What is the significance of efficiency and effectiveness in business and how do they impact performance?
Click the card to flip 👆
1 / 90
Terms in this set (90)
-Efficiency: A measure of how well or productively resources are used to achieve a goal
-Effectiveness: A measure of the appropriateness of the goals in an organization is pursuing and the degree to which the organization achieves those goals.
-Organizational Performance: A measure of how efficiently and effectively managers use organizational resources to satisfy customers and achieve organizational goals.
-The more effective and efficient use an organization can make of resources, the greater the relative well-being of people.
1.) Planning: Choose appropriate goals and courses of action. Process of identifying and selecting appropriate goals and courses of action
a. Deciding which goals to pursue
b. Deciding what strategies to adopt and attain those goals
c. Deciding how to allocate organizational resources
2.) Organizing: Establish task and authority relationships. Structuring working relationships in a way that allows organizational members to work together to achieve organizational goals. Resources to achieve goals.
3.) Leading: Motivate, coordinate, and energize individuals
4.) Controlling: Establish accurate measuring and monitoring systems to evaluate how well the organization has met its goals.
-Management: The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently.
-Managers: The people responsible for supervising the use of an organization's resources to meet its goals. Resources include people, skills, know-how, machinery, raw materials, computer and IT, and financial capital.
-Organizations: Collections of people who work together and coordinate their actions to achieve a wide variety of goals.
strategy: cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals
goals and strategy are both part of the planning process:
deciding which goals to pursue - define the business, establish major goals
deciding what strategies to adopt to attain to those goals - analyze current situation and develop strategies
deciding how to allocate organizational resources - implementing strategy - allocate resources and responsibilities to achieve strategies
Defining the Business:
who are our customers?
what customer needs are being satisfied?
how are we satisfying customer needs?
Establishing Major Goals
provides the organization with a sense of direction
stretches the organization to higher levels of performance
goals must be challenging but realistic with a definite period in which they are to be achieved
SWOT: A planning exercise in which managers identify internal organizational strengths and weaknesses, external opportunities, and threats.
-Organizational strengths and weaknesses
-Strengths (e.g., superior marketing skills)
-Weaknesses (e.g., outdated production facilities)
-External opportunities and threats
-Opportunities (e.g., entry into new related markets
-Threats (increased competition)
1.) Mission Statement: A broad declaration of an organization's purpose that identifies the organization's products and customers and distinguishes the organization from its competitors.
a. Functional Level: Executes Tasks
b. Functional Area: Different areas that are support functions (marketing, finance, etc...)
c. Time Horizons of plans: The intended duration of a plan
i. Long-term: 5 years or more
ii. Intermediate-term: 1-5 years (Corporate and business-level goals and strategies.) (Also functional plans)
iii. "Short" term: 1 year
d. Defining the business
i. Who are our customers?
ii. What costumer needs are being satisfied?
iii. How are we satisfying our customer needs?
e. Alignment: Goals must align with mission of company.
2.) Planning: Identifying and selecting appropriate goals and courses of action for an organization
3.) Strategy: A cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals.
What is the five forces model? Can you analyze the competitive forces of an industry (e.g., the airline industry)?1.) Level of Rivalry: Degree of competition for customers tends to drive down profits - good example are the overabundance of restaurants in Boulder. Competition leads to lowering of prices and more advertising. Just look in a supermarket for this. Level of rivalry is high in the t shirt business, in the car business, in the supermarket business. (Restaurants (most cut costs, etc...)_ 2.) Potential for Entry: When a company can easily enter a market. For example, Starbucks has threat of entry coffee shops that want to enter this market. They need to continuously innovate to remain competitive. Barriers to entry are advantages that incumbents may have relative to newcomers. -Barriers to entry: supply-side economy of scale, capital requirements to enter the market (pharmaceuticals), government policy restricts entry (taxi, liquor). 3.) Power of suppliers: if there are only a few large suppliers, they can drive up the prices. For example, when Microsoft had a near monopoly on operating systems, they would cut profitability out of PC sellers. Labor unions can control the supply of labor, and increase labor costs. (Microsoft and up prices for Dell). 4.) Power of Buyers: Big, powerful buyers or buyers group can bargain prices down particularly when they buy in volume. The Federal government buys weapons. They can bargain the prices down. Big box stores, like Walmart, buy a lot and have significant buying power. (Walmart: only customers for many products) 5.) Threat of Substitutes: performs the same or a similar function as an industry's product by a different means. Videoconferencing is a substitute for travel, plastic is a substitute for aluminum. Substitutes are always present but they are easy to overlook because they may appear to be very different from the industry's product. (Hyatt vs. Air B&B)Example: Airline Industry-Focus on airline industry anaylsis: Bad/worst industry to be in. None of the factors are benign. - Suppliers are powerful (According to Porter)- Gates, aircraft, GE, Airbus makes a lot more money. Labor is unionized - Buyers: Buy cheapest ticket. Price sensitive -Threat of entry: low barriers to entry, you can rent a plane, lease a gate -Rivalry: Intense and on price - Substitutes: Use a car or train, much less expensive - Cost Leadership: Walmart - Differentiation: Coke/McGuckin's -Focus Low-cost: Papa Murphy's - Focuses differentiation: Whole Foods Example: Movie Theater Industry: - Bargaining Power of Supplier: A problem as movie distributors and producers control the flow - Threat of Substitue products or services: Very high with videos, Amazon movies, Netflix - Soft Drinks: All forces are benign.What are the business level strategies? What actions do they suggest you take?· Low cost: drive down costs in comparison with rivals. Usually this can occur in production or manufacturing. Economies of scale are used...margins are low, but sales are high. Walmart, Southwest airlines. · Differentiation strategy: Being different on a dimension that is important to customers: for example product design, quality, after-sales service and support. Think about McGuckins versus Home Depot. McGuckins is higher priced, but differentiates itself with service. Also Nike, Morton salt, Disneyworld. , FedEx. · Focused low-cost strategy: going after one customer segment and offering a low cost product. Papa Murphys: targets low incomes families. Pizza is baked at home allowing it to accept food stamps. Keeps costs low.What does it mean to be "stuck in the middle"?Attempting to simultaneously pursue both a low cost strategy and a differentiation strategy -Difficult to achieve low cost with the added costs of differentiation.What is the difference between a programmed and an un-programmed decision? Why is the distinction significant?Programmed Decision: Routine, virtually automatic decision making that follows established rules or guidelines - Managers have made the same decision many times before - There are rules or guidelines to follow based on experience with past decisions - Little ambiguity involved. Unprogrammed Decision: Non-routine decision making that occurs in response to unusual, unpredictable opportunities and threats -Intuition: Often used in response to nonprogrammed decisions -Reasoned judgments: Well thought out decision that requires careful information gathering, generation of alternatives, and evaluation of alternatives. -In non-programmed decisions, you have more chance of error whether you are using judgment or the unconscious.What is decision fatigue and how does it impact decision making? How can you limit the effects of decision fatigue?decision fatigue helps explain why ordinary, sensible people get angry at colleagues and families, splurge on clothes, buy junk food, etc. no matter how rational and high minded one may try to be, one can't make a decision without paying a biological price the more choice you make throughout the day, the harder each one becomes for your brain, and eventually, it looks for shortcuts decision fatigue: refers to the idea that people tend to make worse decisions after having made a lot of decisions. if you "flex" your decision muscle too much, it will fail you.What is stack ranking? Why did stack ranking persist at Microsoft even though it had negative impact on efficiency and effectiveness?**stack ranking: is an employee evaluation method that slots a certain percentage of employees into each of several levels of performanceWhat are the two ways we make decisions? When should we rely on one type of decision making style over the other?Intuition: feelings, beliefs, and hunches that come readily to mind, require little effort and information gathering and result in on-the-spot decisions often used in response to non-programmed decisions Judgment: decisions that take time and effort to make from careful information gathering, generation of alternatives, and evaluation of alternativesWhat is the administrative model of decision making, why was it developed, and how is it useful?Administrative: An approach to decision-making that explains why decision making is inherently uncertain and risky and why managers usually make satisfactory rather than optimum decisions Bounded rationality, incomplete informationWhat is the significance of each step of the decision making model? How does each step enhance decision making?Classical Model: list all alternative courses of actions and consequences, rank alternatives, and select the best alternative assumes that all information is known and mental capacity is infinite Administrative Model: bounded rationality - cognitive limitations constrain ability to interpret, process, and make decisions. incomplete information - uncertainty, ambiguous information, time constraints satisficing - choose an acceptable response rather than the best decision decision making model: step 1: recognize the need for a decision - sparked by an event such as environment changes may also be proactive managers must first realize that a decision must be made step 2: generate alternatives - managers must develop feasible alternative courses of action if good alternatives are missed, the resulting decision is poor it is hard to develop creative alternatives, so managers need to look for new ideas step 3: assess alternatives - what are the advantages and disadvantages of each alternative? managers should specify criteria, then evaluate general criteria for evaluating possible courses of action: legal ethical economical practical step 4: choose among alternatives - rank the various alternatives and make a decision tendency is for managers to ignore critical information, even when available step 5: implement the chosen alternative - managers must now carry out the alternative often a decision is made and not implemented step 6: learn from feedback - compare what happened to what was expected to happen explore why any expectations for the decision were not met derive guidelines that will help in future decision makingWhat are the advantages and disadvantages of team decision making? What methods can be used to overcome the disadvantages?**the performance of a team is better than the simple, arithmetic average of the group teams also perform better than the best team member (for demonstrable tasks) however, groups are also more overconfident than individuals methods to overcome disadvantages: watch out for groupthink (members strive for agreement among themselves at the expense of accurately assessing information relevant to a decision) devils advocacy (critical analysis of a perfreerd alternative, made in response to challenges raise by a group member who, playing the role of devil's advocate, defends unpopular or opposing alternatives for the sake of the argument) → decsion makers can be made aware of the possible dangers of recommended courses of action diversity among decision makers: another way to improve group decision making is to promote diversity in decision-making groups. → broadens the range of life experiences and opinions that group members can draw on as they generate, assess, and choose among alternatives → diverse groups are sometimes less prone to groupthink because group members already differ from each other and thus are less subject to pressures for uniformityHow does a no-tipping policy impact job satisfaction attitudes? What are the pros and cons of such a policy?Would a no tipping policy lead to server job satisfaction? Yes, because they are guaranteed a decent amount of money. They might not get as rewarded for having really greate nights, but they won't ever suffer from having bad nights.Why is job satisfaction an important attitude to measure? What are the general trends in job satisfaction?-A collection of feelings and beliefs that managers have about their current jobs. -Managers high on job satisfaction like their jobs, feel that they are being fairly treated, adn believe that their jobs have many desirable features. -Causes of job satisfaction: Work itself- skill variety, task identity, task significance, job feedback, autonomy How you feel about work: is it meaningful, do you have responsibility, can you see knowledge of results Pay- not correlated after individual reaches a level of comfortable living.Job enrichment theoryJob enrichment theory Skill Variety: The degree to which a job requires various activities, requiring the worker to develop a variety of skills and talents. Jobholders can experience more meaningfulness in jobs that require several different skills and abilities than when the jobs are elementary and routine.[2] Task Identity: The degree to which the job requires the jobholders to identify and complete a workpiece with a visible outcome. Workers experience more meaningfulness in a job when they are involved in the entire process rather than just being responsible for a part of the work.[2] Task Significance: The degree to which the job impacts other people's life. The influence can be either in the immediate organization or in the external environment. Employees feel more meaningfulness in a job that substantially improves either psychological or physical well-being of others than a job that has limited impact on anyone else.[2] Autonomy: The degree to which the job provides the employee with significant freedom, independence, and discretion to plan out the work and determine the procedures in the job. For jobs with a high level of autonomy, the outcomes of the work depend on the workers' own efforts, initiatives, and decisions; rather than on the instructions from a manager or a manual of job procedures. In such cases, the jobholders experience greater personal responsibility for their own successes and failures at work.[2] Feedback: The degree to which the worker is provided with clear, specific, detailed, actionable information about the effectiveness of his or her job performance. When workers receive clear, actionable information about their work performance, they have better overall knowledge of the impact of their work activities, and what specific actions they need to take (if any) to improve their productivity.According to Oldham and Hackman's model, what are the sources of job satisfaction?skill variety, task variety, task significance + meaningfulness → work motivation autonomy + responsibility → growth satisfaction and general satisfaction feedback from job + knowledge of results → work effectivenessWhat do the different dimensions of the Myers Briggs Framework signify?Myer-Briggs Framework: Most widely used personality-assessment instrument in the world -Individuals are classified as extroverted or introverted (E or I), sensing or intuitive (S or N), thinking or feeling (T or F), and judging or perceiving (J or P). Classifications combined into 16 personality types (ex: INTJ or ESTJ)How do narcissists operate? What do studies suggest about identifying narcissistic traits on-line? Why might narcissistic traits be problematic at work?Personality trait reflecting grandiose and inflated self concept: Inflated views: power, intelligence, physical attractiveness Sense of uniqueness, entitlement Social relationships used to regulate self-esteem Use relationships to look popular or high status Tendency to create relationships-create initial good impression Do not create long-term relationships based on warmth, empathy, closeness Use relationships for self enhancementWhat is motivation, exactly?The psychological forces that determine the direction of a person's behavior in an organization, a person's level of effort, and a person's level of persistence. (Drive)What is the distinction between intrinsic and extrinsic motivation?Intrinsic Motivation: Behavior that is performed for its own sake Motivation occurs while engaging in the behavior. Example: Playing an instrument to get someone to smile and say I did a good job Extrinsic Motivation: Behavior that is performed to acquire material or social rewards or to avoid punishment The source of motivation is the consequence of the behavior Example: Playing an instrument for moneyDescribe the major needs theories in detail. How do they explain motivation? How can a manager use these approaches to improve performance?Need theories: Theories of motivation that focus on what needs people are trying to satisfy at work and what outcomes will satisfy those needs Basis premise is that people are motivated to obtain outcomes at work to satisfy their needs.Describe the major needs theories in detail: Maslow's Hierarchy of Needs-Maslow's Hierarchy of Needs: -Specifies that there are 5 human needs and that these needs are arranged in such a way that lower, more basic needs must be satisfied before higher-level needs become activated. Ranking of needs: 1.) Physiological needs 2.) Safety and Security needs Social needs Esteem needs Self-actualization. Using Maslow as a guide, what are the motivators of.... American women?: work-life balance Chinese women?: control own future French and Mexican women?: pride in themselves 47% of all women?: passionDescribe the major needs theories in detail: Herzberg's Motivation-Hygiene Theory:A need theory that distinguishes between motivator needs (related to the nature of the work itself) and hygiene needs (related to the physical and psychological context in which the work is performed) and proposes that motivator needs must be met for motivation and job satisfaction to be high.Describe the major needs theories in detail: McClelland's Needs for Achievement, Affiliation, and Power:-Need for achievement: A strong desire to perform challenging tasks well adn meet personal standards for excellence -Need for Affiliation: Extent to which an individual is concerned about establishing and maintaining good interpersonal relations, being liked, and having the people around him get along with each other. Need for Power: Extent to which an individual desires to control or influence others Personal Organization Power: Concentrates on obtaining and exercising power and authority Thinks about how to obtain power High need to win arguments, persuade others, and prevail Uncomfortable without powerDescribe the major needs theories in detail: McClelland:High achievers prefer jobs with personal responsibility, feedback and intermediate degree of risk. High achievers are not necessarily good managers Power closely related to managerial success Employees can be trained to stimulate their achievement need.What is expectancy theory? Why is it difficult to validate the effectiveness of this theory?Expectancy theory: The theory that motivation will be high when workers believe that high levels of effort lead to high performance and high performance leads to the attainment of desired outcomes. Motivation is based on people's beliefs about the probability that effort will lead to performance, multiplied by the probability that performance will lead to reward, multiplied by the perceived value of the reward. (M=V*I*E)Expectancy Theory: Determinants of Motivation-Valence (3): The value a person laces on the rewards he or she expects to receive from an organization. -Instrumentality (2): An individual's beliefs regarding the likelihood of being rewarded in accord with his or her own level of performance (P-->O) -Expectancy (1): The belief that one's efforts will positively influence one's performance (E-->P) Effort-performance relationship Performance-reward relationship Rewards-personal goals relationship Expectancy: The belief that effort (input) will result in a certain level of performance Instrumentality: The belief that performance results in the attainment of outcomes. Valence: how desirable each of the available outcomes from the job is to a person. inputs: Anything a person contributes to his or her job or organization Time, effort, skills, knowledge, work behaviors Outcome: Anything a person gets from a job or an organization Pay, job security, autonomy, accomplishmentHow does equity theory operate at work? What employment practice does it impact directly?Equity Theory: A theory of motivation that focuses on people's perceptions of the fiarness of their work outcomes relative to their work inputs Underpayment inequity and overpayment inequity Relative; perception Pay policy: internal and external pay equity Equity: Outcomes/Inputs = Outcomes/Inputs. (Example: An engineer perceives that he contributes more inputs (time and effort) and receives proprtionally more outcomes (a higher salary and choice job assignments) than his referent.) Underpayment Inequity: Outcomes/Inputs <(less than) Outcomes/Inputs. (Example: An engineer perceives that he contributes more inputs but receives the same outputs as his referent.) Overpayment Inequity: Outcomes/Inputs >(greater than) Outcomes/Inputs. (Example: an engineer perceives that he contributes the same inputs but receives more outcomes than his referent.)What is goal setting theory? What are its strengths, weaknesses,Goal setting theory: Focuses on identifying the types of goals that are effective in producing high levels of motivation and performance and explaining why goals have these effects. Goals target and energize employee behavior Can encourage team collaboration and cross-team collaboration Can produce intrinsic motivation 2.) Goals that are clear and specific produce greater motivational properties than goals that are not specific or "do your best" goals. Quantifiable and measurable properties Ex: I am going to do three sets of 10 reps on the bench press for the next 3 weeks. Difficult goals produce more motivation than easy goals A balance: stretch goals are the best, but the goal will produce frustration if unattainable and unrealistic (Ex: setting a target of 10 pull-ups in a week if you've never done a pull-up). 4.) Employees are more likely to be committed to goals when they help set the goals They require less supervision; motivation is sustained longer Goal participation includes 1) choice of goals; 2.) voice in developing the goals. 5). Employees who receive frequent feedback on their progress towards goal attainment are motivated longer than those who get infrequent or no feedback. Knowledge of results can produce learning which can be a source of intrinsic motivation. Types of goals: Routine: work goals (job description Problem solving: improvements, remove barriers (Ex: being absent) Innovative goals: (Develop new methods) Personal: Development goals (training)What are smart goals?Smart goals: -Specific: Describe what the outcome will look like if you achieve your goal including relevant details so that anyone would have the same understanding as you. Measurable: Establish concrete criteria for measuring the outcome of the goal Ambitious but also Realistic Time based: By when you will achieve this outcome.What is learning theory and what does the research say about the impact of reinforcement, punishment, and variable reinforcement schedules on motivation?Reinforcement: Directs and motivates behavior at work; increases self awareness, aids in career development. Keeping a good behavior going. Positive reinforcement: Giving people outcomes they desire when they perform organizationally functional behaviors. Negative reinforcement: Taking away a negaritve outcome when they perform organizationally functional behaviors. Punishment: Also directs and motivates Has undesirable consequences Helps people learn quickly Punishment: Giving people outcomes they don't want when they perform organizationally dysfunctional behaviors. Extinction: Taking away an outcome that rewards a dysfunctional behavior. Pay and Motivation: ªPay as a Motivator -Expectancy: Instrumentality, the association between performance and outcomes, must be high for motivation to be high. -Need Theory: pay is used to satisfy many needs. -Equity Theory: pay is given in relation to inputs -Goal Setting Theory: pay is linked to attainment of goals. -Learning Theory: outcomes (pay), is distributed upon performance of functional behaviors. -Herzberg: not a motivator, but can dissatisfy.The level of organization that contains the marketing department, R&D department, human resources department is a ________ levelFunctionalWhat is the main point of Dan Ariely's video?If we could understand our cognitive limitations, we could design a better world.In the ______ step, it may be caused by our inability to see problems from a fresh perspective and because we can be trapped in our own mental modelsGenerate AlternativesSteven is an effective and efficient manager, But he is quite pessimistic and avoids social interactions, he is....An introvertJoe Bezos would most likely score:High on negative effectResponsible for their own fate, their own actions and behaviors as major and decisiveInternal locus of controlIn "U.S workers can't get no...", the greatest decline in job satisfaction from 1987 to today can be seen in attitudes toward:Job security, health coverage, and sick leave policyIn the article: "Liking Work Really Matters", authors contend that whether we find an activity interesting depends on..Our assessment of whether something is personally valuable Chipotle's business's success is attributable to its ____________.Chipotle's business's success is attributable to its ____________.Promotion from within policies this is a Herzberg motivator because it is recognition and advancement motivation: A strong desire to perform challenging tasks well and meet personal standards for excellenceAn employee with an ___________ need might be motivated by an organizing task in organizationPowerWhat is the belief that performance results in the attainment of outcomes?instrumentalitySubjects circled pairs of letters on a sheet of paper and were paid successively less... for each sheet they completed. Which group worked the hardest and the longest?The acknowledged group this question refers to the Ariely Experiment!Amazon Erases Orwell Books from Kindle· "1984" and another Orwell book, "Animal Farm," were dropped down the memory hole · Amazon remotely deleted some digital editions of the books from the Kindle devices of readers who had bought them · Amazon's published terms of service agreement for the Kindle does not appear to give the company the right to delete purchases after they have been made. It says Amazon grants customers the right to keep a permanent copy of the applicable digital contentKindle vs. Ipad· 2 different market segments - the Ipad is a does everything tablet, while the fire HD remains focused on media consumption · Fire HD streams videos better, also better connection · The Fire uses silk, which feels clunkier and accessing bookmarks and history takes a few more steps then safari does · Reading modes · Fire HD has better speakers and better reading compatability for books and magazines · Ipad is better for games and also contains more apps · "the ipad is the best tablet you can buy today;however, the Kindle Fire HD is a great alternative if you don't want to spend Ipad levels of money or simply want a smaller screen and form factor. · The Kindle Fire exceeds the Ipad in 3 areas: streaming videos, speakers, and books · If you have the money, buy the Ipad, if you don't, the Fire will do just fineRise of the Sharing Economy· People rent beds, cars, boats and other assets directly from each other, coordinated via the internet · Technology has reduced transaction costs, making sharing assets cheaper and easier than ever - and therefore possible on a much larger scale. · Availability of more data about people and things · Before the internet, sharing things was more difficult · The core of the sharing economy is people renting things from each other · Collaborative consumption - owners make money from underused assets. Also environmental benefits. You also meet new people. The internet allows you to trust or not trust people. · The sharing economy is the latest example of the internet's value to consumersMicrosoft Kills its Hated Stack Ranking. Does anyone do Employee Reviews Right?· Microsoft has been known as the example of pitting employees against one another in an attempt to reward the excellent and weed out the weak, which gained widespread popularity in the 1980s · The problem with this is that employees didn't enjoy it, it led to people backstabbing their coworkers · Corporate America has largely lost confidence in management programgs that ham employees onto bell curves · Wanted to re-humanize the relationship between employees and bosses so they took out this programDo you suffer from Decision Fatigue?· The decisions made by court was all about timing - prisoners who appeared early in the morning received parole about 70 percent of the time, while those who appeared late in the day were paroled less than 10 percent of the time · Decision fatigue helps explain why ordinary sensible people get angry at colleagues and families, spluge on clothes, buy junkfood, etc. no matter how rational and high-minded you try to be, you can't make a decision without paying a biological price · The more choices you make throughout the day, the harder each one becomes for your brain, and eventually it looks for shortcuts, usually in either of 2 very different ways: one shortcut is to become reckeless: to act impulsively instead of expending the energy to first think through the consequences. The other shortcut is the ultimate energy saver: do nothing, avoid any choice · Ego depletion - they studied self control, willpowerCan't Get no Satisfaction· Workers are less competent with their jobs than they were in 1987 · The decline suggests a steady erosion of trust and loyalty between employers and employees · Benefits are disappearing (healthcare coverage) · Job security, health coverage, and sick leave policies have declined (long term) · On a shorter term horizon, employees are happier now with their pay, bonus plans, career development and flexible work opportunities · Their colleagues and the interest in the work they are doing · Layoffs scare workers of job security · The board distinguishes its target by saying that satisfaction is focused instead on more measurable components such as pay and benefits and "does not explore the full range of emotional and behavioral ways employees interact with their workplaces"Customers Can Keep the Tip· Restaurants across the US experiment with no-tipping models, opting instead to charge higher set prices for menu items and give their servers higher hourly pay · Eliminates stress on customer - employees are more satisfied and service has improved · Wage increases are bound to translate into higher menu prices · Tipping is a winning and loosing system · But tipping motivates workers for good service and makes the restaurant business look attractive · Taking the risk off the server and putting it back on the business - there's hardly any turnover - everybody's making moneyYouth Attitudes Shift in Great Recession· Great recession = wake up call · This caused young people to be more interested in conserving resources and a bit more concerned about their fellow human beings · People become more community minded and less materialistic when faced with economic hardship · Great recession group - wanted jobs where they could make a significant amoung of money, also showed a bit less interest in luxury items · Many young people are living in 'milennial purgatory' - unemployed or under-employed, working in jobs below their qualifications and sometimes still living at home with their parents · How parents handle the stress of an economic situation affects a child's resillence - but so does that child's personalityLiking Works Really Matters - NYTimesWorking on something you enjoy is a lot easier ambitious architect using calculus to design and create a building Flow: When you're in the zone, highly focused and get lost in the activity Word puzzle study: Those who thought it would be fun and enjoyable solved the most problems, because their engagement made them more efficient ("in the zone") Were also less fatigued afterwards, held the hand grip longer and harder What if you don't find it interesting? make it applicable to your life and how what you are learning or working on is valuable Social engagement can foster interestChipotle Management Style - Nisenhow chipotle transformed itself by upending its approach to management chipotle favors human skills over rules, robots, and timers. the company focused on creating a system where promoting managers from within would create a feedback loop of better, more motivated employees restaurateur program → allows hourly crew members to become managers earning well over 100,000 dollars a year they are chosen from the ranks of general managers for their skill at managing their restaurant and, especially their staff it is a way to make sure that great managers are given the chance to make an individual store great workers can move much more quickly through the ranks of promotion than one normally can with another company (Flores) the manager is the most important person at the company of chipotle, and they were making bad workers managers, and that needed to change they also weren't treating managers like the most important the common element among the best-performing stores was a manager who had risen up from the crew → so moran started to outline a program that would retain and train the best managers, and reward them to the point that they would be thrilled to stay the restaurateur program - is unique because it ties pay and promotion to how well you mentor people rather than store sales Flores was promoted to a restaurateur the goals of every manager is to become a restaurateur they dont look for experience, they look for certain qualities that cannot be taught - there is a checklist of certain qualities that chipotle employees should have → you should be able to pick up whether a candidate has these certain traits chipotle's increasing size and their insistence on cooking everything on location presents a unique challenge: the growth rate puts a strain on our culture, and if growth slows, it could put strain on company's cost structure Moran doesn't believe in promoting people because of seniorityThe Most Common Reason American Women Start Their Own Businesseswomen start or want to start their own business to achieve work life balance women in different countries have different motivators (controlling their futures, having pride in themselves) passion and independence was also another popular motivator business interests differed from country to country, these were the most common businesses among women surveyed: US: consulting China & Mexico: apparel and accessories France: Health & Beauty, handmade and artisan crafts alot of women were optimistic about starting their own business most women said they werent ready to start their own business (in the US)Being There - Steelecompanies take diverse approaches to attendance reward programs absenteeism is often a workplace challenge for today's employers even though about half of the decision-makers in midsize and large companies report that absenteeism has reduced their productivity. While United uses giveaways, a variety of attendance rewards programs are in place at other companies. Steel Warehouse's Memphis and Chattanooga workforces incorporated a point system for attendance half a point if they arrive late or leave early one point if they are absent or miss more than half one and a half points if they fail to call in when they will miss work Besides losing out on the attendance rewards, employees with four or more points are not eligible for job transfers or raises. To be eligible for attendance rewards, employees must have worked at least two-thirds of their scheduled duty days. They start out with a maximum reward of $1,600, and that amount is reduced for each sick-leave incident that occurs that year Steel Warehouse doesn't have a tangible ROI figure for its attendance rewards program, but Taylor says the program helps with morale, keeps communication open and lets people know what's expected of them The first month after Continental employees were given a chance to win one of 18 cars, the airline set a goal of having 85 percent of its flights be on time. That year, the company saw a 60 percent improvement on loss time, or time lost due to employee absences. Towle cautions that company leaders should not think an attendance bonus is going to solve their absenteeism problems. People come to work because you've created an environment where they enjoy coming to work each day." The attendance rewards program is just the icing on the cake. an attendance rewards program is probably the last piece of the puzzle if a company wants to address absenteeism problems → they need to figure out why employees are late or not showing up, and then fix the environment based off thatWhat Really Motivates Employees is Simply Recognizing Them - Max Nisenfinding meaning in work and being able to progress is incredibly important for motivation this means managers play a huge role in the quantity/quality of someone's work experiment with legos - 2 groups - broke down their work in front of them - paid them successively less for each prototype if you take away someone's meaning once, they're likely to remember a low pay sometimes means harder work (paper experiment) acknowledgement is essential, even the briefest notice and attention makes a difference. its about remembering workers are humans, not machines. money is a powerful motivator, but it is not the only one. the best managers and companies figure out how to use meaning as well.Dan Pink-IncentivesStudy at MIT shows that a monetary reward for small tasks that do not require intellectual effort has somewhat of an effect on performance. Although when you increase the thought required in the task it turns out that the more money that is offered decreases performance Proved in India as well, offered a 2 week, one month salary, and two month salary. Proved that the first two tiers were about equal but the two month salary did the worse. Companies these days need a purpose, not just profit. skype, apple, etc. Company in Australia, every month on a thursday they allow their employees to work on whatever they want with whoever they want has lead to progressions and innovations in their software company A company needs to have a message and statement that isn't strictly profit, need an intrinsic value behind what you do everyday. also should look at science and research more compared to economics and old school business strategiesWhat are the three skills of management? Conceptual:1.)conceptual - conceptual skills are demonstrated in the general ability to analyze and diagnose a situation and to distinguish between cause and effect. top managers require the best conceptual skills because their primary responsibilities are planning and organizing formal education and training are important in helping managers develop conceptual skills.What are the three skills of management? Human:2.)human - include the general ability to understand, alter, lead, and control the behavior of other individuals and groups. The ability to communicate, to coordinate, and to motivate people, and mold individuals into a cohesive team distinguishes effective from ineffective managers. human skills can be learned through education and training, as well as be developed through experience thorough and direct feedback allows managers to develop their human skillsWhat are the three skills of management? Technical:3.)technical - technical skills are the job specific skills required to perform a particular type of work or occupation at a high level ex. IT skills Managers need a range of technical skills to be effective the array of technical skills managers need depend on their position in their organizationAre different skills used at different levels of management?-organizations group managers into departments on the basis of their job specific skills (figure 1.5 in book) → (research and development department, marketing and sales department, manufacturing department, accounting department, materials management department) -inside each department, a managerial hierarchy of first-line managers, middle managers, top managers, and CEO emerges -core competency - is often used to refer to the specific set of department skills, knowledge, and experience that allows one organization to outperform its competitors → department skills that create a core competency give an organization a competitive advantage effective managers need all three kinds of skills - conceptual, human, and technical - to help their organizations perform more efficiently and effectively. the absence of even one type of managerial skill can lead to failure.Briefly, what are some of the recent changes in management practices and challenges for management in a global environment?To utilize IT to increase efficiency and effectiveness, CEOs and top management teams have been restructuring organizations and outsourcing specific organizational activities to reduce the number of employees on the payroll and make more productive use of the remaining workforce. restructuring - involves simplifying, shrinking, or downsizing an organization's operations to lower operating costs. This can be done by eliminating product teams, shrinking departments, and reducing levels in hierarchy, all of which result in the loss of large numbers of jobs of top, middle, or first-line managers, as well as nonmanagerial employees outsourcing - involves contracting with another company, usually in a low cost country abroad, to have it perform a work activity the organization previously performed itself, such as manufacturing, marketing, or customer service. Increases efficiency because it lowers operating costs, freeing up money and resources that can be used in more effective ways - for example, developing new products. insourcing - there are other areas in which companies that depend on a reliable supply of high-quality components and finished products have experiences problems with outsourcing production abroad, and many companies have or are in the process of moving back production to the US the second principal way managers have sought to increase efficiency and effectiveness is by empowering lower-level employees and moving to self-managed teams empowerment - a management technique that involves giving employees more authority and responsibility over how they perform their work activities self managed teams - a group of employees who assume collective responsibility for organizing, controlling, and supervising their own work activitieschallenges for management in global environment:global organizations - organizations that operate and compete in more than one country, has pressured many organizations to identify better ways to use their resources and improve their performance today, managers who make no attempt to learn from and adapt to changes in the global environment find themselves reacting rather than innovating, and their organizations often become uncompetitive and fail. Four challenges stand out for managers in today's world: building a competitive advantage - competitive advantage is the ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than its competitors. The four building blocks of competitive advantage are superior efficiency, quality, innovation, and responsiveness to customers innovation - the process of creating new or improved goods and services that customers want or developing better ways to produce or provide goods and services, poses a special challenge. Managers must create an organizational settings in which people are encouraged to be innovative. turnaround management - is the creation of a new vision for a struggling company using a new approach to planning and organizing to make better use of a company's resources and allow it to survive and eventually prosper maintaining ethical standards - managers at all levels are under considerable pressure to make the best use of resources to increase the level at which their organizations perform pressure to increase performance can be healthy for an organization because it leads managers to question how the organization is working, and it encourages them to find new and better ways to plan, organize, lead, and control however, too much pressure to perform can be harmful. It may induce managers to behave unethically, and even illegally, when dealing with people and groups inside and outside the organization. managing a diverse workforce - a major challenge for managers everywhere is to recognize the ethical need and legal requirement to treat human resources fairly and equitably. Today, the age, gender, race, ethnicity, religion, sexual preference, and socioeconomic composition of the workforce presents new challenges for managers. to create a highly trained and motivated workforce, as well as to avoid lawsuits, managers must establish human resource management (HRM) procedures and practices that are legal and fair and do not discriminate against any organizational members managers must recognize the performance-enhancing possibilities of a diverse workforce, such as the ability to take advantage of the skills and experiences of different kinds of people utilizing new information systems and technologies - another important challenge for managers is to continually utilize and effective new IT that can link and enable managers and employees to better perform their jobs new kinds of IT enable not just individual employees but also self-managed teams by giving them important information and allowing virtual interactions around the globe using the internet. Increased global coordination helps improve quality and increase the pace of innovation - use of IT also helps build a competitive advantageCompare and contrast the management theories of Taylor, Weber, the Hawthorne studies and Human Relations movement.Human Relations movement:A management approach that advocates the idea that supervisors should receive behavioral training to manage subordinates in ways that elicit their cooperation and increase their productivity. Frederick Taylor - scientific management, the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency. Weber's- bureaucracy—a formal system of organization and administration designed to ensure efficiency and effectiveness—and created bureaucratic theory. A bureaucratic system of administration is based on five principles. Hawthorne- Hawthorne effect—seemed to suggest that the attitudes of workers toward their managers affect the level of workers' performance.What is an entrepreneur, what are their characteristics, and how do they operate in different environments (e.g., within an established company)?-Entrepreneur: an individual who notices opportunities and decides how to mobilize the resources necessary to produce new and improved goods and services - characteristics: openness to experience, have an internal locus of control, high level of self- esteem and a high need for achievementWhat is the sharing economy?-The sharing economy (sometimes also referred to as the peer-to-peer economy, mesh, collaborative economy, collaborative consumption) is a socio-economic system built around the sharing of human and physical resources.What kind of competitive threat (the five forces model) might an upstart "sharing economy" business pose for an established, traditional business? → in articles!!!degree of competition for customers tends to drive down profits - good example are the overabundance of restaurants in Boulder. Competition leads to lowering of prices and more advertising. Just look in a supermarket for this. Level of rivalry is high in the t shirt business, in the car business, in the supermarket business. The strongest competitive force is the most important to strategy formulation. sharing economy - socio-economic system built around the sharing of human and physical resourcesWhat are the differences between vertical integration, diversification, and international expansion strategies? Vertical Integration:Vertical Integration - is a corporate level strategy in which a company expands its business operations either backward into a new industry that produces inputs for the company's products (backward vertical integration) or forward into a new industry that uses, distributes, or sells the company's products (forward vertical integration). → the combination in one company of two or more stages of production normally operated by separate companies. examples: backward vertical integration - a steel company that buys iron ore mines and enters the raw materials industry to supply the ore needed to make steel examples: forward vertical integration - Apple's decision to open its own stores to make its unique products more accessible to customers who could try tem out before they bought them examples: forward vertical integration - a PC maker that decides to enter the retail industry and open a chain of company-owned retail outlets to sell its PCS is engaging in forward integration vertical integration allows managers to either add value to their products by making them special or unique or to lower the costs of making and selling themWhat are the differences between vertical integration, diversification, and international expansion strategies? Diversification:diversification - is the corporate level strategy of expanding a company's business operations into a new industry in order to produce new kinds of valuable goods or services Example: PepsiCo's diversification into the snack food business with the purchase of Frito Lay related diversification - is the strategy of entering a new business or industry to create a competitive advantage in one or more of an organization's divisions or business synergy - obtained when the value created by two divisions cooperating is greater than the value that would be created if the two divisions operated separately and independently unrelated diversification - managers pursue unrelated diversification when they establish divisions or buy companies in new industries that are not linked in any way to their current business or industries one main reason for pursuing unrelated diversification is that sometimes managers can buy a poorly performing company, transfer their management skills to that company, turnaround its business, and increase its performance - all of which create value another reason is that purchasing businesses in different industries lets managers engage in portfolio strategy - which is apportioning financial resources among divisions to increase financial returns or spread risks among different businesses, much as individual investors do with their own portfolioWhat are the differences between vertical integration, diversification, and international expansion strategies? International Expansioninternational expansion - to what extent should the organization customize features of its products and marketing campaign to different national conditions? global strategy - if managers decide that their organization should sell the same standardized product in each national market in which it competes, and they use the same basic marketing approach multidomestic strategy - if managers decide to customize products and marketing strategies to specific national conditions licensing - a company (the licensor) allows a foreign organization (the licensee) to take charge of both manufacturing and distributing one or more of its products in the licensee's country or world region in return for a negotiated fee franchising - a company (the franchiser) sells to a foreign organization (the franchisee) the rights to use its brand name and operating know-how in return for a lump sum payment and share of the franchiser's profits strategic alliance - managers pool or share their organization's resources and know-how with those of a foreign company, and the two organizations share the rewards or risks of starting a new venture in a foreign country joint venture - a strategic alliance among two or more companies that agree to jointly establish and share the ownership of a new business wholly owned foreign subsidiary - they invest in establishing production operations in a foreign country independent of any local direct involvementWhat was the significance of the Chaplin mask and the monkey business videos?Chaplin Mask: example of bounded rationality and top-down processing In the monkey experiment - our intense focus on counting causes us to disregard other information. Intense focus and concentration causes us miss unexpected information. Ambiguous Information can be a source of incomplete information: Information that can be interpreted in multiple and often conflicting waysWhat are the main points about decision making from the Dan Ariely video? (from her lecture notes?)Main point: if we could understand cognitive limitations, we could design a better world We wake up in the morning and we feel we make decisions. Actually the decision is made by the person writing the form. It is hard to intuit this result. If you were to encounter the form, would the behavior be impacted by it? No, of course, not me. We have an illusion of making a decision. In fact, we care, it is difficult and complex and don't know what to do so we do what was chosen for us. They gave doctors a choice: nothing is working, so patient is referred to hip replacement. A) there was one medication you forgot (majority pull back patient) B) there were two medications you didn't try (the majority let the patient go to hip replacement).What are some examples of intuitive decision making, of reasoned judgment?Example 1: John Gottman, a well-known marital expert, describes how within an hour of observing a couple, he can gather with 95% accuracy if the couple will be together within 15 years. His accuracy goes down to 90% if he observes the couples for 15 minutes, supporting the phenomenon of thin-slicing. Example 2: Many other uses of thin-slicing are implied and seen throughout the media such as firemen making split-second decisions, or cops knowing something is wrong by simply a gut feeling. All these imply and show that thin-slicing actually occurs and is a fact of life that actually occurs within everyone. "the ability of our unconscious to find patterns in situations and people based on very narrow 'slices' of experience."What was the significance of the Marshmallow experiment ?kids who delayed eating the marshmallow later had higher SAT scores, had a higher level of education and were healthier people who have an internal locus of control believe they themselves are responsible for their own fate; see their own actions and behaviors as being major and decisive determinants of important outcomesIn detail, describe the different personality frameworks and how they impact worker efficiency and effectiveness.A. Extraversion: tendency to experience positive emotions and moods and feel good about oneself and the rest of the world 1. Managers high in extraversion tend to be sociable, affectionate, outgoing and friendly 2. Managers low in extraversion tend to be less inclined toward social interaction and have a less positive outlook B. Negative Affectivity: tendency to experience negative emotions and moods, feel distressed, and be critical of oneself and others Ex: Bezos C. Agreeableness: tendency to get along well with others 1. managers high in this are likable, affectionate and care about others 2. managers low in this may be distrustful, unsympathetic, uncooperative and antagonistic D. Conscientiousness: tendency to be careful, scrupulous and preserving (ex: marshmallow experiment) 1. managers high in this trait are organized and self- disciplined 2. managers low in this trait lack direction and self- discipline E. Openness to Experience: tendency to be original, have broad interests, be open to a wide range of stimuli, be daring and take risksWhy might low self-esteem be problematic in terms of work success?-People with low self esteem have poor opinions of themselves and their abilities. -They might not feel like working hard if they aren't reaching expectations and don't feel like they have a meaningful responsibility.What are some of the strengths and weaknesses of the sharing economy from a worker's point of view?Ms. Guidry drives her own car around boston picking strangers up via Uber and other apps. The app allows people to connect services with sellers and she is the microentrepreneur. Of course this brings opportunities and strength in a sharing economy. Although at the same time it is very up in the air and can be risky. Good deal for consumers as well as investors, can run a company with no salary cost Although for the worker they don't receive any benefits, no consistent salary, no insurance, can't challenge companies decisions on terms The pay is good, it is convenient for the worker. But from an economical standpoint and from an insurance perspective it doesn't make sense. what happens if the taxi driver gets in a car accident. who pays for the health insurance bills, who pays for the car...the worker in most cases. The employer will not back you up Also is predicted that the online marketplace, made possible by the technology may erode work compensation in the long term Nothing that you can rely on as a worker in the long run Pay weakness hard time getting enough money No benefits ( health insurance)Is there a right or wrong personality for work?no single trait is right or wrong for being an effective managerWhat did our class exercise show about the decision making process of the "feeling" types?feeling types use mental evaluations and emotional reactions, and see things as good or bad Thinker are doers in class they said to fire themWhy don't motivation theories predict behavior exactly?Point: Personalities can't exactly be predicted so they can't be tied exactly to a motivation theory. Social science are new sciences not understood enough to describe every single person.What are the major components of pay? How are people motivated by these components?A. Pay as a motivator Expectancy: association between performance and outcomes, must be high for motivation to be high Need theory: pay is used to satisfy many needs Equity theory: pay is given in relation to inputs Goal setting theory: pay is linked to attainment of goals Learning theory: pay is distributed upon performance of functional behaviors Herzberg: not a motivator, can dissatisfy