Management Exam 2 (C. 5-8)
Terms in this set (108)
The process by which managers establish the structure of working relationship among workers of the organizations is known as:
e. the span of control
Managers should design flexible structures, characterized by decentralized authority and empowered employees, for their organization when:
a. its environment is stable
b. its technology is simple
c. its workforce is highly skilled
d. its strategy is well understood
e. its strategy is simple
its workforce is highly skilled
The process by which managers decide how to divide into specific jobs the tasks that have to be performed to provide customers with goods and services is known as:
a. job design
b. job enlargement
c. task significance
d. mass-production technology
e. job enrichment
The degree to which a manger feels that his or her job is meaningful because of the way in which the jobs affects other people is known as:
a. skill variety
d. task significance
e. task identity
Federal Express Corporation organizes its managers according to the different regions of the world in which the managers work. This is an example of which type of organizational structure?
a. market structure
b. customers structure
c. product structure
d. matrix structure
e. geographic structure
According to the Job Characteristics Model, list and define the characteristics that determine how motivating the job is. Give examples for each:
skill variety: extent to which job requires employee to use wide range of different skills, abilities, and knowledge
task identity: extent to which requires worker perform all tasks necessary to complete the job
task significance: degree to which worker feels job is meaningful because of its effects on people inside organization
autonomy: degree to which job gives employee freedom and discretion
feedback: extent to which actually doing job provides worker with clear and direct info about performance
Discuss the advantages and disadvantages of a functional structure of organization. How does the effectiveness of a functional structure change as an operation grows?
The cluster of decisions that managers make to assist the organization to achieve its goals is known as:
b. scenario planning
e. related diversification
The planning process for an organization should be an ongoing process in which managers refine previous plans and modify these plans at all levels of the organization. Another way of saying this is that the plans should have:
Which level of a large organization contains the organization's marketing department, R&D department, and human resources department?
While conducting a SWOT analysis, "slower market growth" would be categorized under which of the following?
threat - slower market growth is external, and it is not an opportunity, so it must be a threat
Coca-Cola spends an enormous amount of money to try to convince consumers that its product is better than its competitors. Which of the following strategy is Coca-Cola pursuing?
b. focused low-cost
e. market development
Discuss why planning is important to managers within the organization?
- gets managers to participate in decision making
- gives organization its sense of direction and purpose
- helps managers coordinate their actions
- provides control over the performance of managers
What is meant by a SWOT analysis?
A SWOT analysis determines a company's internal strengths and weaknesses, as well as its external opportunities and threats, allowing a business to capitalize upon its strengths and opportunities and minimize its weaknesses and threats.
Example of each part of a SWOT analysis for a packaged good?
SynVens, a major retail chain in Hungary, is planning to diversify. It plans to enter the textile industry, and it aims to be first or second in market share in this industry in five years. This is an example of a __________-level plan strategy.
Which of the following explains the reasons for the inherently uncertain and risky nature of decision making and the making of satisfactory rather than optimum decisions by the managers?
a. logical model
b. administrative model
c. perspective model
d. rational model
Decisions that have been made many times in the past and for which managers have rules and guidelines about how to make similar decisions in the future are known as _______ decisions.
When the meaning of the info available to a manger is unclear and can be interpreted in several ways, the info is __________.
Managers at Dimensions, Inc., analyze the current situation of their organization and then develop plans to help their organization accomplish its mission and achieve its goals. This is known as ________.
a. synergy planning
b. strategy formulation
c. functional planning
d. SWOT analysis
A group of managers at Power Explosives analyzes both internal strengths and weaknesses of their organization as well as the opportunities and threats of the external environment. Which of the following planning exercises does this indicate?
a. mission analysis
b. SWOT analysis
c. functional analysis
An organization's accounting department decides to send out a bill to a new customer. What type of decision does this represent?
e. bounded rationality
The classical model assumes that:
managers have access to all the info they need to make the optimum decision
In the administrative model of decision making, when the number of possible alternatives to a decision is so large that the manager can't possibly evaluate all of them before making a decision, which of the following has occurred?
b. bounded rationality
d. devil's advocacy
e. optimum decision making
Esteban, a manager, performs a financial analysis of several investment alternatives in order to determine which is the most likely to impact the organization's profitability. This manager is focusing on which criterion for decision-making?
c. economic feasibility
d. dialectical inquiry
A manager challenges his subordinates to "think outside the box" to improve the way the unit does its work. This managers is focusing on the _______ of creating a learning organization.
a. personal mastery
b. mental models
c. team learning
d. shared vision
e. systems thinking
experiment, create, explore, freedom to do what you want
sophisticated ways of thinking
learning takes place in groups/teams
common model used by all to frame problems/opportunities
managers must recognize effects of one level of learning on another
Advantages and Disadvantages of group decision-making:
Advantages: more ideas, more talent, more knowledge, more commitment
Disadvantages: Too much time needed, blame game, run the risk of group think
Different ways to promote interpreneurship?
Product Champion - manager leads and provides vision for all parts of product
Skunkworks - group secluded and pushed to devote all attention to developing new products
Rewards for innovation - bonuses
formal system of task and reporting relationships that coordinate and motivate organizational members so that they work together to achieve organizational goals
organizational structure composed of all departments that an organization requires to produce goods/services
organizational structure composed of separate business units with which are the functions that work together to produce a specific product for a specific consumer (product, geographic, market)
each product line or business is handled by a self-contained individual
each kind of customer is served by a self-contained division -- also called customer structure
each region of country or area of world is served by self-contained division
organizational structure that simultaneously groups people and resources by function and by product
Product Team Structure
does away with dual reporting relationships and two-boss employees, and functional employees permanently assigned to cross-functional team that is empowered to bring new/redesigned product to market
Span of management/control
how many people can efficiently and effectively manage (ideal number depends on person)
Chain of command
links authority (all positions and elements)
few people making decisions
lots of people making decisions
What is controlling?
process whereby managers monitor and regulate how efficiently and effectively an organization and its members are performing activities necessary to achieve organizational goals
Profit ratios measure _____
how efficiently managers using organization's resources to generate profit
Example of profit ratio
ROI (return on investment)
Liquidity ratios measure ____
how well managers have protected organizational resources to be able to meet short-term obligations
Examples of liquidity ratios
current ratio (CA/CL); quick ratio
Leverage ratios measure ____
degree to which managers use debt or equity to finance ongoing operations
Activity ratios show ____
how well managers creating value from organizational assets
Examples of activity ratios
inventory turnover; days sales outstanding
Examples of liquidity ratios
debt-to-assets; time-covered ratios
Four Factors to Organizational Design?
organizational environment (changing vs. stable), strategy (which matches structure), technology, human resources
Differentiation strategy successful in ____ structure that values ____
Low-cost strategy successful in ____ with ____ norms
Hanover Insurance sets up a management information system (MIS) that gives its regional managers information about changes in the task environment that may affect the organization at some future time. This is an example of:
a. feedforward control
b. concurrent control
c. feedback control
d. bureaucratic control
e. MBO control
feedforward control (anticipate changes in future)
anticipate changes to happen in future
immediate feedback on inputs transformed to outputs; feedback as happens
customers' reactions to information; end of process
Management by objective -------
At which step of the control process do managers evaluate whether the actual performance of the organization differs significantly from the standards of performance being used to assess the performance of the organization?
a. measure actual performance
b. compare actual performance to the standards
c. establish the standards of performance
d. initiate corrective action
e. measure standards of performance
compare actual performance to the standards
In MBO, which of the following is established first?
b. organizational objectives
c. managers' goals
d. subordinates' goals
e. performance appraisals
Which of the following results when the organization's net income before taxes divided by total assets figure for the organization?
Return on investment
Advantages and Disadvantages of output control systems:
Advantages: easy, provide lots of data
Disadvantages: expensive, time consuming, loss of product (don't know product is bad until the end), doesn't provide motivation/direction
Why do people resist change? Explain how the type of culture an organization has affects how it changes.
#1 reason is fear; requires you to learn and do new things, we enjoy comfort, enacts a sense of control || the more adaptive the culture, the more we just get used to change
The goal of job enlargement is to
a. increase both scope of a job and salaries
b. increase range of tasks, and thus reduce boredom
c. increase quality assurance measures, thereby reducing mistakes
d. increase quantity of work assigned and thus reduce manpower
increase range of tasks, and thus reduce boredom
The control system that managers use at the conversion stage of transforming raw materials into finished goods is _________ control.
concurrent (control during)
A formal agreement that commits two or more companies to exchange or share their resources in order to produce and market a product is known as a(n) _________
a. outsourcing alliance
b. task force alliance
c. strategic alliance
d. market structure alliance
At Cosmeto & Co., Pat is assigned to a team to develop a new kind of shampoo. He reports to both the marketing manager and the personal care product manager. The organization is pursuing a _________ organizational structure.
c. global product
Organizational _________ is the formal system of task and job reporting relationships that determines how employees use resources to achieve organizational goals.
The manager of Inman, a convenience store, keeps track of the average sale amount for each customer as a way of deciding on the product mix to be carried in the store. This is an example of ____________ control.
Current ratio =
searching for and choosing an acceptable, or satisfactory, response to its problems and opportunities, rather than trying to make the best decision
Decision Making? Types?
- process by which managers respond to opportunities and threats by analyzing options and making determinations about specific organizational goals and courses of action
*programmed: routine, virtually automatic process
*non programmed: non routine decision making occurs in response to unusual, unpredictable opportunities and threats
*classical model: prescriptive approach based on assumption that decision maker can identify and evaluate all possible alternatives and their consequences
*administrative: approach that explains why decision making is inherently uncertain and risky and why managers usually make satisfactory rather than optimum decisions
degree of probability that the possible outcomes of a particular course of action will occur
Optimal decision in Classical model?
most appropriate decision in light of what managers believe to be the most desirable consequences for the organization
Steps in step approach?
Why is it important to have predetermined criteria?
have a comparison for the data/info gathered, allow for improvement
Learning organization? Linked to creativity?
organization in which managers try to maximize the ability of individuals/groups to think and behave creatively and thus maximize potential for organizational learning to take place -- creativity: decision maker's ability to discover original and novel ideas that lead to feasible alternative courses of action
Entrepreneur vs. Intrapreneur? Why important?
Entrepreneur: individual who notice opportunities and decide how to mobilize resources necessary to produce new and improved goods and services -- take action, leaders of change
Intrapreneur: employees of existing organizations who notice opportunities to develop new/improved products and better ways to make them
critical analysis of preferred alternative, made in response to challenges raised by group member who defends unpopular/opposing alternatives for sake of argument
type of qualitative research method, where various ideas and perspectives are tested
- identify and select appropriate goals and courses of action
(1) determine organization's mission and goals
(2) formulate a strategy
(3) implement strategy
Levels/processes of planning? (corp...
Corporate planning: mission, big picture, what value, long term planning (CEO, President)
Business planning: intermediate timed planning, take mission and form into divisions
Department/Functional planning: form strategies into implementation plan (manufacturing, marketing, R&D)
low-cost strategy: driving organization's costs down below costs of rivals (Mc.D's, WalMart)
differentiation strategy: distinguishing organization's products from products of competitors
"stuck in the middle": tend to have lower levels of performance than do those that pursue low-cost or differentiation strategy
focused low-cost strategy: serving only one segment of overall market and trying to be the lowest-cost organization serving that segment
focused differentiation strategy: serving only one segment of overall market and trying to be most differentiated organization serving that segment
diversification: expand operations into new industry in order to produce new kinds of valuable goods/services
SWOT Analysis - Porter's 5 forces?
SWOT: identify internals strengths and weaknesses, external opportunities and threats
5 Forces: (1) level of rivalry among organizations (2) potential for entry into industry (3) power of large suppliers (4) power of large customers (5) threat of substitute products
Horizontal vs. vertical integration? why used?
*Import/Export: high cost, total control, low risk
*Licensing/Franchising: low cost, control and risk depends on contract
*Strategic Alliances: low cost, lose control, risk goes up and down
*Joint venture: cost, control, and risk stay the same
*Wholly owned foreign subsidiaries: initial high cost then go down, great control, high risk
the interaction or cooperation of two or more organizations, substances, or other agents to produce a combined effect greater than the sum of their separate effects
Advantages and disadvantages of international strategies?
advantages: efficiency, phase release of products in life cycle
disadvantages: macroeconomic risk (not a one size fits all approach), change of employment and organization laws country to country
4 building blocks of organizational structure?
organizational environment, strategy, technology, human resources
Types of organizational structures? Why use them?
Product structure: each product line or business is handled by self-contained division
Geographic structure: each region of country or area of world served by self-contained division
Matrix structure: simultaneously groups people and resources by function and by product
Market structure: each kind of customer is served by self-contained division; AKA customer structure
Product team structure: does away with dual reporting and functional employee permanently assigned to cross-functional team that is empowered
Unity of command vs. chain of command
unity of command: the purpose of ensuring unity of effort under one responsible person (or commander) for completing a task
chain of command: links authority (all positions and elements)
Span of management?
how many people one can effectively and efficiently manage, ideal number depends on the person
Centralized vs. Decentralized?
centralized: few making decisions
decentralized: many making decisions
job design? how can be used?
process by which managers decide how to divide tasks into specific jobs
increase number of different tasks in given job by changing division of labor
jobs stay the same, people change, rotating tasks worker has to accomplish periodically (grant new skills and variety)
Steps in the controlling process?
(1) establish standards of performance, goals, or targets
(2) measure actual performance
(3) compare actual performance against chosen standards of performance
(4) evaluate results and initiate corrective action
Different types of control (output...
output (choose goals or output performance standards, measure performance) , behavior, clan (control exerted on individuals and groups by shared organizational values, norms, standards of behaviors, and expectations)
Financial ratios? what makes them up?
*Profit ratios (measure how efficiently managers using resources to generate profit)
*Liquidity ratios (measure how well managers protected resources to be able to meet short-term obligations)
*Leverage ratios (measure degree to which managers use debt or equity to finance ongoing operations)
*Activity ratios (show how well managers creating value from organizational assets)
Behavioral controls? why beneficial?
direct supervision, management by objective (MBO), bureaucratic control (rules and SOPs) || motivate employees, keep subordinates on track and make organizational structures work as they are designed to
MBO and how use?
formal system of evaluating subordinates on their ability to achieve specific organizational goals or performance standards and meet operating budgets || organization goals/objectives -> managers and subordinates goals -> review progress towards meeting goals || goals - action - review
organizational culture? how used as control mechanism?
shared set of beliefs, expectations, values, norms, and work routines that influence how members of an organization relate to one another and work together to achieve organizational goals || close knit culture, all decisions and actions become oriented toward helping organization perform well
Change process steps?
(1) Assess need for change - recognize there is a problem, identify source of problem
(2) Decide on the change to make - determine ideal future state with a "specific vision"
(3) Implement the change - decide whether top-down (implement quickly) or bottom-up exchange (implement gradual)
(4) Evaluate the change - compare pre-change with post-change; use benchmarking (compare specific dimensions of performance to that of another organization's)
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