MOB Exam 2

Ch. 8-11, 18

Informal Planning

The type of planning where nothing is written down and objectives aren’t shared within the organization

Formal Planning

The type of planning where specific objectives are written down, shared, and have actionable plans made

Strategic Plan

A plan that applies to the entire organization, establishes objectives, and evolves from the mission; longer than 5 years, broad, and creates objectives

Operational Plan

A plan that details of how objectives will be achieved; shorter, specific, and goes off objectives

Directional Plan

A plan that identifies general guidelines, doesn’t lock into a plan of action; preferable when uncertainty is high

Specific Plan

A plan that has clearly defined objectives but requires predictability

Standing Plan

An ongoing plan that gives guidance for repeated activities; includes policies, rules, procedures

Static Plan

A plan that is unresponsive to dynamic environments

Scenario Plan

A plan that makes assumptions about what will happen and how to respond

Scenario

A consistent view of what the future will be

Commitment Concept

The more current plans affect future commitments, the longer time frame management should plan for; plans should be long enough to see through commitments made today

strategic

As the level in the organization increases, planning becomes more (operational/strategic)

short-term

As the environmental uncertainty increases, the more emphasis should be placed on the (short-term/long-term)

Objective

A desired outcome; provides direction for management decisions

Stated Objective

The official statement of what an organization says its objectives are

Real Objective

Objectives the organization actually pursues

Traditional Objective Setting

Objectives are set at the top and broken into subgoals

Management by Objectives

Objectives are determined jointly by subordinates and superiors

Cascading Objectives

Overall objectives are translated into specific ones for each level

Environmental Scanning

Screening info to detect emerging trends and create a set of scenarios

Competitive Intelligence

Gathering information about competitors to anticipate their actions

General Environment

Factors include political, economic, social, and technological

Specific Environment

Factors include industry, competitors, suppliers, and customers

Strategic Management

Top management formulating and implementing initiatives

Business Model

How a company uses resources to create value/profits

Strategy

The plan for how a business will do what they’re in business to do

Identify the mission

Step 1 in the strategic management process

SWOT Analysis

Step 2 in the strategic management process

Resource

An asset used to develop, manufacture, and deliver products to customers

Capability

A skill in doing work needed in a business

Core Competency

A value-creating ability of an organization

Strength

An activity that an organization does well and their unique resources possessed

Weakness

Activities that an organization doesn’t do well

Opportunity

Positive trends in the external environment

Threat

Negative trends in the external environment

Formulate strategies

Step 3 in the strategic management process

Implement strategies

Step 4 in the strategic management process

Evaluating results

Step 5 in the strategic management process

Corporate Strategy

The strategy that determines what business a company is or wants to be in

Growth Strategy

A strategy that focuses on expanding the number of markets served or products offered

Concentration

The strategy that increases the number of products offered in primary lines of business

Vertical Integration

Can either be backward, in which a companies supplies its own inputs, or forward where it distributes its own outputs

Horizontal Integration

Combining with competitors

Diversification

Combining with companies in a related industry

Stability Strategy

The strategy that continues to do what a company is already doing

Renewal Strategy

A strategy that addresses declining performance and involve cutting costs and restructuring operations

Retrenchment Strategy

A short-run strategy that is used for minor performance problems to prepare to compete again

Turnaround Strategy

A strategy that is used when organization problems are serious

Competitive Strategy

How an organization will compete in its businesses

Competitive Advantage

What distinctive edge sets an organization apart

Cost Leadership Strategy

A strategy that competes on the basis of having the lowest costs (not prices)

Differentiation Strategy

A strategy that competes by offering unique products valued widely by customers

Focus Strategy

A strategy that creates a cost or differentiation advantage in a narrow segment

Stuck in the Middle

A situation where there isn’t an advantage in either cost or differentiation

First Mover

The first organization to bring an innovation to the market

Controlling

The process of monitoring, comparing, and correcting work performance

Measure actual performance

Step 1 of the control process

Compare actual performance against the standard

Step 2 of the control process

Range of Variation

Acceptable variance between the actual and standard performances

Take managerial action

Step 3 of the control process

Immediate Corrective Action

Corrects problems at once and gets performance back on track

Basic Corrective Action

Finds how and why performance deviated and corrects the source

Performance

The end result of an activity

Organizational Performance

The accumulated results of all of the organization’s work activities

Productivity

The goods/services (measured by sales revenue) produced divided by inputs needed to product them

Organizational Effectiveness

How appropriate goals are and how well they’re met

Disciplinary Action

A manager’s action to enforce an organization’s work standards and regulations

Progressive Disciplinary Action

Discipline that moves sequentially through steps for each offense

Feedforward Control

A type of control that takes place before the activity; most desirable because it focuses on the future but requires timely and accurate information

Concurrent Control

A type of control that takes place during the activity

Feedback Control

A type of control that takes place after the activity; gives meaningful information and enhances motivation

Liquidity Ratios

Measures the ability of a company to meet debt obligations

Leverage Ratios

Measures the ability of a company to use debt to finance assets and make interest payments

Activity Ratios

Measures how efficiently a company uses its assets

Probability Ratios

Measures the how well a company uses its assets to generate profits

Management Information System

A system used to provide managers with needed information regularly

Balanced Scorecard

Evaluates organizational performance in the areas of financial, customers, internal processes, and people/innovation/growth

Benchmarking

Identifying, analyzing, and adapting best practices from other organizations

Benchmark

The standard of excellence to compare and measure up to

Employee Theft

The unauthorized taking of company property for employee personal use

Corporate Governance

The system used to govern an organization to protect the owners’ interests

Corporate Compliance

Making sure your company and employees follow applicable laws

Compliance Officer

Ensures the company is in compliance

Organizational Structure

The formal arrangement of jobs in an organization

Organizational Design

Changing the organizational structure

Work Specialization

The degree to which activities are divided into separate jobs

Departmentalization

How jobs are grouped together

Functional Departmentalization

Groups jobs by function

Geographical Departmentalization

Groups jobs by region

Product Departmentalization

Groups jobs by product lines

Process Departmentalization

Groups jobs on the basis of product and customer flow

Chain of Command

The line of authority that clarifies who reports to whom

Authority

The right to tell people what to do

Line Authority

A manager directing an employee

Staff Authority

Functions that support managers

Responsibility

The expectation to perform duties assigned

Unity of Command

A person should only report to 1 manager

Span of Control

How many employees a manager can effectively manage

Centralization

The degree to which decision-making takes place at upper levels

Decentralization

The degree to which decision-making takes place at lower levels