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Management Final Exam

Terms in this set (373)

efficiency
means to use resources - people, money, raw materials, and the like - wisely and cost- effectively
effectiveness
means to achieve results, to make the right decisions and to successfully carry them out so that they achieve the organizations goals
management
o The pursuit of organizational goals efficiently and effectively
o Integrating the work of people
o Planning, organizing, leading, and controlling the organizations resources
organization
...
the management process
· Planning - you set goals and decide how to achieve them
· Organizing - you arrange tasks, people and other resources to accomplish the work
· Leading - you motivate, direct, and otherwise influence people to work hard to achieve the organizations goals
· Controlling - you monitor performance, compare it with goals, and it takes corrective action as needed
top management
make long term decisions about overall direction of the organization and establish the objectives, policies, and strategies for it
middle management
· implement the policies and plans of the top managers above them and supervise and coordinate the activities of the first line managers below them
first-line management
· - make short term operating decisions, directing the daily tasks or nonmanagerial personnel
Nonmanagerial Employees
functional manager, general manager
functional managers
responsible for just one organizational activity
Ex. Director of finance, VP of production
general managers
Responsible for several organizational activities
Ex. Executive VP, an executive director for a non-profit
Mintzberg's 3 main managerial roles
interpersonal, informational, decisional
interpersonal role
o Interact with people inside and outside of their work units
o Figure head, leader, liaison
informational role
o Receive and communicate information
o Monitor, disseminator, spokesperson
decisional role
o Use information to make decisions to solve problems or take advantage of opportunities
o Entrepreneur, disturbance handler, resource allocator, negotiator
three sets of skills that managers need to cultivate
technical, conceptual, and human
technical skills
the job- specific knowledge needed to perform well in a specialized field
human 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 others
conceptual skills
The ability to think analytically, to visualize an organization as a whole and understand how the parts work together
seven challenges to being an effective manager
managing for competitive advantage, information technology, diversity, globalization, ethical standards, sustainability and happiness and meaningfulness
triple bottom line
o Represents people, planet, profit (3 P's)
o Measures an organization's social, environmental, and financial performance
internal stakeholders
o Consists of employees, owners, and the board of directors
task environment stakeholder
o consists 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 gov, government regulators, special interests,
customers
pay to use an organizations goods or services
competitors
compete for customers or for service
supplier
provide raw materials, services, equipment, labor, or energy to other organizations
distributors
help an organization sell its goods and services to customer
strategic allies
2 organizations join forces to achieve synergy
employee organizations
labor unions and professional association
financial institutions
· commercial and investment banks, insurance companies, venture capitalist, crowd funding - obtaining small amounts of money from many people
local communities and governments
rely on tax base. Provide tax incentives and institute claw backs
government regulators
establish ground rules under which corporations operate
o FAA and commercial aviation
special interests
· groups trying to influence specific issues
o MADD, NRA, PETA, etc.
mass media
print, radio, TV, and internet
general environment stakeholders
o Refers to the macro environment, such as economic, technological, and sociocultural
-economic, technological, sociocultural, demographic, political-legal, international
economic
· unemployment, inflation, interest rates and economic growth
technological
new ways to transform resources into goods and services
sociocultural
changes in country, society or cultural human relationships and values
demographic
population, age, gender, ethnic origin, etc.
political-legal
· shapes laws
o Creates opportunities and threats
international
· changes in global economics, politics, legal and technological forces
ethics
o Standards of right and wrong that influence behavior
o May vary among countries and cultures
values
o Relatively permanent and deeply held underlying beliefs and attitudes that help determine a person's behavior
ethical dilemmas
o 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 illegal
whistleblower
an employee who exposes unethical or illegal conduct within the federal government or one of its contractors
utalitarian approach
· greatest good for the greatest number.
o Often associated to financial performance - cost benefit analysis
individual approach
· the individuals best long term interest.
o Flaw: may not be good for all
moral-rights approach
· - respect for fundamental rights of human beings
o Bill of rights
justice approach
- impartial standards of fairness and equity
4 ways organizations can promote ethics
· Create a strong ethical climate
· Screen prospective employees
· Institute ethics code and training programs
· Reward ethical behavior: protecting whistle blowers who report organizational misconduct
corporate social responsibility
o Notion that corporations are expected to go above and beyond following the law and making a profit
philanthropy
o Making charitable donations to benefit humankind
o "he who dies rich thus disgraced" -Andrew Carnegie
o 136 billionaires have joined bill and Melinda gates in the giving pledge; a commitment to dedicate a majority of their wealth to philanthropy
globalization
· The trend of the world economy toward becoming a more interdependent system
global village
o The "shrinking" of time and space as air travel and the electronic media have made it much easier for the people of the globe to communicate with one another
o 25 years ago, cell phones, pages, fax, and voicemail links barely existed. By 2015, there were nearly 7 billion mobile- cellular subscriptions
o Today, of the 7.4 billion people in the world, 43% are internet users
multinational corporation
- Business firm with operations in several countries
multinational organization
· nonprofit organization with operations in several countries
ethnocentric
· their native country, culture, language, and behavior are superior to all others. "parochialism"
o Often attributed to ignorance.
o Linked to recruiting difficulties
o High turnover and lawsuits
polycentric
· native managers in foreign offices know best - home office should just leave them alone
o Opposite view of ethnocentric
geocentric managers
· what best is what's effective regardless of origin
o Takes more work than ethnocentric and polycentric
o Much greater potential payoff because you are using most effective available technique
parochialism
...
tariffs
· customs duty, or tax, levied mainly on imports
import quotas
- limits on the number of a product that can be imported
embargos
· - complete bans on trade between one country and another
sanctions
a trade prohibition on certain types of products or services for a specific reason
global outsourcing
· also called offshoring: using suppliers outside the US to provide labor, goods, or services.
o Countertrend is "reshoring"
importing
a company buys goods outside the country resells them domestically
exporting
a company produces foods domestically and sells them outside the country
countertrading
bartering goods for goods
licensing
- a company allows a foreign company to pay it a fee to make or distribute the firms product or service
franchising
a company allows a foreign company to pay it a fee and a share of the profits in return for using the companys brand name and a package of material and services
joint ventures
· formed with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign country
o Aka "strategic alliance"
dumping
...
organizations promoting international trade
World Trade Organization, World Bank, International Monetary Fund
The world bank
o Founded to help european countries rebuild after WWII - 189 members
o USA, UK, Japan & German biggest funders
o Low-interest loans to developing nations for improving transportation, education, health, and telecommunications
the international monetary fund (IMF)
o Smooths flow of money between nations
o Founded in 1945; affiliated with the UN
o Operates as last-resort lender that makes short-term loans to countries suffering from unfavorable balance of payments
· Ex. Greece
world trade organization (WTO)
o Monitors and enforces trade agreements
o Headquartered in geneva; 164 members
o Based upon GATT; first signed in 1947
exchange rate
· Exchange rates are the rate of currency of one area or country that can be exchanged for the currency of another area or country
planning
o Defined as setting goals and deciding how to achieve them
o Planning is coping with uncertainty by formulating future courses of action to achieve specified results
plan
a document that outlines how goals are going to be met
strategic plan
o A large scale action plan that sets the long term goals and direction for an organization
o 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
o Strategic plans typically revisited every year due to everchanging business conditions
strategic management
o A process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals
· Top management (strategic planning)
· Middle manager (tactical planning)
· Line managers (operational planning)
o Derives from an organizations mission and vision
mission statement
o Express the purspose of the organization
· What is our reason for being?
· Why are we here?
vision statement
o A 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 statement
o What 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 emphasize?
strategic planning
...
tactical planning
...
operational planning
...
SMART goal
· Specific: goals should be stated in specific rather than vague terms
· Measurable: whenever possible, goals should be measurable or quantifiable
· Attainable: goals should be challenging, of course, but above all they should be realistic and attainable
· Results-oriented: only a few goals should be chosen-- and they should be results-oriented -- they should support the organizations vision
· Target dates: goals should specify the target dates or deadline dates when they are to be obtained
management by objective (MBO)
· Managers and employees jointly set objectives for the employee
· Managers develop action plans
· Managers and employees periodically review the employees performance
· Managers make a performance appraisal and reward the employee according to results
performance objectives
· express the objective as an outcome or end-result
o Ex. "increase sport utility sales by 10%"
o Ex. "Reduce food spoilage by 15%"
behavioral objectives
· express the objective as the behaviors needed to achieve an outcome
o Ex. "greet all potential automobile customers with a smile and offer them to assist"
learning objectives
· express the objective inn terms of aquiring knowledge or competencies
o Ex. "attend sales training class"
the planning/control cycle
(figure 5.5)
porters strategic positioning
o Attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company
"performing different activities from rivals, or performing similar activities I different ways
Three key principles underlie strategic positioning
o Strategy is the creation of a unique and valuable position
· Few needs, many customers
§ Jiffy lube - oil change
· Broad needs, few customers
§ Services for the VERY wealthy
· Broad needs, many customers
o Strategy requires trade offs in competing
o Strategy involves creating a "fit" among activities
5 steps in the strategic management process
1. Establish the mission and the vision
2. Assess the current reality
3. Formulate corporate, business, and functional strategies
4. execute the strategies
5. maintain strategic control
SWOT analysis
· Environmental scanning - monitoring of an organizations internal and external environments to detect early signs of opportunities and threats that may influence a firms plans
§ SWOT process for scanning
· Internal STRENGTHS
· Internal WEAKNESS
· External OPPORTUNITIES
· External THREATS
3 types of corporate strategies
growth strategy, stability, defensive
growth strategy
...
stability
...
defensive
...
the BCG matrix
stars- have high growth, high market share - definite keepers
cash cows - have slow growth but high market share - income finances starts 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 of
porters 5 competitive forces
· Porter contends that business - level strategies originate in five primary compeitive forces in the firms environment
§ Threat of new entrants
§ Bargaining power of suppliers
§ Bargaining power of buyers
§ Threats of substitute products or services
§ Rivalry among competitors
Porter's 4 competitive strategies
1. cost-leadership
2. differentiation
3. cost-focus
4. focused-differentiation
cost-leadership strategy
Keep the costs, and hence prices, of a product or service below those of competitors and target a wide market
differentiation strategy
Offer products that are unique and superior value compared to those of competitors and target a wide market
cost-focus strategy
Keep the costs of a product below those of competitors and target a narrow market
focused-differentiation strategy
Offer products that are of unique and superior value compared to those of competitors and target a narrow market
three core processes of business
people, strategy, operations
people
...
strategy
...
operations
...
Four stages in rational decision making
· Identify the problem or opportunity
· Think up alternative solutions
· Evaluate alternatives and select a solution
· Implement and evaluate the solution chosen
Nonrational Decision Making
satisficing, bounded rationality, intuition
satisficing model
· Because of constraints, managers do not make an exhaustive search for the best alternative
· Instead, managers seek alternatives until they find one that is satisfactory, not optimal
bounded rationality
· Developed in the 1950s by economist Herbert Simon
· Suggests that the ability of decision makers to be rational is limited by numerous constraints
o Complexity, time and money, cognitive capability
intuition
making a choice without the use of conscious thought or logical inference
· Steps from both:
o Expertise: a person's explicit and tacit knowledge about a person, a situation, an object, or a decision opportunity - is known as a holistic bunch
o Automated experience: the involuntary emotional response to those same matters
7 principles of evidence based decision making
· Treat your organization as an unfinished prototype
· Don't brag, just use facts
· See yourself and your organization as outsiders do
· Evidence based management is not just for seniors executives
· Like everything else, you still need to sell it
· If all else fails, slow the spread of bad practice
· The best diagnostic question: what happens when people fail
directive decision making
...
analytical decision making
...
conceptual decision making
...
behavioral decision making
...
decision making bias: availability
uses readily avaliable info
decision making bias: represetativeness
generalize from a small sample
decision making bias: confirmation
discount data not supporting their view
decision making bias: sunk cost
project too costly to stop
decision making bias: anchoring and adjustment
decisions based upon initial figure
decision making bias: overconfidence
too self confident; lacking objectivity
decision making bias: hindsight
events not that predictable
decision making bias: framing
how a problem is presented
decision making bias: escalation of commitment
increase commitment despite negative information
groupthink
...
consensus
occurs when members are able to express their opinions and reach agreement to support the final decision
brainstorming
technique used to help groups generate multiple ideas and alternatives for solving problems
devils advocacy
· Assigns someone the role of critic
· Uncovers and airs all possible objectives
dialectic method
· Identify a truth, a thesis
· Explore opposite positions, or antithesis
· Structured dialogue or debate
post mortems
Review of recent decisions to identify possible future improvements
· Evaluate after the fact
· What could have been done better? Differently?
· Record insights for future decision making
6 rules for effective brainstorming
o Defer judgment
o Build on the ideas of others
o Encourage wild ideas
o Go for quantity over quality
o Be visual
o One conversation at a time
organizational culture
the set of shared, taken for granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments
organizational structure
a formal system of task and reporting relationships that coordinates and motivates an organizations members so that they can work together to achieve the organizations goals
· Concerned with WHO reports to WHOM and WHO specializes in WHAT work
three levels of organizational culture
observable artifacts, espoused values, basic assumptions
observable artifact
physical manifestations of culture
espoused values
explicitly stated values and norms preferred by an organization
basic assumptions
core values of the organization
the competing values framework
Clan, Adhocracy, Hierarchy, Market
* know axis
clan culture
thrust: collaborate
means: cohesion, participation, communication, empowerment
ends: morale, people, development, commitment
adhocracy culture
thrust: create
means: adaptability, creativity, agility
ends: innovation, growth, cutting-edge output
market culture
thrust: compete
means: customer focus, productivity, enhancing competitiveness
ends: market share, profitability, goal achievement
hierarchy culture
thrust: control
means: capable processes, consistency, process control, measurement
ends: efficiency, timliness, smooth, functioning
how employees learn culture
symbols, stories, heroes, rites and rituals, and organizational socialization
symbols
· an object, an act, a quality, or event that conveys meaning to others
stories
· narrative based on true events repeated - and sometimes embellished on - to emphasize a particular value
hereos
person who accomplishments embody the values of the organization
rites and rituals
· activities and ceremonies that celebrate important occasions and accomplishment
organizational socialization
· the process by which people learn the values, norms, and required behaviors of an organization.
4 common elements of organizations
according to edgar schein
1. common purpose
2. coordinated effort
3. division of labor
4. hierarchy of authority
common purpose
· gives everyone an understanding of the organizations reason for being
coordinated effort
the coordination of individual effort into group-wide effort
division of labor
· : having discrete parts of a task done by different people
hierarchy of authority
· making sure the right people do the right things at the right time (unity of command). Flat Organization has few in any middle managers
span of control
the number of people reporting directly to a given manager, narrow or wide.
responsibility
...
authority
· accountability, responsibility, and delegation; line versus staff positions
delegation
...
centralized
versus decentralized authority: who makes decisions, upper management or middle.
decentralized
...
functional organizational structure
· People with similar occupational specialties are put together in formal groups
divisional organizational structure
· People with diverse occupational specialties are put together in formal groups by similar products, customers, or geographic regions
matrix organizational structure
· Combines functional and divisional chains of command in a grid so that there are two command structures: vertical and horizontal
horizontal organizational structure
· Teams or workgroups, either temporary or permanent, are used to improve collaboration and work on shared tasks by breaking down internal boundaries
human resource management
consists of the activity's managers perform to plan for, attract, develop, and retain an effective workforce
HR strategic planning
· consists of developing a systematic, comprehensive strategy for:
o Understanding current employee needs
o Predicting future employee needs
job analysis
determining the basic elements of a job by observation and analysis
job description
· summarizes what the holder of the job does and how and why he or she does it
job specification
· describes the minimum qualifications a person must have to perform a job successfully
Performance Management
set of processes and managerial behaviors that involve defining, monitoring, measuring, evaluating, and providing consequences for performance expectations
objective appraisals
· based on fact and often numerical
· measures desired results
· harder to challenge legally: reduce personal bias
subjective appraisal
· based on managers perceptions of an employee's traits and behaviors
· trait appraisals are easy to create and use, but validity is questionable
· behavioral appraisals measure specific, observable aspects of performance
· one type is behaviorally anchored rating scale (BARS)
o rate employee gradations in performance according to scales of specific behaviors
360-degree feedback
a performance appraisal process in which feedback is obtained from the boss, subordinates, peers and coworkers, and the employees themselves
NLRB
...
collective bargaining
...
fair labor standards act of 1938
...
sarbanes-oxley act -2003
prohibits employers from demoting or firing employees who raise accusations or fraud to a federal agency
civil rights act 1964
prohibits discrimination bases on race, color, religion, national origin, sex, or sexual orientation
family and medical leave act 1993
requires employers to provide 12 weeks of unpaid leave for medical and family reasons, including childbirth, adoption, or family emergency
ADA (Americans with Disabilities Act of 1990)
prohibits discrimination against essentially qualified employees with physical or mental disabilities or chronic illness; requires "reasonable accommodation" be provided so they can perform duties
Discimination
o people are hired or promoted - or denied hiring or promotion - for reasons not relevant to the job
adverse impact
o an organization uses an employment practice that results in unfavorable outcomes to a protected class
disparate treatment
o employees from protected groups are intentionally treated differently
affirmative action
· steps include:
o active recruitment from groups traditionally discriminated against
o elimination of prejudicial questions in interviews
o establishment of minority hiring goals
· importantly, EEO laws do not allow the use of hiring quotas
sexual harrassment
· consists of unwanted sexual attention that creates an adverse work environment
· violates Title VII of the 1964 Civil Rights act
· two types:
o quid pro quo: jeopardizes being hired or obtaining job benefits or opportunities unless he or she implicitly or explicitly acquiesces
o hostile environment: does not risk economic harm but experiences an offensive or intimidating work environment
bullying
· abusive physical, psychological, verbal, or nonverbal behavior that is threatening, humiliating, or intimidating
labor unions
organizations of employees formed to protect and advance their members interests by bargaining with management over job related issues
right to work laws
...
COLA
o this is a clause during the period of the contract that ties future wage increases to increases in the cost of living
givebacks
o the union agrees to give up previous wage or benefit gains in return for something else, such as a no-layoff policy
two-tier wage contracts
o new employees are paid less or receive lesser benefits than veteran employees
fundamental change - 5 supertrends shaping the future of business
1. The marketplace is becoming more segmented; more niche products
2. More competitors offering targeted products, requiring faster speed-to-market
3. Some traditional companies may not survive radically innovative change: disruptive innovation
4. China, india, Mexico, and other offshore suppliers are changing the way we work
5. Knowledge, not innovation, is becoming the new competitive advantage
proactive change
· involves making carefully thought-out changes in anticipation of possible or expected problems
reactive change
· making changes in response to problems or opportunities as they arise
forces of change outside the organization
demographic characteristics, technological advancements, shareholder, customer, and market changes, social and political pressures
forces of change inside the organization
human resource concerns, managers behavior
adaptive change
- least threatening
- reintroduction of a familiar practice
innovative change
somewhat threatening; introduction of a practice that is new to the organization
radically innovative change
very threatening; involves introducing a practice that is new to the industry
systems model of change
figure 10.3
inputs of change
"why should we change, and how willing and able are we to change?
- mission statement
-vision statement
-strategic plan
-analysis of the organizations readiness for change
target elements of change
"which levers can we pull that will produce the change we want?"
1. people -knowledge, ability, attitudes, motivation, behavior
2. organizational arrangments - policies, procedures, roles, structures, rewards, physical setting
3. methods - processes, workflow, job design, technology
4. social factors - organizational culture, group processes, interpersonal interactions, communication, leadership
organizational development (OD) uses
1. Managing conflict: an OD expert "executive coach" can help advise on how to improve relationships within the organization
2. Revitalizing organizations: OD experts can help by opening communication fostering innovation, and dealing with stress
3. Adapting to mergers: OD experts can help integrate two firms with varying cultures products, and procedures
change agents
...
approaches to innovation
figure 10.5
product innovation
change in the appearance or performance of a product or the creation of a new one
process innovation
· change in the way a product is conceived, manufactured, or disseminated
crowdsourcing
...
big 5 personality traits
extroversion, agreeableness, emotionalism, conscientiousness, openness to experience
core self evaluation
represents a broad personality trait compromising four positive individual traits
1. Self - efficacy
2. Self - esteem
3. Locus of control
4. Emotional stability
self-efficacy
Belief in one's ability to do a task
self esteem
o The extent to which people like or dislike themselves
o High self-esteem: more apt to handle failure better, emphasize the positive and take more risks
o Low self-esteem: tend to focus more on one's weaknesses, may be dependent on others
internal locus of control
you believe you control your own destiny
external locus of control
you believe external forces control you
emotional stability
o The extent to which people feel secure and unworried and to which they are likely to experience negative emotions under pressure
o Low levels are prone to anxiety and tend to view the world negatively
High levels tend to show better job performance
emotional intelligence
o Ability to monitor your and others' feelings and use this information to guide your thinking and actions
o First introduced in 1909, some claim it to be the "secret elixir" to happiness and higher performance
3 components of attitude
affective, cognitive, behavioral
affective component of attitude
"I feel" consists of the feelings or emotions one has about a situation
cognitive component of attitude
"I believe" consists of the beliefs and knowledge one has about a situation
behavior component of attitude
"I intend." how one expects or intends to behave about a situation
stereotyping
· tendency to attribute to an individual the characteristics one believes are typical of the group to which that individual belongs
implicit bias
o Attitudes or beliefs that affect our understanding, actions, and decisions in an unconscious manner
o "I really do not think I am biases, but I just have feelings about some people."
o Implicit bias affects employment-related decisions: a recent study showed that both racism and ageism has impacted hiring decisions
halo effect
o Forming an impression of an individual based on a single trait
o "one traits tells me all that I need to know."
recency effect
· tendency to remember recent information better than earlier information
casual attributes
inferring causes for observed behavior
fundamental attribution bias
· people attribute another person's behavior to his or her personal characteristics rather than to situational factors
self-serving bias
· people tend to take more personal responsibility for success than failure
diversity
o Represents all the ways people are unlike and alike - the differences and similarities in age, gender, race, religion, ethnicity, sexual orientation, capabilities, and socioeconomic background
the diversity wheel
figure 11.3
stress
o The tension people feel when they are facing or enduring extraordinary demands, constraints, or opportunities and are uncertain about their ability to handle them effectively
burnout
...
role overload
...
role conflict
...
role ambiguity
...
work-life conflict
· created when pressure or demands from work and family are not compatible
buffers
· that managers can make to reduce the stressors that lead to burnout:
o Build resilience
o Roll out employee assistance programs
o Recommend a holistic wellness approach
o Create a supportive environment
o Make jobs interesting
o Make career counseling available
Entrepreneur
· creates and runs business(es), while taking on financial risk to do so
Intrapreneur
· works inside an existing organization
· sees an opportunity for a product or service and mobilizes the organizations resources to realize the idea
differences between entrepreneur and self-employment
· entrepreneur:
o hire people to work with them. Employees work together as a team to accomplish the entrepreneur's vision
o global thinkers who take and manage risk
o delegate responsibilities
o broader set of legal requirements and insurance and tax considerations
o broader aspirations: influences industries, markets, and greater numbers of people
· self-employed:
o work for themselves and might hire others to work for them
o tend to stay in one area and prefer to avoid taking risks
o do much of the work themselves. Often, they are experts, as well as wanting to save costs
o can incorporate or file as sole proprietors
o narrower focus: operating a business in a specific area or market
4 ways entrepreneurs uncover new business ideas
1. Identify your passions, skills, and talents
2. Identify a problem or frustration
3. Identify an opportunity or an unmet need
4. Study customer complaints
types of entrepreneurial opportunities
...
Sole Proprietorship
a business owned and managed by a single individual
parternship
A form of business ownership in which the business is owned by two or more persons
corporation
A business owned by stockholders who share in its profits but are not personally responsible for its debts
S corporation
A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships
LLC's
Limited Liability Company - a hybrid form of business with limited liability for the owners with the advantage of not paying corporate income tax.
financing options
· Personal funding
· Family and friends
· Bank loans
· The small business association
· Venture capital
· Angel investors
· Crowd investing
venture capitalists
Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses.
angel investors
individuals who invest in start-up companies with high growth potential in exchange for a share of ownership
crowd investing
...
simple model for motivation
figure 12.2
intrinsic reward
· satisfaction a person receives from performing a particular task itself
extrinsic reward
payoff a person receives from other for performing a particular task
Maslow's Hierarchy of Needs
psychological - need for food, clothing, shelter, comfort, self-preservation (wages)
safety- need for physical safety, emotional security, avoidance of violence (health insurance, work safety rules)
love- need for love, friendship, affection (office parties, management retreats)
esteem- need for self-respect, status, reputation, recognition (awards, bonuses, promotions)
self actualization- need for self fulfillment: increasing competence, using abilities to the fullest (sabbatical leave)
McClelland's Acquired Needs Theory
· Needs theory: three needs are major motives determining people's behavior in the workplace
1. Achievement: desire to achieve excellence in challenging tasks
2. Affiliation: desire for friendly and warm relationships
3. Power: desire to influence or control others
Herzberg's Two-Factor Theory
o Proposed that work satisfaction and dissatisfaction arise from two different factors - work satisfaction from so-called motivating factors and work dissatisfaction from so-called hygiene factors
motivating factors
o associated with job satisfaction, which affects the job content or the rewards of work performance
hygiene factors
o associated with job dissatisfaction which affect the job context in which people work
equity/justice theory
o A model of motivation that explains how people strive for fairness and justice in social exchanges or give and take relationships
o Based on cognitive dissonance from chapter 11, the psychological discomfort people experience between their cognitive attitude and incompatible behavior
expectancy theory
o Suggests that people are motivated by two things:
1. How much they want something
2. How likely they think they are to get it
o Three elements of the expectancy theory
1. Expectancy: belief that a particular level of effort will lead to a particular level of performance
2. Instrumentality: expectation that successful performance of a task will lead to a desired outcome
3. Valence: the value a worker assigns to an outcome
expectancy
belief that a particular level of effort will lead to a particular level of performance
instrumentality
the expectation that successful performance of the task will lead to the outcome desired
valence
the value an outcome holds for the person contemplating it
job design
o Division of an organizations work among its employees
o The application of motivational theories to jobs to increase satisfaction and performance
· Two techniques
o Fitting people to jobs (scientific management)
o Fitting jobs to people (enlargement or enrichment)
job enlargement
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job enrichment
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positive reinforcement
· use of positive consequences to strengthen a particular behavior
negative reinforcement
strengthening a behavior by withdrawing something negative
extinction
· weakening behavior by ignoring it or making sure it is not reinforced
punishment
· weakening behavior by presenting something negative or withdrawing something positive
Popular Incentive Compensation Plans
· Pay for performance
o Piece rate
o Sales commission
· Bonuses
· Profit-sharing
· Gainsharing
· Stock options
· Pay for knowledge
work team
· have a clear purpose that all members share, usually permanent, and members must give their complete commitment to the teams purpose in order for the team to succeed
project team
· assembled to solve a particular problem or complete a specific task, such as brainstorming new market ideas for one of the company's products
virtual team
· work together over time and distance via electronic media to combine efforts and achieve common goals
self-managed team
· groups of workers who are given administrative oversight for their task domains
cross-functional team
include members from different areas within an organization, such as finance, operations, and sales
tuckmans 5 stage model for group & team development
Stage 1: forming
· Forming
o Process of getting oriented and getting acquainted
o "why are we here?"
o "Where do I fit in here?"
· in this stage, leaders focusing on giving people time to become acquainted and socialize

stage 2: storming
· storming
o characterized by the emergence of individual personalities and roles and conflicts within the group
o "what's my role here?"
o "why are we fighting over who's in charge and who does what?"
· In this stage, leaders should encourage members to suggest ideas, voice disagreements, and work through conflicts about tasks and goals

stage 3: norming
· Norming
o Conflicts are resolved, close relationships develop, and unity and harmony emerge
o "what do the others expect me to do?"
o "can we agree on goals and work as a team?"
o Group cohesiveness is the principal by product of "norming"
· In this stage, leaders should emphasize unity and help identify team goals and values

Stage 4: performing
· Performing
o Members should concentrate on solving problems and completing the assigned tasks
o "how can I best perform my role?"
o "can we do the job properly?"
· In this stage, leaders should allow members the empowerment they need to work on tasks

Stage 5: adjourning
· Adjourning
o Members prepare for disbandment
o "What is next?"
o "can we help team members transition out?"
· Leaders can help ease the transition by rituals celebrating "the end" and "new beginnings"
8 essential considerations in building effective teams
o Collaboration
o Trust
o Performance
o Motivation
o Composition
o Roles
o Norms
o Effective team processes
task role
· consists of behavior that concentrates on getting the team's tasks done
o initiator, information seeker, opinion giver, elaborator, coordinator, evaluator, recorder
maintenace roles
· consists of behavior that fosters constructive relationships among team members
o encourager, harmonizer, compromiser, standard setter, follower
dysfunctional conflict
· hinders the organizations performance or threatens its interest
functional conflict
· benefits the main purposes of the organization and serves its interests
relationship between conflict intensity and performance outcome
personality conflict
o Interpersonal opposition based on personal dislike, disagreement, or differing styles
o Personality clashes, competition for scarce resources, time pressure, communication failures
intergroup conflict
o Inconsistent goals, ambiguous jurisdictions (when boundaries are unclear), and status differences
o "we versus them"
multicultural conflict
o Frequent opportunities for clashes between cultures in the global economy
programmed conflict
· designed to elicit different opinions without inciting peoples personal feelings
avoiding
· ignoring or suppressing a conflict
o "maybe the problem will go away"
obliging
· allows the desires of the other party to prevail
o "lets do it your way"
dominating/forcing
· : ordering an outcome, using formal authority and power to resolve a conflict
o "you have to do it my way"
compromising
· both parties give up something to gain something
"lets split the difference
integrating/collaborating
· manager strives to confront the issue and cooperatively identify the problem and seek a solution
o "lets reach a win-win situation that benefits both of us"
legitimate power
· results from managers formal positions within the organization
reward power
results from managers authority to reward their subordinates
coercive power
· results from managers authority to punish their subordinates
expert power
· results from ones specialized information or expertise
referent power
derived from ones personal attraction (Strong, visionary leadership)
rational persuasion
o convince with reason, logic, or facts
§ ex. Ford CEO allan mullally: encouraged open and honest discussion and collabroation
inspirational appeals
o building enthusiasm appealing to others emotions/ideals/values
§ ex. Steve jobs: customers fulfilling their dreams - not just buying products
consultation
o others participating in planning, decision making, and changes
§ ex. Nike CEO mark parker seeks ideas across nike even junior managers
ingratiating tactics
o getting people in a good mood before the ask
§ ex. Using praise, flattery, or humor - "brown nosing"
personal appeals
o - leveraging friendship and loyalty when requesting
§ ex. Making a personal appeal for donations, clothing or money for a cause
exchange tactics
o making explicit or implied promises and trading favors
§ ex. Must avoid favoritism and coercion
coalition tactics
o getting others to support efforts to persuade someone
§ ex. Senator corey bookers coalition in leadership in Newark economic revival
pressure tactics
o demanding compliance - using intimidation or threats
§ ex. Chinese philosopher lao- tzu leaders despised and defied
legitimating tactics
o - requests based on authority, rules, policies, or implied support of superiors
Hard Influence Tactics
Exchange tactics
Coalition tactics
Pressure tactics
Legitimating tactics
Soft Influence Tactics
rational persuasion, inspirational appeals, consultation, ingratiation, personal appeals
trait approach to leadership
· Trait approaches to leadership attempt to identify distinctive characteristics that account for the effectiveness that account for the effectiveness of leaders
male v. female leadership traits
· Men displayed more task leadership and women more relationship leadership
· Women used more democratic or participative style then men, and men use a more autocratic and directive style
· Female leadership was associated with more cohesion, cooperative learning, and participative communication among team members
· Peers, managers, direct reports, and trained observers rated women executives as more effective than men. Men rated themselves as more effective than women evaluated themselves
· One study found that almost no differences between men and women in their levels of hard or soft skills
consideration leadership
o Leader behavior that is concerned with group members neneds and desires and that is directed at creating mutual respect or trust
empowering leadership
o Represents the extent to which a leader creates perceptions of psychological empowerment in others
ethical leadership
o Represents normatively appropriate behavior that focuses on being a moral role model
o includes communicating ethical values to others, rewarding ethical behavior, and treating followers with care and concern
servant leadership
· servant leadership focuses on providing increased service to others - meeting the goals of both followers and the organization - rather than to oneself
fiedlers contingency model of leadership
· determining if a leaders style is (1) task oriented or (2) relationship oriented and if that style is effective for the situation at hand
· uses the least preferred coworker (LPC) scale, in which workers rank the coworker they least enjoyed working with and rate him or her: friendly/unfriendly, tense/relaxed, efficient/inefficient
· the higher the score, the more relationship oriented; the lower the score, the more task oriented
leader-member relations
reflects the extent to which the leader has the support, loyalty, and trust of the work group
three dimensions of situational control
leader-member relations, task structure, position power
task structure
· the extent to which tasks are routine and easily understood
position power
refers to how much power a leader has to make work assignments and reward and punish
house path-goal theory
· the effective leader increases employees' motivation by clarifying the paths, or behavior, that will help them achieve goals, and provides them with support
· two contingency factors, or variables - employee characteristics and environmental factors - cause some leadership behaviors to be more effective than others
employee characteristics
locus of control, task ability, need for achievement, experience, and need for path-goal clarity
environmental factors
task structure and work group dynamics
communication
o is the transfer of information and understanding from one person to another
efficient communicator
when you transmit your message accurately in the least amount of time
effective communicator
your intended message is accurately understood by the other person
the communication process
figure 15.1
high media richness
face-to-face, best for non-routine, ambiguous situations
low media richness
(impersonal written) - best for routine, clear-cut situations
formal communication channels
o Follow the chain of command
o Recognized as official
organizational chart
The visual representation of an organization's structure
vertical communication channnel
up and down the chain of command
horizontal communication channel
flows within and between units
external communication channel
outside the organization
5 personal barriers that hinder communication
· Variable skills in communicating effectively
· Variations in the way we process and interpret information
· Variations in trustworthiness and credibility
· Oversized egos, our pride, self esteem, arrogance
· Faulty listening skills; (mindlessness)
· Tendency to judge others messages
· Generational differences
social media benefits for employers
connect in real time over distance, collaborate within and outside the organization, expand boundaries
cyberthreat
o A system of safeguards should be put in place for protecting information technology against disasters, system failures, and unauthorized access that result in damage or lost
o In 2017 the cost per cybercrime victim shot up $142, with the total cost of those crimes amounting to $139 billion
cyberloafing
o A primary concern for employers in their adoption of social media is employees accessing the internet at work for personal use
o Some studies put the cost of Cyberloafing at $85 billion per year in the US
o Software tools can reduce Cyberloafing, limiting access or length of time used, or both
identity theft
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active listening
o Actively decoding and interpreting verbal messages
o Typically retain only 20 to 50 percent of what we hear
· Typical listening styles:
o Active: "I am fully invested"
o Involved: "I am partially invested"
o Passive: "It is not my responsibility to listen"
o Detached: "im uninterested"
4 tips for effective writing
· start with your purpose: why are you emailing or writing to them?
· Write simply, concisely, and directly: short and sweet is key
· Know your audience: resist the urge to include everyone, and think before you "reply all"
· Don't show ignorance of the basics: proofread!
· Show respect: use "hello" instead of "hey!"; check spelling of names and titles
dale carnegies 3 tips for effective speaking
· Tell them what you are going to say
· Say it
· Tell them what you said
controlling
· : defined as monitoring performance, comparing it with goals, and taking corrective action as needed
steps in the control process
1. planning - you set goals and decide how to achieve them
2. organizing - you arrange task, people annd other resources to accomplish the work
3. leading - you motivate people to work hard and achieve the goals
4. controlling - you monitor performance and compare it to goals and take action as needed
strategic control
· monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed
tactical control
· monitoring performance to ensure that tactical plans - those at the divisional or departmental level - are being implemented
operational control
monitoring performance to ensure that operating plans - day to day goals - are being implemented and then taking corrective action as needed
physical control
o Buildings, equipment, tangible products
HR control
o Monitoring employees; personality, drug and performance tests, performance evaluations and employee surveys
informational control
o Production schedules, sales forecasts, competitive analysis, public relations briefings, etc.
financial control
o Bills being paid on time; $$$'s owed by customers, $$$'s owed to suppliers, cash for payroll, debt repayment schedules, etc.
structural control
o Bureaucratic: rules, regulations and formal authority driven
o Decentralized: informal and organic structural arrangements; flat organizational structures
cultural control
o Uses set of norms from values and beliefs to influence work processes and performance
§ Ex. Innovation in startups
the balanced scoreboard
· gives top managers a fast but comprehensive view of the organization via four indicators
o customer satisfaction
o internal processes
o innovation and improvement activities
o financial measures
incremental budget
o Allocates increased or decreased funds to a department by using the last budget period as a reference point
o Only incremental changes in the budget request are reviewed
fixed budget
· allocates resources on the basis of a single estimate of costs
variable budget
· allows the allocation of resources to vary in proportion with various levels of activity
demings 4 principles to improve quality
1) Quality should be aimed at the needs of the consumer
2) Companies should aim at improving the system, not blaming workers
3) Improved quality leads to increased market share, increased company prospects, and increased employment
4) Quality can be improved on the basis of hard data, using the PDCA cycle
PDCA cycle
1. PLAN desired and important changes, based on observed data. Make pilot test, if necessary. 2. DO implement the change or make a small-scale test. 3. CHECK or observe what happened after the change or during the test. 4. ACT on lessons learned, after study of results. Determine if predictions can be made as basis for new methods
TQM
· a comprehensive approach - led by top management and supported throughout the organization - dedicated to continuous quality improvement, training, and customer satisfaction
core principles of TQM
o People orientation - everyone involved in the organization should focus on delivering value to customer
§ Delivering customer value is most important
§ People will focus on quality if they feel empowered
§ TQM requires team work, training, and cross-functional efforts
o Improvement orientation - everyone should work on continuously improving work processes
§ Continuous improvement: the ongoing, small incremental improvements inn all parts of an organization - all products, functional areas and work processes
§ Its less expensive to do right the first time
§ Its better to do small improvements all the time
§ Accurate standards must be followed to eliminate small variations
§ There must be strong commitment from top management
statistical process control
· periodic random samples to insure quality in standard range
six sigma
· <3.4 defects per million products or procedure; reduce errors to the vanishing point
ISO 9000
QC procedures company's install that can be audited by independent quality control experts
ISO 14000
· extends ISO 9000 to include environmental performance
Enterprise resource planning (ERP)
· software systems and information systems for integrating virtually all aspects of a business, helping managers stay on top of the latest developments
benchmarking
a way to measure something against a standard, the benchmark
best practices
a set of guidelines, ethics, or ideas that represent the most efficient or prudent course of action
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