Management Exam 1

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what is management
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team leadersresponsible for facilitating team activities toward achieving key results - does not typically have authority like top, middle, and first line managers -typically put in charge in teams that are multifunctional teams and typically have an urgent problem that they are trying to solvefunctional managerresponsible for just one organizational activity ex. director of finance, VP of productiongeneral managerresponsible for several organizational activities - executive VP, executive director for nonprofitfor-profit organizationsmaking money (profits) by offering products and servicesnonprofit organizationoffering services to some clients, not to make a profit ex. hospitals, colleges, social-welfare agenciesmutual benefit organizationsaiding members in order to advance their interests ex. political parties, labor unions, farm cooperatives, trade associations, clubstechnical skillsthe job-specific knowledge needed to perform well in a specialized fieldconceptual skillsthe ability to think analytically, to visualize an organization as a whole and understand how the parts work togetherhuman skills (soft skills)The ability to work well in cooperation with other people to get things done; the ability to motivate, to inspire trust, to communicate with othersmitzbergs useful findings-a manager relies more on VERBAL than written communication -a manager works long hours at an INTENSE PACE -a managers work is characterized by FRAGMENTATION, brevity, and varietyinterpersonalinteract with people inside and outside of their work units - figure head, leader, liaisoninformationalreceive and communicate information - monitor, disseminator, spokespersondecisionaluse information to make decisions to solve problems or take advantage of opportunities - entrepreneur, disturbance handler, resource allocator, negotiatorcompetitive advantage-this is the ability of an organization to produce goods or services more effectively than competitors do, thereby outperforming them -being responsive to others -innovation: finding ways to deliver better goods and services -quality: making improvements in quality so that consumers choose your product -efficiency: using the right amounts - overstaffing and overuse of raw materials can make you less competitiveinformation technology-by 2019, consumers worldwide are projected to spend 3.55 trillion online, double that 2015 -IT has led to growth of e-business, using the internet to facilitate every aspect of running a business -an abundance of new tools (email, text, social media, cloud computing, big data & al, telecommuting and video conferencing)diversity-the future does not resemble the past -non-hispanic whites are projected to decrease from 62% of the population in 2014, to 43% in 2060 -in 2030, nearly one in five US residents is expected to be 65 and older - in the coming years there will be a different mix of women, immigrants, and older people in the general population, as well as in the workforceglobalization-competition is global -american firms have been going out into the world inn a major way, even as the world has been coming to usethical standards-ethical behavior is not just nicety -ethics is doing the right thing when nobody is looking ex. worldcommsustainability-doing the right thing for our planet and future generations -every corporation that wants to be successful needs to work on being more sustainable as a main goal -sometimes called the "green movement"happiness and meaningfulness-work on things that are meaningful to you and manage them in a way that are happy and healthy to you (identify activities that you love doing, find a way to bring your natural strengths into the job, help others)triple bottom linerepresents planet, people, profit (3 P's) measures an organizations social, environmental, and financial performanceinnternal stakeholdersconsists of employees, owners, and the board of directorsownersconsist of all those who claim the organization as their legal propertyboard of directorsmembers elected by the stockholders to see that the company is being run according to their interestsexternal stakeholderspeople or groups in the organization's external environment that are affected by itthe task environmentconsists of 10 groups that present an organization with daily tasks to handle -customers -competitors -suppliers -distributors -strategic allies -employee organizations -financial institutions -local communities and governments -governmennt regulators -special interests -mass mediathe general environmentrefers to the macro environment such as economic, technological, and sociocultural -economic -technological -sociocultural -demographic -political-legal -internationalcustomerspay to use an organizations goods or servicescompetitorscompete for customers or for servicesuppliersprovide raw materials, services, equipment, labor, or energy to other organizationsdistributorshelp an organization sell its goods and services to customerstrategic allies2 organizations join forces to achieve synergyemployee organizationsLabor unions and professional associationsfinancial insitutioncommercial and investment banks, insurance companies, venture capitalist, crowd funding - obtaining small amounts of money from many peoplelocal communities and governmentsrely on tax base. provide tax incentives and institute claw backsgovernment regulatorsestablish ground rules under which corporations operate ex. FAA and commercial aviationspecial interestsgroups trying to influence special issues ex. MADD, NRA, PETA, etc.mass mediaprint, radio, TV and interneteconomicunemployment, inflation, interest rates and economic growthtechnologicalnew ways to transform resources into goods and servicessocioculturalchanges in country, society, or cultural human relationships and valuesdemographicpopulation, age, gender, ethnic origin, etc.political-legalshapes laws -creates opportunities and threatsinternationalchanges in global economics, politics, legal and technological forcesethical dilemmaa situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is unethical or even illegalethics-standards of right and wrong that influence behavior -may vary among countries and culturesutalitariangreatest good for the greatest number -often associated with financial performance - cost benefit analysisindividualthe individuals best long term interest -flaw: might not be good for allmoral rightsrespect for fundamental rights of human beings -bill of rightsjusticeimpartial standards of fairness and qualitySabanes-Oxley Act of 2002-established requirements for proper financial record keeping for public companies -penalties as much as 25 years in prison for noncompliance -requires CEO and CFO personally certify financial reports -AKA SOXKohlberg's 3 levels of personal moral developmentlevel 1: preconventional- follow rules to avoid unpleasant consequences level 2: conventional- follows expectations of others (most managers at this level) level 3: postconventional - guided by internal values, they lead by examplepromoting ethics-create a strong ethical climate -screen prospective employees -institute ethics code and training programs -reward ethical behavior: protecting whistle blowers who report organizational misconductCorportate Social Responsibilitynotion that corporations are expected to go above and beyond following the law and making a profitCarroll's Global Corporate Social Responsibility Pyramidtypes of social responsibilityclimate change, sustainability, green, natural capital, philanthropysustainabilityeconomic development that meets the needs of the present without compromising the ability of future generations to meet their own needsnatural capital (planet)-the value of natural resources, such as topsoil, air, water, and genetic diversity, which humans depend on -2016 poll: 70% of americans believe that climate change causes extreme weather, a rise in sea levelphilanthropy-making charitable donations to benefit humankind -"he who dies rich thus disgraced" - andrew carnegie -136 billionares have joined bill and melinda gates inn the giving pledge; a commitment to dedicate a majority of their wealth to philanthropyglobalizationthe trend of the world economy toward becoming a more interdependent system"global village"the "shrinking" of time and space as air travel and the electronic media have made it easier for the people around the globe to communicate with one another -25 years ago, cell phones, pages, fax, and voicemail links barely existed. by 2015, there were nearly 7 billion mobile - cellular subscriptions -today, of the 7.4 billion people in the world, 43% are internet usersthe global economythe increasing tendency of the economies of the world to interact with one another as one market instead of many national markets -positive effects: the world would be far more interconnected leading to a better and more affordable products and better communication among nations -negative effects: the movement, or outsourcing, of formally well-paying jobs overseas as companies seek cheaper labor costs, particularly in manufacturingmultinational corporationbusiness firm with operations in several countriesmultinational organizationnonprofit organization with operations in several countriesmegafirms and mergersare on the rise -industries are becoming bigger and cross- global, especially automobiles, telecommunications, and healthcare (CVS pharmacy)minifirmsare operating worldwide -the internet allows almost anyone to be global -small companies can get started more easily -small companies can maneuver fasterethnocentrictheir native country, culture, language, and behavior are superior to all others. "Parochialism" -often attributed to ignorance -linked to recruiting difficulties -high turnovers and lawsuitspolycentricnative managers in foreign offices know best - home office should just leave them alone -opposite of ethnocentricGeocentricwhat best is what is effective regardless of origin -takes more work than ethnocentric and polycentric -much greater potential payoff because you are using most effective available techniquewhy do companies expand internationally?1. Availability of supplies 2. New markets 3. Lower labor costs 4. Access to finance capital 5. Avoidance of tariffs & import quotashow companies expand internationally1. Global Outsourcing 2. Importing, exporting, countertrading 3. Licensing and franchising 4. Joint ventures 5. Wholly owned subsidiariesglobal outsourcingAlso called offshoring; use of suppliers outside the United States to provide labor, goods, or services -countertrend is "reshoring"importinga company buys goods outside the country and resells them domesticallycountertradingbartering goods for goodsexportinga company produces goods domestically and sells them outside the countrytrade protectionism / barriers to tradeorganizations promoting tradetrading bloca group of nations within a geographic region that have agreed to remove trade barriers with one anotherNAFTA(North American Free Trade Agreement): allows for freer flow of goods, services, and capital among the US, canada, and mexicoUSMCA(US/Mexico/Canada Agreement): signed 1/27/ 20 by US president, replaces NAFTA; canada still must signEU(European Union): 28 "borderless" trading partners in europe - or 27 with "brexit" (britians exit)APECAsia-Pacific Economic Cooperation group of 21 Pacific Rim countries, most with pacific coastline (US, Canada, China)ASEAN(Association of Southeast Asian Nations): trading bloc of 10 countries in Southeast AsiaMercosurlargest trading bloc in latin americaCAFTA-DR(Central American Free Trade Agreement): central america, including the Dominican republicthe BRICS countries5 major emerging economies: -brazil, russia, india, china, and south africa -coined by a financial analyst as promising markets for finance capital in the 21st century -represent 40% of the worlds population -represent about 20% of the world economic activityexchange ratesthe rate of currency of one area or country that can be exchanged for the currency of another area or countrylow context culture-shared meanings primarily from written or spoken words -includes US, Great Britain, Scandinavia, and GermanyHigh Context Culture-Rely heavily on situational cues for meaning when communicating with others -includes china, korea, japan, mexico and many arab coutnriespower distanceDegree to which societies members expect power to be equally shareduncertainty avoidancethe extent to which a society relies on social norms and procedures to alleviate the unpredictability of future eventsinstitutional collectivismthe extent to which individuals are encouraged and rewarded for loyalty to the group as opposed to pursuing individual goalsin-group collectivismthe extent to which people should take pride in being members of their family, circle of close friends, and their work organizationgender egalitarianismthe extent to which a society should minimize gender discrimination and role inequalitiesassertivenessthe extent to which a society expects people to be confrontational and competitive as opposed to tender and modestfuture orientationthe extent to which a society encourages investment in the future, as by planning and savingperformance orientationthe extent to which society encourages and rewards its members for performance improvement and excellencehuman orientationthe degree to which individuals are encouraged to be altruistic, caring, kind, generous, and fairlanguagemore than 7000 languages are spoken in the world6 basic cultural variationslanguage, interpersonal space, communication, time orientation, religion, law and political stabilityinterpersonal spaceamericans like to conduct business with 3.1 - 3.4 feet of space compared to asia where the range is 3.6 - 4.2 feetcommunicationdo you treat business as a "task" or as a "relationship"time orientationdoing one thing at a time (monochronic) or more than one thing at a time (polychronic)religionhow does religion influence work - related valueslaw and political stabilitybe aware of the Foreign Corrupt Practices Act, instability, expropriation, corruption, or labor abusesplanning-defined as setting goals and deciding how to achieve them -planning is coping with uncertainty by formulating future courses of action to achieve specified results -a plan is a document that outlines how goals are going to be metbusiness plana document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring successbusiness modeloutlines the need the firm will fill, the operations of the business, its components and functions, as well as the expected revenues and expensesstrategy or strategic planA large-scale action plan that sets the long-term goals and direction for an organization Represents an "educated guess" about what must be done in the long term for the survival or the prosperity of the organization or its principal parts Strategic plans generally reconsidered every year due to everchanging business conditionsmission statementexpresses the purpose of the organization -what is our reason for being? -why are we here?vision statementa clear sense of the future and the actions needed to get there -what do we want to become? -where do we want to go?value statementwhat the company stands for: its core priorities, the values its employees embody, and what its products contribute to the world -what values do we want to emphasizestrategic planningdone by top managers for the next 1-5 yearstactical planningdone by middle managers for the next 6-24 monthsoperational planningdone by first line managers for the next 1-52 weeksgoalsa specific commitment to achieve a measurable result within a stated period of timeshort term goalsSometimes referred to as tactical or operational goals, or just plain goals Generally span 12 months and connected to strategic goals in a hierarchy known as a means-end chainlong term goalsGenerally referred to as strategic goals Tend to span 1 to 5 years and focus on achieving the strategies identified in a company's strategic planoperating planA plan that breaks long-term output into short-term targets or goals -turns strategic plans into actionable short term goals and action plansaction plan-Defines the course of action (the tactics) needed to achieve a stated goal -Contains a projected date for completing the desired activities for each tacticstanding planfor activities that occur repeatedly over a period of time policy: outlines general response to designated problem or situation procedure: outlines responses to particular problems or circumstances rule: designates a specific required actionsingle-use planfor activities not likely to be repeated in the future program: encompass a range of projects or activities project: has less scope and complexity than a programSMART goalSpecific, Measurable, Attainable, Results-oriented, Target datesspecificgoals should be stated in specific rather than vague termsmeasurablewhenever possible, goals should be measurable or quantifiableattainablegoals should be realistic, challenging, and attainableresults orientedOnly a few goals should be chosen—say, five for any work unit. And they should be results-oriented —they should support the organization's datesGoals should specify the target dates or deadline dates when they are to be attained.Managment by Objectives (MBO)1. managers and employees jointly set objectives for the employee 2. managers develop action plans 3. managers and employees periodically review the employees performance 4. managers make a performance appraisal and reward the employees according to resultscascading goalsFor MBO goal - setting to be successful, the following things have to happen - top management must be committed to it -goals must be applied organization wide -goals must "cascade" - be linked consistently down through the organizationperformance objectivesexpress the objective as an outcome or end-result "increase sport utility sales by 10%" "reduce food spoilage by 15%"behavioral objectivesexpress the objectives as the behaviors needed to achieve an outcome "great all potential automobile customers with a smile and offer them to assist"learning objectivesexpress the objective inn terms of acquiring knowledge or competencies "attend sales training class"planning/control cycle1. Make the plan 2. Carry out the plan 3. Control the direction by comparing results with the plan 4. Control the direction by taking corrective action in two ways- (1) Correcting deviations & (2) Improving future plansporters strategic positioning-developed by famous strategist michael porter -attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company -"performing different activities from rivals, or performing similar activities in different ways"3 key principles of strategic positioning1. Strategy is the creation of a unique and valuable position -few needs, many customers (jiffy lube) -broad needs, few customers (services for the VERY wealthy) -broad needs, many customers 2. Strategy requires trade-offs in competing 3. Strategy involves creating a "fit" among activitiescorporate level strategy"What business or businesses are we in or should we be in?"business level strategyHow should we compete in this business or industry?Functional-level strategyhow can business functions support the business - level strategies?5 step strategic management process1. Establish the mission and the vision 2. Assess the current reality 3. Formulate the grand strategy 4. Implement the strategy 5. Maintain strategic controlenvironmental scanningMonitoring of an organization's internal and external environments to detect early signs of opportunities and threats that may influence the firm's plansSWOT analysisInternal: Strengths, Weaknesses External: Opportunities, ThreatsVRIOa framework for analyzing a resource or capability to determine its competitive strategic potential by answering four questions 1. value: is the resource or capability valuable? 2. rarity: is the resource of capability currently controlled by only a few firms or no other firms? 3. imitability: is the resource of capability costly for other firms to imitate? 4. organization: is the firm organized to exploit the resource or capabilityforecastinga vision or projection of the futuretrend analysishypothetical extension of a past series of events into the futurecontingency planningcreation of alternative hypothetical but equally likely future conditions -also called scenario planning and scenario analysisbenchmarkinga process by which a company compares its performance with that of high-performing organizationsGrand Strategy-Comes after assessing the current reality -strategy formulation -translates the broad mission and vision statement into corporate strategy: how the firms mission is accomplishedstrategy formulationchoosing among different strategies and altering them to best fit the organization's needscommon grand strategiesgrowth- expansion. increased revenues, market share, # of employees, # of customers stability- involves little or no charge - maintain the status quo defensive- retrenchment, reduction in effortsthe BCG matrixstars: have high growth, high market share - definite keeps cash cows: have slower growth but high market share - income finance stars and question marks question marks: risky new ventures - some will become stars, some dogs dogs: have low growth, low market share - should be gotten rid ofPorter's 5 Competitive Forcesporter contends that business - level strategies originate in five primary competitive forces in the firms environment -threats of new entrants -bargaining power of suppliers -bargaining power of buyers -threats of substitute products or services -rivalry among competitorsPorter's 4 competitive strategies1. cost-leadership -keep the costs, and hence prices, of a product or service below those of competitors and target a wide market 2. differentiation -offer products that are unique and superior value compared to those of competitors and target a wide market 3. cost-focus -keep the costs of a product below those of competitors and target a narrow market 4. focused-differentiation -offer products that are unique and superior value compared to those of competitors and target a narrow market3 core processes for businesses effectively executinga company overall ability to execute is a function of effectively executing according to three processes 1. people: consider who will benefit you in the future 2. strategy: consider how success will be accomplished 3. operations: consider what path will be followed