
:orms in"ormal rules o" #ondu#t "or !ehaviors #onsidered important !y most mem!ers o" a
group or organiation$
'ttit#des
- a #olle#tion o" "eelings and !elieves$
o! satis"a#tion the #olle#tion o" "eelings and !elie"s that managers have a!out their #urrent
6o!s$
managers who have high levels o" 6o! satis"a#tion !elieve that their 6o!s have many
desira!le "eatures& "eel that they are !eing treated "airly
3evels o" 6o! satis"a#tion tend to in#rease as one moves up the hierar#hy in anorganiation$
9n general& it is desira!le "or managers to !e satis"ied with their 6o!s& "or at least two reasons$
1$ .hey will !e more likely to go the extra mile+$Fa!ove and !eyond the #all o" duty
organiational #itienship !ehaviors /%C@0 !ehaviors that are not reuired o" organiational
mem!ers !ut that #ontri!ute to and are ne#essary "or organiational e""i#ien#y& e""e#tiveness& and
gaining a #ompetitive advantage$
$ .hey will !e less likely to uit$
%rganiational #ommitment the #olle#tion o" "eelings and !elie"s that managers have a!outtheir organiation as a whole$
Managers who are #ommitted to their organiations !elieve in what their organiations
are doing& are proud o" what they stand "or& and "eel a high degree o" loyalty to their#ompany$
Mood a "eeling or state o" mind$
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Dhen people are in a positive mind they "eel ex#ited& enthusiasti#& a#tive& or elated$
Dhen people are in a negative mood they "eel distressed& "ear"ul& hostile
Emotions intense& relatively short-lived "eelings$
??resear#h has "ound that moods and emotions a""e#t the !ehavior o" managers and all mem!erso" an organiation$
Emotional intelligen#e the a!ility to understand and manage ones own moods and emotions
and the moods and emotions o" other people$
Managers with high emotional intelligen#e are most likely to understand how they are
"eeling and why$
*elps managers relate to other people and understand howGwhy they are "eeling a #ertain
way$
!rganizational C#lt#re
- the shared set o" !elie"s& expe#tations& values& norms& and work routines that in"luen#e theways in whi#h individuals& groups& and teams intera#t with one another and #ooperate toa#hieve organiational goals$
Attra#tion-sele#tion-attrition /ASA0 "ramework a model that explains how personality mayin"luen#e organiational #ulture$
alues o" the "ounder "ounders set the s#ene "or the way #ulture values and norms develop!e#ause their own values guide the !uilding o" the #ompany and they hire other managers and
employees who the "ounder !elieves will share these values and help the organiation to attain
them$
%rganiational so#ialiation the pro#ess !y whi#h new#omers learn an organiations values
and norms and a#uire the work !ehaviors ne#essary to per"orm 6o!s e""e#tively$
Most organiations have some kind o" so#ialiation program to help new employees learn
the ropes the values& norms& and #ulture o" the organiation$ EH orientation& Military
@oot #amp$
Ceremonies and rites "ormal events that re#ognie in#iden#e o" importan#e to the organiation
as a while and to spe#i"i# employees$
rites o" passage determine how individuals enter& advan#e within& or leave
Rites o" integration su#h as shared announ#ements o" organiational su##esses& o""i#e
parties& and #ompany #ookouts+#an !uild #ommon !onds among mem!ers$
Rites o" enhan#ement su#h as awards diners& newspaper releases& and employee
promotions& let organiations pu!li#ly re#ognie and reward employees$
Stories and language stories a!out organiational heroes and villains and their a#tions
provide #lues a!out values and norms$
Chapter + Managing (thics and ,i*ersity
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Ethi#al dilemma the uandary people "ind themselves in when they have to de#ide i" they
should a#t in a way that might help another person or group even though doing so might goagainst their own sel"-interest$
Ethi#s the inner guiding moral prin#iples& values& and !elie"s that other people use to analye orinterpret a situation and then de#ide what is the IrightF or appropriate way to !ehave$
?? the essential pro!lem dealing with ethi#al issues& and thus solving moral dilemmas& is thatthere is no a!solute or indisputa!le rules or prin#iples that #an !e developed to de#ide i" an
a#tion is ethi#al or unethi#al$
9t is important to realie that ethi#sGlaws #hange over passing time as peoples opinions andoutlooks alter$
-takeholders and (thics
Stakeholders the people and groups that supply a #ompany with its produ#tive resour#es and so
have a #laim on and stake in the #ompany$?.he stakeholders #an dire#tly !ene"it or !e harmed' there"ore& the ethi#s o" the #ompany ands its
managers are important to them$
Sto#kholders have a #laim in the #ompany !e#ause when they !uy sto#k or shares they !e#ome
its owners$ .hey are interested in the way a #ompany operates !e#ause they want to maximie
the return on their investment$ .hey also want to wat#h managers to ensure they are !ehaving
ethi#ally and not risking the investor(s #apital$
Managers managers are a vital stakeholder group !e#ause they are responsi!le "or using a
#ompany(s "inan#ial #apital and human resour#es to in#rease its per"orman#e and thus its so#kpri#e$
.he pro!lem has !een that in many #ompanies #orrupt managers "o#us not on !uilding
the #ompany(s #apital and sto#kholders wealth !us on maximiing their own personal#apital and wealth$
Employees a #ompany(s employees are the hundreds o" thousands o" people who work in its
various departments and "un#tions& su#h as resear#h& sales& and manu"a#turing$ Employeesexpe#t that they will re#eive rewards #onsistent with their per"orman#e$
Suppliers and distri!utors no #ompany operates alone$ Every #ompany is a network o"relationships with other #ompanies that supply it with the inputs /raw materials& la!or& et#$0 that it
needs to operate$
9mportant issues arise in the way #ompany(s #ontra#t and intera#t with their suppliers and
distri!utors$ .here are #on#erns how and when payments are made or produ#t ualityspe#i"i#ations are governed !y the terms o" legal #ontra#ts$
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Customers o"ten regarded as the most #riti#al stakeholder group sin#e i" a #ompany #annot
attra#t them to !uy its produ#ts& it #annot stay in !usiness$
Community& so#iety& and nation the e""e#ts o" the de#isions made !y #ompanies and their
managers permeate all aspe#ts o" the #ommunities& so#ieties& and nations in whi#h people
operate$? Community re"ers to the physi#al lo#ations like towns or #ities or to so#ial milieus like ethni#
neigh!orhoods
? Company a""e#ts the prosperity o" a so#iety and a nation and& to a degree that a #ompany isinvolved in glo!al trade& all the #ountries it operates in and thus prosperity o" the glo!al
e#onomy$
.#les for ethical decision making
.o help themselves and employees make ethi#al de#isions and !ehave in ways that !ene"it
stakeholders& managers #an use "our ethi#al rules or prin#iples to analye the e""e#ts o" their
!usiness de#isions on stakeholder$
The four rules for ethical decision making
/10 Btilitarian rule an ethi#al de#ision is a de#ision that produ#es the greatest good "or the
greatest num!er o" people$
/0 Moral rights rule an ethi#al de#ision is one that !est maintains and prote#ts the "undamental
or inaliena!le rights and privileges o" the people a""e#ted !y it$
- Example ethi#al de#isions that prote#t peoples rights to "reedom& li"e& and sa"ety$
/20 usti#e rule an ethi#al de#ision is a de#ision that distri!utes !ene"its and harms among
people and groups in a "air& euita!le& or impartial way$
- Example employees with same skill level should re#eive same pay$
/40 ra#ti#al rule an ethi#al de#ision is one that a manager has no relu#tan#e a!out
#ommuni#ating to people outside the #ompany !e#ause the typi#al person in a so#iety wouldthink it is a##epta!le$
hy sho#ld managers beha*e ethically
.he relentless pursuit o" sel"-interest #an lead to a #olle#tive disaster when one or more people
start to pro"it "rom !eing unethi#al !e#ause it en#ourages other people to !ehave the same way$
.rust a person(s #on"iden#e and "aith in another person(s goodwill$
Reputation the esteem or high repute that individuals or organiations gain when they !ehaveethi#ally$
Codes of (thics
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- "ormal standards and rules& !ased on !elie"s a!out right and wrong& that managers use to
help themselves make appropriate de#isions with regard to the interest o" stakeholders$
An organiations #ode o" ethi#s derives "rom three prin#ipal sour#es in the organiational
environment)
/10 So#ietal ethi#s standards that govern how mem!er o" a so#iety are to deal with ea#h otheron issues su#h as "airness& 6usti#e& poverty& and the rights o" the individual$
/0 ro"essional ethi#s standards that govern how mem!ers o" a pro"ession are to make
de#isions when the way they should !ehave is not #lear-#ut$/20 9ndividual ethi#s personal values and attitudes that govern how individuals intera#t with
other people$
(thical organizational c#lt#re
Managers( role in developing ethi#al values and standards in other employees is very important$
Employees naturally look to those in authority to provide leadership
Ethi#s om!udsman an ethi#s o""i#er who monitors an organiations pra#ti#es and pro#edures to
!e sure they are ethi#al$
The increasing di*ersity of the orkforce and the en*ironment
,iversity di""eren#es among people in age& gender& ra#e& ethni#ity& religion& sexual orientation&
so#ioe#onomi# !a#kground& and #apa!ilitiesGdisa!ilities$
.here are several reasons why diversity is su#h a pressing #on#ern and issue !oth in the popularpress and "or managers and organiations
Ethi#ally imperative that diverse people re#eive eual opportunities and !e treated "airly$ E""e#tively managing diversity #an improve organiational e""e#tiveness$
Resear#h shows that diverse individuals #ontinue to !e dis#riminated against in the
work"or#e$
Age& gender& ra#eGethni#ity& religion& #apa!ilitiesGdisa!ilities& so#ioe#onomi# !a#kground& sexualorientation+$these are all main reasons "or dis#rimination$
-e2#al Harassment
Juid pro uo sexual harassment asking "or or "or#ing an employee to per"orm sexual "avors in
ex#hange "or some reward or to avoid negative #onseuen#es$
*ostile work environment sexual harassment telling lewd 6okes& displaying pornography&
making sexually oriented remarks a!out someone(s personal appearan#e& and other sex-related
a#tions that make the work environment unpleasant$
-teps managers can take to eradicate se2#al harassment
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,evelop and #learly #ommuni#ate a sexual harassment poli#y endorsed !y top
management$
Bse a "air #omplaint pro#edure to investigate #harges o" sexual harassment$
Dhen it has !een determined that sexual harassment has taken pla#e& take #orre#tive
a#tions as soon as possi!le$
rovide sexual harassment edu#ation and training to all organiational mem!ers&in#luding managers$
Chapter 3 Managing in the lobal (n*ironment
Managers o" #ompanies large and small have #on#luded that in order to survive the 1st#entury
most organiations must !e#ome glo!al organiations$
lo!al organiations an organiation that operates and #ompetes in more than one #ountry$
i" orgs are to adapt to this #hanging environment& their managers must learn to understand
the "or#es to operate in it and how these "or#es give rise to opportunities and threats$
%rganiational environment the set o" "or#es and #onditions that operate !eyond an
organiation !oundaries !ut a""e#t a manager(s a!ility to a#uire and utilie resour#es$
.ask environment the set o" #ourses and #onditions that originate with suppliers& distri!utorsustomers& and #ompetitors and a""e#t an organiations a!ility to o!tain inputs and dispose o" its
outputs !e#ause they in"luen#e managers on a daily !asis$
eneral environment the wide-ranging e#onomi#& te#hnologi#al& so#io#ultural& demographi#&
politi#alGlegal& and glo!al "or#es that a""e#t an organiation and its task environment$
7or#es in the task environment result "rom the a#tions o" suppliers& distri!utors& #ustomers and
#ompetitors$
-#ppliers
9ndividuals and organiations that provide an organiation with the input resour#es and it needs
to produ#e goods and servi#es$
9n return the supplier re#eives #ompensation "or those goods$
Dhen an organiation has many suppliers "or a parti#ular input& it is a relatively strong
!argaining position with those suppliers and #an demand low-#ost& high-uality inputs
"rom them$ /9CEERSA0
lo!al outsour#ing the pur#hase o" inputs "rom "oreign suppliers or the produ#tion o" inputs
a!road to lower produ#tion #osts and to improve produ#t uality or design$
,istrib#tors
%rganiations that help other organiations sell their goods or servi#es to #ustomers$
.he #hanging nature o" distri!utors and distri!ution methods #an !ring opportunities and
threats "or managers$
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9" distri!utors !e#ome so large and power"ul that they #an #ontrol #ustomers( a##ess to a
parti#ular organiation(s goods and servi#es& they #an threaten the organiation !y
demanding that it redu#e the pri#e o" its goods and servi#es$
9n #ontrast& the power o" the distri!utor may !e weakened i" there are may options$
C#stomers9ndividuals and groups that !uy the goods and servi#es that an organiation produ#es$
An organiations su##ess depends on #ustomers
.he most o!vious opportunity asso#iated with expanding into the glo!al environment is
the prospe#t o" selling goods and servi#es to new #ustomers' however& it is important not
to pla#e too mu#h emphasis on this development$
:ational #ultures di""er in many ways& signi"i#ant di""eren#es o"ten reuire managers to
#ustomie goods and servi#es to suit the pre"eren#e o" lo#al #ustomers$
Example+$Mattel making an Asian @ar!ie doll to distri!ute in apan$
Competitors
%rganiations that produ#e goods and servi#es that are similar to a parti#ular organiation(sgoods and servi#es$
Rivalry !etween #ompetitors is potentially the most threatening "or#e that managers must
deal with$
.he potential to new #ompetitors is also a huge threat$ Dhen new #ompetitors enter an
industry& #ompetition in#reases and pri#e de#reases$
otential #ompetitors organiations that presently are not in a task environment !ut #ould enter
i" they so #hoose$
@arriers to entry "a#tors that make it di""i#ult and #ostly "or an organiation to enter a parti#ular
task environment or industry$
.he more di""i#ult and #ostly it is to enter the task environment& the higher the !arriers to
entry$
.he higher the !arriers to entry& the "ewer the #ompetitors$
@arriers to entry result "rom threesour#es)/10 E#onomies o" s#ale #ost advantages asso#iated with large operations$
/0 @rand loyalty #ustomer(s pre"eren#e "or the produ#ts o" organiations #urrently existing in
the task environment/20 overnment regulations that impede entry examples+$air transport& tele#ommuni#ations&
utilities$
(conomic forces
9nterest rates& in"lation& unemployment& e#onomi# growth& and other "a#tors that a""e#t the
general health and well !eing o" a nation or the regional e#onomy o" an organiation$
Technological forces
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%ut#omes o" #hanges in the te#hnology that managers use to design& produ#e& or distri!ute goods
and servi#es
.e#hnology the #om!ination o" skills and euipment that managers use in the design&
produ#tion& and distri!ution o" goods and servi#es$
-ocioc#lt#ral forces
ressures emanating "rom the so#ial stru#ture o" a #ountry or so#iety or "rom the national #ulture$
So#ial stru#ture the arrangement o" relationships !etween individuals and groups in a so#iety$
:ational #ulture the set o" values that a so#iety #onsiders important and the norms o" !ehavior
that are approved or san#tioned in that so#iety$
So#ial stru#ture and national #ulture not only di""er a#ross so#ieties !ut also #hange
within so#ieties over time$
,emographic forces%ut#omes o" #hanges in& or #hanging attitudes toward the #hara#teristi#s o" a population& su#h as
age& gender& ethni# origin& ra#e& sexual orientation& and so#ial #lass$
Political and legal forces
%ut#omes o" #hanges in laws and regulations& su#h as the deregulation o" industries& theprivatiation o" organiations& and the in#reased emphasis on environmental prote#tion$
lobal forces
%ut#omes o" #hanges in international relationships& #hanges in nations( e#onomi#& politi#al& andlegal systems& and #hanges in te#hnology& su#h as "alling trade !arriers& the growth o"
representative demo#ra#ies& and relia!le and instantaneous #ommuni#ation$
The changing global en*ironmentManagers now re#ognie that #ompanies exist and #ompete in a truly glo!al market$
Dhy has the glo!al environment !e#ome more open and #ompetitiveK 3owering !arriers to trade
and investment and the de#line in !arriers o" distan#e and #ulture$
,eclining barriers to trade and in*est
,uring the 1>8G28(s many #ountries ere#ted "ormina!le !arriers to international trade in the
!elie" that this was the !est way to promote their e#onomi# well !eing$
.ari"" a tax that a government imposes on imported or o##asionally& exported goods$
.he reason "or removing tari""s is that& very o"ten& when one #ountry imposes an import tari""&others "ollow suit and the result is a series o" retaliatory moves as #ountries progressively raise
tari"" !arriers against ea#h other$
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7ree-trade do#trine the idea that i" ea#h #ountry spe#ialies in the produ#tion o" the goods and
servi#es that it #an produ#e most e""i#iently& this will make the !est use o" glo!al resour#es$
,eclining barriers of distance and c#lt#re
@arriers o" distan#e and #ulture also #losed the glo!al environment and kept managers looking
inward$
?? .he shi"t toward a more open glo!al e#onomy has #reated not only more opportunities to sell
goods and servi#es in markets a!road !ut also the opportunity to !uy more "rom other #ountries$
4'"T' 4orth 'merican "ree Trade 'greement
E""e#tive an$ 1& 1>>4& and had the aim o" a!olishing the tari""s on >>L o" the goods traded
!etween Mexi#o& Canada& BS !y 884$
The role of national c#lt#re
Although eviden#e shows that #ountries are !e#oming more and more similar to one another& the
#ultures o" di""erent #ountries still vary widely !e#ause o" #riti#al di""eren#es in their values&norms& attitudes$
alues ideas a!out what a so#iety !elieves to !e good& right& desira!le& or !eauti"ul
:orms unwritten rules and #odes o" #ondu#t that pres#ri!e how people should a#t in parti#ularsituations
7olkways the routine so#ial #onventions o" everyday li"e$
Mores norms that are #onsidered to !e #entral to the "un#tioning o" so#iety and to so#ial li"e$
Holfstede5s model of 4ational C#lt#re
,eveloped "ive dimensions along whi#h national #ultures #an !e pla#ed$
/10 9ndividualism vs$ Colle#tivism
9ndividualism a worldview that values individual "reedom and sel" expression and adheren#e to
the prin#iple that people should !e 6udged !y their individual a#hievements rather than !y their
so#ial !a#kground$ Example valued in BS
Colle#tivism a worldview that values su!ordination o" the individual to the goals o" the group
and the adheren#e to the prin#iple that people should !e 6udged !y their #ontri!ution to thegroup$ Example highly valued in apan$
/0 ower distan#e
ower distan#e the degree to whi#h so#ieties a##ept the idea that ineualities in the power and
well !eing o" their #itiens are due to di""eren#es in individual(s physi#al and intelle#tual
#apa!ilities and heritage$
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/20 A#hievement vs$ :urturing %rientation
A#hievement orientation a worldview that values assertiveness& per"ormatn#e& su##ess& and
#ompetition$ Example apan and BS
:urturing orientation a worldview that values the uality o" li"e& warm personal "riendships&
and servi#es that #are "or the weak$ Example :etherlands& Sweden$
/40 Bn#ertainty avoidan#e
Bn#ertainty avoidan#e the degree to whi#h so#ieties are willing to tolerate un#ertainty and risk$
low un#ertainty avoidan#e *ong ong and BS
high un#ertainty avoidan#e 7ran#e and apan
/50 3ong-term vs$ Short-term orientation
3ong-term orientation a worldview that values thri"t and persisten#e in a#hieving goals$
Example *ong ong and .aiwan
Short-term orientation a worldview that values personal sta!ility or happiness and living "or the
present$ Example BS and 7ran#e$
Chapter 6 ,ecision Making& 7earning& Creati*ity& and 8nno*ation
,e#ision making- the pro#ess !y whi#h managers respond to opportunities and threats !y
analying options and making determinations a!out spe#i"i# organiational goals and #ourses o"
a#tion$
,e#ision making in #entral to !eing a managers
rogrammed de#ision making routine& virtually automati# de#ision making that "ollows
esta!lished rules or guidelines$Example a prin#ipal asks the s#hool !oard to hire a new tea#her !e#ause there are 48 student
per #lassroom$
.hey are #alled programmed !e#ause o""i#e managers do not need to repeatedly make
new 6udgments a!out what they should do
:on-programmed de#ision making non-routine de#ision making that o##urs in response to theunusual& unpredi#ta!le opportunities and threats$
9ntuition "eelings& !elie"s& and hun#hes that #ome readily to mind& reuire little e""ort and
in"ormation gathering& and result in on-the-spot de#isions$
Reasoned 6udgment a de#ision that takes time and e""ort to make and results "rom #are"ul
in"ormation gathering& generation o" alternatives& and evaluation o" alternatives$
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Classical Model
9 one o" the earliest models o" de#ision making
Classi#al de#ision making model a pres#riptive approa#h to devision making !ased on the
assumption that the de#ision maker #an identi"y and evaluate all possi!le alternatives and their#onseuen#es and rationally #hoose the most appropriate #ourse o" a#tion$
%ptimum de#ision the most appropriate de#ision in light o" what managers !elieve to !e themost desira!le "uture #onseuen#es "or the organiation$
'dministati*e model
- in #ontra#t it was proposed that managers do not have a##ess to all the in"o they need tomake a de#ision$
Administrative model an approa#h to de#ision making that explains why de#ision making is
inherently un#ertain and risky and why managers usually make satis"a#tory rather than optimumde#isions$
@ounded rationality #ognitive limitations that #onstrain one(s a!ility to interpret& pro#ess& and
a#t on in"ormation
Risk the degree o" pro!a!ility that the possi!le out#omes o" a parti#ular #ourt o" a#tion will
o##ur
Bn#ertainty unpredi#ta!ility
Am!iguous in"ormation in"o that #an !e interpreted in multiple and o"ten #on"li#ting ways$
Satis"i#ing sear#hing "or and #hoosing an a##epta!le& or satis"a#tory& response to pro!lems and
opportunities& rather than trying to make the !est de#ision$
-teps in the decision making process
/10 Re#ogniing the need "or a de#ision
/0 enerate alternatives
/20 Evaluate alternatives
/40 Choose among alternatives
/50 9mplement the #hosen alternative
/;0 3earn "rom "eed!a#k
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ro#p decision making
- roup de#ision making is superior to individual de#ision making in several respe#ts$Examples) #om!ined skills& less !ias& good de#isions& #orre#t one another$
- roup de#ision making #an also have down"alls$
Examples) groupthink& di""i#ulty agreeing& longer to make de#isions
roupthink a pattern o" "aulty and !iased de#ision making that o##urs in groups whose
mem!ers strive "or agreement among themselves at the expense o" a##urately assessingin"ormation relevant to a de#ision$
Example) @ay o" igs$
,evils advo#a#y #riti#al analysis o" a pre"erred alternative& made in response to #hallengesraised !y a group mem!er who& playing the role o" devils advo#ate& de"ends unpopular or
opposing alternatives "or the sake o" argument$
,iversity among groups #an improve de#ision making and are sometimes less prone togroupthink$
!rganizational learning and creati*ity
%rganiational learning the pro#ess through whi#h managers seek to improve employees(desire and a!ility to understand and manage the organiation and its task environment
3earning organiation an org in whi#h managers try to maximie the a!ility o" individuals and
groups to think and !ehave #reatively and thus maximie the potential to organiational learningto take pla#e$
Creativity a de#ision maker(s a!ility to dis#over original and novel ideas that lead to "easi!lealternative #ourses o" a#tion$
9nnovation the implementation o" #reative ideas in an organiation$
6 principles for creating a learning organizations
- Created !y Senge
/10 .op managers must allow every person in the org to develop a senese o" personal mastery$
Mangers must empower employees and allow them to experiment and #reate what they want$
/0 :eed to en#ourage employees to develop ways o" thinking to !etter explore #reativity$
/20 Mangers must do everything they #an to promote group #reativity$ .eam learning is moreimportant and individual learning$
/40 Mangers must emphasie the importan#e o" !uilding a shared vision$
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/50 Mangers must en#ourage systems thinking$
Promoting gro#p creati*ity
@rainstorming a group pro!lem solving te#hniue whi#h managers meet together to generate
and de!ate a wide variety o" ideasGalternatives to make a de#ision$
rodu#tion !lo#king a loss o" produ#tivity in !rainstorming sessions due to the unstru#tured
nature o" !rainstorming$
Chapter ; lanning& Strategy and Competitive Advantage
Managerial planning pro#ess in#ludes 2 steps10 determining an organiations mission and ma6or goals
0 #hoosing strategies to realie the mission and goals
20 sele#ting the appropriate way o" organiing resour#es to implement the strategies
.he :ature o" the lanning ro#ess
Strategy the #luster o" de#isions and a#tions that managers take to help an organiation attain
its goals$
?9n most organiations planning is a three step a#tivity$
1$ .he "irst step is determining the organiations mission and goals
Mission statement a !road de#laration o" an organiations purpose that identi"ies the
organiations produ#ts and #ustomers and distinguishes the organiation "rom its #ompetitors
$ .he se#ond step is "ormulating strategy$ Managers analye the organiations #urrent situation
and then #on#eive and develop the strategies ne#essary to attain the organiations mission andgoals$
2$ .he third step is implementing strategy$ Managers de#ide how to allo#ate the reosour#es andresponsi!ilities reuires to implement the strategies !etween people and groups within the
organiation$
3evels o" lanning
?9n large organiations planning usually takes pla#e at three levels o" management) #orporate&
!usiness& or division& and department or "un#tional$
,ivision a !usiness unit that has its own set o" managers and "un#tions or departments and
#ompetes in a distin#t industry$
,ivisional managers managers who #ontrol the various divisions o" an organiation$
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?9n turn& ea#h division has its own set o" "un#tions or departments manu"a#turing&
marketing& human resour#e management& RN,$ Example E has many di""erent !ran#hes o"
its #ompany /E Air#ra"t& E 3ighting& E motors0 and ea#h have their own "un#tions$
Corporate-level plan top management(s de#isions pertaining to the organiation(s mission&
overall strategy& and stru#ture$Corporate-level strategy a plan that indiviates in whi#h industries and national markets an
organiation intends to #ompete$
@usiness-level plan divisional managers( de#isions pertaining to divisions( long-term goals&
overall strategy and stru#ture$
@usiness-level strategy a plan that indi#ates how a division intends to #ompete against its rivalsin an industry$
7un#tion a unit or department in whi#h people have the same skills or use the same resour#es
to per"orm their 6o!s$
7un#tional managers managers who supervise the various "un#tions& su#h as manu"a#turing&a##ounting& and sales& within a division$
7un#tional-level plan "un#tional managers( de#isions pertaining to the goals that they proposeto pursue to help the division attain its !usiness-level goals$
Dho lansK
9n general& #orporate-level planning is the primary responsi!ility o" top managers' however&
lower level managers #an and usually are given the opportunity to !e#ome involved in the
pro#ess$
.ime *orions o" lans
.ime horion the intended duration o" a plan
Long term plans horion o" "ive years or more
Intermediate term plans horion !etween one and "ive years
Short term plans one year or less??.ypi#ally on the #orporate and !usiness level rolling plansare used& whi#h is a plan that is
updates and amended every year to take a##ount the #hanging #onditions in the external
environment$
Standing plans and single-use plans
Standing plans are used in situations in whi#h programmed de#ision making is appropriate$
Dhen the same situations o##ur repeatedly& managers develop poli#ies& rules& and standard
operating pro#edures$
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Single-use plans are developed to handle non-programmed division making in unusual or one- o"
a kind situations$