183 terms

MGMT 301 Exam #2


Terms in this set (...)

Excellent Performance
Academic Integrity
Professional Behavior
Problem Solving
Decision Making = _____
taking advantage of opportunities
Decision Making also means _____.
-33 miners trapped after mile long tunnel collapses
-Example of Decision Making
Chilean Miners Example
Chilean President Sebastian Pinera makes decisions
-Says we need to start working immediately
-Should we try to save the miners?
-Find experts that know mining (geologists, survival experts) to advise
-What resources do we have? (food, water, money, experts)
-Talk to the families
-How do we manage the media?
Chilean Miners Above Ground
Led by Chilean Shift Leader Luis Urzua
-Basic Assessment
-What resources do we have? (food, water, medcal supplies
-Current State -> Future State (surviving)
-How do we keep our morale up?
-How can we help the rescuers?
Chilean Miners Below Ground
Technical Competency
the ability to understand new technologies and use them to their best advantage
-Ex: Chilean Miners
-Above Ground: President Sebastian Pinera figures out how to get the miners out by getting drillers to use advanced equipment
Analytical Competency
the ability to evaluate and analyze situations to make decisions and solve real problems
-Ex: Chilean Miners
-Above Ground: President Pinera has to look at situation and figure out how to get them out
-Below Ground: Luis Urzua says "we have enough food and water for 3 days."
Information Competency
the ability to gather and use information to solve problems
-Ex: Chilean Miners
-Above Ground: President Pinera finds experts in mining to give him info on how to get the miners out
-Below Ground: Luis Urzua and miners drill bore holes and sent note saying they were alive so they could receive food and water
planning, leading, organizing, and controlling
Technical Competency, Analytical Competency, Information Competency all revolve around _____.
Decisional Role
The problem solving role reflected in the Chilean Mine Example
Decisional Role
Role where information is used for entrepreneurship, resource allocation, disturbance handling, and negotiation
Information Role
Role where information is sought, received, and transferred among insiders and outsiders
Interpersonal Role
Role where information is used for ceremonies, motivation, and networking
Problem Solver
Make decisions to solve problems but only when required
President of of Italy when Costa Concordia sinks
-Solves how not to make the shipwreck an environmental disaster
Problem Solver Example
Problem Avoider
They ignore information that would otherwise signal the presence of a performance threat or opportunity
Captain of Costa Concordia
-Captain abandons ship and tries to lead from the shore
-He was afraid of accountability
Problem Avoider Example
Problem Seeker
Always looking for problems to solve or opportunities to explore
Penn State Hockey Coach Jon Batista
-The Pegulas are set to donate money to build a hockey rink and the Sandusky Scandal comes out
-Joe Batista talks to the Pegulas immediately and tells them not to let the scandal affect
-solves it before it becomes a problem
Problem Seeker Example
Performance Threat
a situation where something is wrong or likely to be wrong
Performance Opportunity
a situation that offers the possibility of a better future if the right steps are taken
-PO for Coke: Opportunity to expand business by buying honest tea
-PO for Honest Tea: Partner with Coke b/c they have mass distribution
Performance Opportunities for Coke and Honest Tea
-PT for Coke: The demand for tea is going up
-PT for Honest Tea: Coke is a much bigger company and could start producing tea and become a competitor
Performance Threats for Coke and Honest Tea
Systematic Thinking
Thinking where someone approaches problems in a rational and analytical fashion and proceeds step-by-step
Intuitive Thinking
Thinking where someone approaches problems in a flexible and spontaneous fashion and tend to deal with many aspects of a problem at once
Information Gathering (x-axis) and Evaluating (y-axis)
1st Part of Systematic vs Intuitive Thinking
Information Gatherers are either:
-Sensors: what are the details and specifics then look at the big picture (what to do now)
-Intuitives: Looks at concepts and big pictures then looks at details and specifics (future focused)
2nd Part of Systematic vs Intuitive Thinking
Infomation Evaluating (4 quadrants):
-Thinkers: solve problems first by looking at data and analytics then deal with how to solve the people problem
-Feelers: start with looking at people first then look at analytics and data to solve the problem
3rd Part of Systematic vs Intuitive Thinking
Sensation Thinkers (STs)
Deal with facts/goals
-look at data and analytics and solve problem first
-Ex: Sully
Intuitive Thinkers (ITs)
Deal with theories/concepts
-look at abstract ideas and concepts and solve problem first
Intuitive Feelers (IFs)
Are thoughtful/flexible
-look at abstract ideas and concepts and put people first
Sensation Feelers (SFs)
Deal with facts/feelings
-look at data and analytics and put people first
Chesley (Sully) Sullenberger
-Sensing: sees the engines aren't working then thinks of what to do
-Intuition: asks what should he do and where he should land so it's safe without looking at details
-Thinking: asks himself what's the rate of decent, realizes he can't turn around
-Feeling: 150 people are on board and he has to keep everyone on board and on the ground safe
Systematic vs Intuitive Decision-Making Example
Certain Environment
offers complete info on possible action alternatives and their consequences
-want to optimize the decision
-low risk
Risk Evironment
lacks complete info but you have enough info to compute strong probabilities of possible outcomes
-Ex: Coke buying Honest Tea
Uncertain Environment
lacks so much info that it is difficult to assign probabilities to the to the likely outcomes of alternatives
-high risk
Ex: Apple launching the iPad
Programmed Decision
A decision where complexity isn't very high
-Ex: a policy on budgeting where you have a $50,000 budget (basic numbers)
Non-Programmed Decision
A decision where complexity is high
-a brand new policy
Ex: making a facility completely smoke free
Classical Model
Model that describes decision making with complete info and rationality (acts in a perfect world)
-certain environment
-structured problem
-clearly defined
-complete info
-all alternatives and consequences are known
Optimizing Decision: choose the absolute best among alternatives
Behavioral Model
Model that describes decision making with limited info and bounded rationality (acts with cognitive limitations)
-unstructured problem
-not clearly defined
-uncertain environment
-incomplete info
-not all alternatives and consequences are known
Satisficing Decision: choose the first "satisfactory" alternative
-have more info, knowledge, and expertise
-more alternatives considered
-members gain commitment to work hard and support decisions
Group Decision-Making Advantages
-social pressures to conform
-minority domination forces people to go along with group
-if group is running out of meeting time, bad decisions can be made
Group Decision-Making Disadvantages
availability heuristic
when people use readily available information from memory to asses a current situation
-Ex: You decide not to buy shoes from a company b/c the last pair you bought wore out quickly. The potential bias is that the readily available information may be wrong b/c you may have purchased the wrong model for your needs or used them in the wrong conditions
representativeness heuristic
when people assess the likelihood of an occurrence based on a stereotyped set of similar events
-Ex: hiring someone for a job vacancy b/c he or she graduated from the same school as you
anchoring and adjustment heuristic
when people make decisions based on adjustments to a previously existing values or starting points
Ex: a manager gives an employee a raise by simply adjusting the prior year salary by one percentage point. The problem with this is this increment is anchored in an existing salary level which may be much lower than the employee's true market value.
Framing Error
When a person evaluates and resolves a problem within the context in which it is perceived-either positive or negative

-Ex: glass is 1/2 empty vs. 1/2 full
-marketing data show that a new product has a 40% market share:
-negative frame: there's a problem b/c the product is missing 60% of the market; "what are we doing wrong?"
-positive frame: 40% is successful; "how can we do even better?
Confirmation Error
When people seek or accept only information that is consistent or confirm a decision already made
-the error is that we neglect other information that might lead us to a different decision
Escalating Commitment
the continuation of a course of action even though it hasn't been working
1) Identify the Problem
2) Develop Alternatives
3) Decide on an Action
4) Implement Decision
5) Evaluate Results
Traditional Decision Making Model
Lonnie Johnson's Mark I Super Soaker
1) Identify the Problem
-The gun is too powerful, no one understands the gun
2) Develop Alternatives
-change name, new marketing
3) Decide on an Action
-TV advertising, store displays
4) Implement Decision
-Got TV commericals and store displays up and running
5) Evaluate Results
-It's a huge success and made millions
Traditional Decision Making Example
1) DEFINE what issue are
2) MEASURE your current state
3) ANALYZE the data and see the opportunities/issues
4) IMPROVE based on the data
5) CONTROL (go back measure how you're doing now
Advanced (Six Sigma) Decision Making Model (DMAIC)
TV studio that is struggling that uses DMAIC to improve
-Tips are posted immediately and reporters are paged immediately
-Writers and anchors use color coding to know who should speak
Advanced Decision Making Model (DMAIC) Cisco Example
DMAIC for delivering faster
1) DEFINE: Problem is we need same day delivery
2) MEASURE: how long does it take to deliver now, how many distribution centers are there
3) ANALYZE: if we have 40 distribution centers now, we need 80
4) IMPROVE: go from 3 day delivery to 2 day to 1 day to same day
5) CONTROL: measure how we progessed (went from 3 day delivery to same day delivery)
Advanced Decision Making Model (DMAIC) Amazon Example
Setting performance objectives and determining how to get them done
Judging and Perceiving
2 types of Personal Planning
formal, structured planning approach
-time is linear
informal, unstructured planning approach
-based on interests, time cycles over and over
Planning your whole day out at the amusement park would be what kind of planning?
Going with the flow at the amusement park would be what kind of planning?
Put the big rocks in the jar first -> small rocks -> sand -> water
-the big priorities and most important things come first
Priorities and Big Rocks Planning Example
1) Define objectives
2) Figure out where you currently stand in reaching your objectives
3) Think about the alternative scenarios for what may happen
4) Choose the best alternative scenario and make a plan
5) Implement plan and evaluate results
Planning Process Steps
-Action Oriented
-Priority Oriented
-Advantage Oriented
-Change Oriented
4 Components of Good Planning
Action Oriented
Planning gives us a results-driven sense of direction
Priority Oriented
Planning highlights the most important things for our attention
-what has to happen 1st, 2nd, 3rd?
Advantage Oriented
Planning makes sure that resources are used to their best advantage
-leverage what you're good at
Change Oriented
Planning helps us anticipate and deal with problems and opportunites
What major would deal with the following for planning the Shanghai Disney Amusement Park?
-Events Planning
What major would deal with the following for planning the Shanghai Disney Amusement Park?
-Raising Capital
What major would deal with the following for planning the Shanghai Disney Amusement Park?
-Income Statements
-Balance Sheets
What major would deal with the following for planning the Shanghai Disney Amusement Park?
-Pay Scales
-Hiring Process
-Project Management
-Training Programs
-Performance Management
Supply Chain
What major would deal with the following for planning the Shanghai Disney Amusement Park?
-Planning Food/Beverage Supply
-Supply Logistics
Risk Management
What major would deal with the following for planning the Shanghai Disney Amusement Park?
-Following Regulations
-Location Risk
-External Risks
Hierarchy of Objectives
the lower level objectives help to accomplish higher-level ones
-Mission and Purpose
-Top Management Objective
-Senior Management Objective
-Middle Managment Objective
-Team Leader/Supervisor Objective
Planning Hierarchy (Hierarchy of Objectives)
Alignment and Followthrough
What is important about hierarchy of objectives?
Boeing Jets
Long Range (3+ years) Planning Example
Hewlett Packard Printers
Short Range (3+ years) Planning Example
Strategic Plan
plan that identifies long term directions for the organization
-the "what"
Operational/Tactical Plan
sets out ways to implement a strategic plan
-the "how"
Functional Plan
plan that identifies how different parts of an enterprise will contribute to accomplishing strategic plans
-financial, marketing, facilities, human resources, production, accounting
-Strategic Plan: college, trade school, hollywood
-Operational/Tactical Plan: where to go, how to get there, money, applications
Planning and PSU Students Example
-Strategic Plan: _____
-Operational/Tactical Plan _____
-Strategic Plan: win a national championship
-Operational/Tactical Plan: recruiting, training, building chemistry
Planning and Sports Teams Example
-Strategic Plan: _____
-Operational/Tactical Plan _____
-Strategic Plan: create a beauty piolet center and bring in customers
-Operational/Tactical Plan: beauty concierge, play bar, trending now station
Nordstrom Planning Example
-Strategic Plan: _____
-Operational/Tactical Plan _____
standing plan that communicates broad guidelines for decisions and actions
-Broad Guidelines
precisely describes actions to take in specific situations
-Specific Actions
-found in employee handbooks
-Policy: No Smoking Allowed
-Procedure: If you do not smoke outside, you will be removed
Smoking in the Workplace
-Policy: _____
-Procedure: _____
a plan that commits resources to projects or activities
Zero-Based Budget
allocates resources as if each budget was brand new
-ensures scarce resources aren't wasted
-Contingency Planning
-Scenario Planning
-Participatory Planning
-Goal Setting
Big 6 Planning Tools
-Gulfstream Aerospace G650 (new plane being released
Big 6 Planning Tools Examples
using statistical tools and intuition based on experience to predict a future state
-G650 Ex: survey people, look at old sales, hire more people, buy more factories
-Thon Ex: figure out how much food/water they need
Contingency Planning
identifying actions to take when a strategic or tactical plan must change based on circumstances (good or bad)
G650 Ex: what if you get too many orders for planes
-Thon Ex: what to do if food can't be delivered
Scenario Planing
considering future scenarios and developing plans to address those issues
-G650 Ex: Gulf Stream receives their orders and a recession hit and people call and ask for a dlay on their orders
Thon Ex: power outage from a storm
comparing your company to outside organizations both in your industry and in other businesses
-G650 Ex: touring other companies and seeing how they manufacture things
-Thon Ex: find out how other organizations raise money
Participatory Planning
includes those impacted by plans and/or who will implement your plan in the process
-G650 Ex: make sure mechanics and factory floor workers are safe
-Thon Ex: how can we better help the dancers
Goal Setting
developing clear quantified measure that guide an organization's and individuals's work
-G650 Ex: want to sell this many planes, make this much money
-Thon Ex: want to raise this much money
Goal Setting Components
process of measuring performance and taking action to ensure desired results
Blazing Saddles Movie
-stunt horse trained to fall over
-after seeing the movie, a drunk guy tried punching a police horse
-he was out of control and corrective action needed to take place
Controlling Example
1) Set Performance Objectives
2) Measure Actual Performance
3) Compare Actual Performance to Objectives
4) Take Necessary Actions
4 step Control Process
Disney Control Example
-number of riders
-average ride time
-average wait time
-cost of maintenance
-number of workers
-height requirement
What would you need to measure for Rides? (Control)
-average wait time
-time for food to come out
-seating capacity
-length of average stay
What would you need to measure for Resturaunts? (Control)
-amount of inventory
-average time spent in store
-number of people in the store
-customer satisfaction
-product popularity (sales by SKU)*
What would you need to measure for Retail? (Control)
Stock Keeping Units (every single item in the store)
-number of hotel rooms available
-number of hotels
What would you need to measure for Rest? (Control)
Feed Forward Control
control that ensures clear directions and needed resources before work begins
Concurrent Control
control that focuses on what happens during the work process
Feedback Control
control that takes place after completing an action
Feed Forward Control = _____
Concurrent Control = _____
Feedback Control = _____
Star Wars Feed Forward Controls (Inputs)
These controls for Star Wars are what kind of controls?
-locations for shoots and project costs
-selection and cost of actions
-volume of production talent needed
-quantities of film materials required
-accommodations for cast and crew
-security required
Star Wars Concurrent Controls (Throughputs)
These controls for Star Wars are what kind of controls?
-payroll management case and crew
-ongoing management of supplies needed daily
-weather for shooting assessments
-transportation for all members
-track each budget category
- assess contingency needs
-develop promotion plan, begin spending
Star Wars Feedback Controls (Outputs)
These controls for Star Wars are what kind of controls?
-total cost to produce
-total cost to promote
-impact of promotion
-tickets sold
-final pay outs
-secure future funding commitments
Management by Objectives
process of joint objective setting between a superior and a subordinate
Jointly Act -> Indvidually Act -> Jointly Control
Management by Objectives Chart
Jointly Act
Management by Objectives
-Step 1
-setting objectives
-setting standards
-choosing actions
Individually Act
Management by Objectives
-Step 2
-performing tasks (member or employee)
-providing support (leader or manger)
Jointly Control
Management by Objectives
-Step 3
-reviewing results
-discussing implications
-renewing MBO cycle
Bureaucratic Control
control that influences behavior through authority, policies, procedures, job descriptions, budgets and day-to-day supervision
-Ex: sexual harassment policies and procedures help prevent sexual harassment
Market Control
control that is the influence of market competition on the behavior of organizations and their members
Ex: Walmart starts using renewable energy so their competitors feel they must
Clan Control (Social Norm)
control that influences behavior through social norms and peer expectations
-Ex: college students reflect this in what they wear, how they speak, and how they behave around their friends
After-Action Review
structured review of lessons learned and results accomplished through a completed project, task force assignment, or special operation
-Ex: Lululemon recalled black yoga pants and offered full refunds to customers b/c they were see-through when worn
_____ is the big umbrella that fallsover planning, organizing, leading, and controlling.
-connects directly to planning
comprehensive plan guiding resource allocation to achieve long term organizational goals
strategic intent
focuses energy on a compelling goal
-Dunkin' Donuts generates steady cash flow
-good relationship with franchisee and franchisor
-strong sister brand in Baskin Robbins
-put emphasis on coffee instead of donuts
-took northeast brand and expanded it*
-franchisee's put up the money*
Dunkin' Donuts Strategy Example
1) Core Benefit Proposition (Top #1)
-what is the core that drives our business
2) Uniqueness
3) Competitive Advantage
-ability to outperform rivals
4) Sustainable Competitive Advantage
-hard for competitors to imitate
Big Strategy Issue
Dunkin' Donuts #1 Core Benefit = Coffee
-Nigel Travis (CEO) is good at strategy and brings up "Coffee" for every question he's asked
Dunkin' Donuts Core Benefit Example
1) Corporate
2) Business
3) Functional
3 Levels of Strategy
Corporate Strategy
strategy that sets long term-term direction for the entire enterprise
-General Electric Ex: you decide you want to hit a new market
Business Strategy
strategy that identifies how a division or strategic business unit will compete in its product or service domain
-General Electric Ex: switching from one type of light bulb to another
Functional Strategy
strategy that guides activities within one specific area of operations
General Electric Ex: manufacturing, finance, supply chain, accounting
-Getting Bigger
-Geting Smaller
2 Strategy Approaches for Corporations
1) Basic Growth
2) Concentration
3) Diversification
4) Vertical Integration
Getting Bigger (Foundational Growth) Strategies
Basic Growth
growth with in current operations without expanding business or creating new stores
Ex: Dunkin' Donuts adding breakfast sandwich, Starbucks creating Blonde Roast, McDonald's all-day breakfast
Concentration Strategy
growth by building more stores or expanding current business
-Hub and Spoke System (building more stores)
Ex: Walmart and Sam's Club building stores across the US
(Unrelated) Diversification Strategy
growth by buying other businesses that are different from yours or entering new business areas
-Ex: General Electric has all different businesses (GE Aircraft, GE Motors, GE Plastics, GE Lighting)
(Related) Diversification Strategy
growth by expanding business areas similar to yours
-Ex: Pepsico bought Frito Lay, Gatorade, Tropicana, Quaker Oats
(Forward) Vertical Integration
growth by acquiring suppliers
-Ex: Apple buying a chip manufacturing company
(Backward) Vertical Integration
growth by acquiring distributors
-Ex: Coke or Pepsi buying major bottlers
1) Restructure
2) Downsize
3) Bankruptcy
4) Liquidation
5) Divestiture
Getting Smaller (Retrenchment) Strategies
retrenchment strategy
strategy that changes operations to correct weaknesses (perhaps b/c of too much growth in a company
making changes to cut costs and buy time to try to strategies to improve success
-getting smaller strategy
-more common
decreasing the size of operations
-getting smaller strategy
occurs when a business closes and sells its assets to pay creditors
-getting smaller strategy
protects and insolvent firm from creditors during a period of reorganization to restore profitability
-getting smaller strategy
involves selling key parts of an organization to refocus attention on core business ares
-getting smaller strategy
globalization strategy
strategy that uses standardized products and advertising worldwide (view world as one large market)
-Ex: Gillette sells and advertises its razors around the world
multidomestic strategy
strategy that customizes products and advertising to fit local markets
-Ex: Bristol Myers, Proctor & Gamble, and Unilever all vary their products to match consumer preferences in different countries
transnational strategy
strategy where firms try to tap business resources and customer markets worldwide (w/o having a strong national identity)
-Ex: Ford strives to become a global brand by drawing on design, manufacturing, and distribution expertise all over the world to build car platforms (these are then modified to suit the local tastes)
strategic alliance
organizations join together in partnership to pursue an area of mutual interest
strategy of working with rivals on projects of mutual benefit
e-business strategy
strategy that uses the Web and mobile apps to gain competitive advantage
B2C business strategy
strategy that links businesses with customers
-Ex: buying a music download from Apple's iTunes store
B2B business strategy
strategy that links businesses together within supply chains
-Dell Computer sets up special Web site services that allows major corporate customers to manage their accounts online
C2B business strategy
strategy that links customers to businesses that can supply what they need
-different from B2C because it puts the initiative for the transaction in the hands of the customer
-Ex: Elance links customers needing a special project completed to businesses that will bid and complete the project
C2C business strategy
strategy that links customers together to make business transactions
P2P business strategy
link persons needing services with those to provide them
-Ex: Uber
strategy that uses the Web to allow customers to provide opinions and suggestions on products and their designs
-Ex: Threadless.com allows online customers to submit designs for T-shirts
Mission = _____
where we're going in the future
Vision = _____
-internal driven
-defines the company's business, its objectives and approach to reach those objectives
-external driven
-desribes the future desired position of a company
-strengths and weaknesses go with internal
-opportunities and threats go with external
SWOT Analysis
_____ and _____ go with internal
_____ and _____ go with external
-Strengths: good supplier relations, use existing technology, simple design
-Weaknesses: high production cost, high start up cost, bulky design
-Opportunities: large market, few competitors, upgrade generationally
-Threats: easily reproducible, seasonal demand, recession
"Safe Desk" SWOT Analysis Example
-Strengths: _____
-Opportunities: _____
-Threats: _____
1) Competitors
2) New Entrants
3) Suppliers
4) Customers
5) Substitutes
Porter's 5 Forces
1) Competitors: Apple, Mac
2) New Entrants: new technologies
3) Suppliers: Microsoft selling and supplying Dell w/ processing chips
4) Customers: interested in price
5) Substitutes: other computers
5 Forces Dell Example
1) Competitors: _____
2) New Entrants: ______
3) Suppliers: _____
4) Customers: _____
5) Substitutes: _____
strategic leadership
capability to inspire people to successfully implement organizational strategies
-be a guardian of trade-offs
-needs to create a sense of urgency
-make sure everyone understands the strategy
-must be a teacher
BCG Portfolio Planning Matrix
helps you understand how to allocate resources across business unit or products
Market Share
BCG Portfolio Planning Matrix x-axis
Market Growth Rate
BCG Portfolio Planning Matrix y-axis
high market share
high market growth rate
= "growth" in Product Life Cycle
Stars (growth strategy)
-Ex: Netflix, Youtube
_____ market share
_____ market growth rate
= _____ in Product Life Cycle
high market share
low market growth rate
= "maturity" in Product Life Cycle
Cash Cows (stable or low growth mode)
-Ex: cable/satellite TV
_____ market share
_____ market growth rate
= _____ in Product Life Cycle
low market share
high market growth rate
= "introduction" in Product Life Cycle
Question Mark (grow or retrench)
-Ex: mobile streaming
_____ market share
_____ market growth rate
= _____ in Product Life Cycle
low market share
low market growth rate
= "decline" in Product Life Cycle
Dogs (retrench)
-Ex: DVDs
_____ market share
_____ market growth rate
= _____ in Product Life Cycle
intensity of rivalry among firms in industry
New Entrants
threats of new competitors in market
bargaining power of suppliers
bargaining power of buyers
threats of substitute products