Introduction to Management Midterm 2 (University of Iowa)

Types of managers

Top managers

Middle managers

First-line managers

Team leaders

Four functions of managers

Planning

Organizing

Leading

Controlling

Planning

"determining organizational goals and a means for achieving them"

-setting goals and deciding on action

-developing rules and procedures

-developing budgets and plans

-all managers plan, no matter what level they are

Organizing

"deciding where decisions will be made, who will do what jobs and tasks, and who will work for whom in the company"

-identifying jobs to be done

-hiring people to do them

-establishing departments

-establishing a chain of command

-delegating

Leading

"inspiring and motivating workers to work hard to achieve organizational goals"

-influencing others to get the job done

-maintaining morale

-molding company culture

-managing conflicts and communication

Controlling

"monitoring progress toward goal achievement and taking corrective action when progress isn't being made"

-setting standards

-comparing performance with standards

-taking corrective action

Managerial skills

Conceptual

Human

Technical

Motivation to Manage

Conceptual Skills

The ability to see the organization a whole, to understand how the different parts of the company affect each other, and to recognize how the company fits into or is affected by its external environment

Human Skills

The ability to work well with others

Work effectively in groups

Encourage other to express their thoughts and feelings

Sensitive to others' needs and viewpoints

Good listener/communicator

Technical Skills

The specialized procedures, techniques, and knowledge required to get the job done

What managerial skills different levels of managers should possess

Top managers: mostly human and conceptual, a little technical

Middle managers: Mostly human, even amount of technical and conceptual

First-line managers: Mostly human and technical, a little conceptual

Morgenstern's time management tips

Decide when you have to do things, not just what you have to do

Assign to-do list tasks to a "home" in your schedule

Not enough time?

-Delete

-Delay

-Diminish

-Delegate

What is the marshmallow principle

Prototype then refine

Not just one best right answer

6 steps in ethical decision making

1. Identify the problem

2. Identify the constituents

3. Diagnose the situation

4. Analyze your options

5. Make your choice

6. Act

Shareholder Model

Milton Friedman

Purpose of business is to maximize profit

It is socially irresponsible for companies to divert time, money, and attention from maximizing profits to social causes and charitable organizations

-they can't act effectively as moral agents for all company shareholders

Stakeholder Model

Terry Mollner

Management's most important responsibility is the firm's long-term survival, which is achieved by satisfying interest of multiply corporate stakeholders

Primary stakeholders

Shareholders, employees, customers, suppliers, governments, local communities

Secondary stakeholders

Media, special interest groups

Responsibility strategies

Listed in order from least socially responsible to most

Reactive

-you react against the notion of social responsibility

-decline or deny social responsibility

-doing less than society expects

Defensive

-willing to admit responsibility for a problem but will do the least requires to meet societal expectations

Accommodative

-accept responsibility and take a progressive approach by doing all that could be expected to solve the problem

Proactive

-anticipating responsibility for a problem before it occurs, doing more than expected to address the problem, and leading the industry in the approach

Components of general environment

Economy

-what is the level of business activity in an economy or world

-growing economy > more business activity > growing demand, opportunity for your business to expand

-shrinking economy > less business activity > shrinking demand, less opportunity for your business to expand

-businesses will make decisions on whether to expand or not based on scanning the economy

Technology

-umbrella term that refers to all knowledge, tool, techniques required to turn inputs into outputs

-kodak invented digital photography technology that later caused them to go out of business

Socioculture

-general patterns of behaviors, attitudes, values, etc. of a society

-socioculture changes will affect what types of products and services people are willing to buy

Political/Legal

-refers to laws, regulations, court decisions that govern and regulate business behavior across all industries

Internationalization Process

Stage 1: Exporting: Make product at home and ship it abroad

Stage 2: Cooperative contracts

Stage 3: Strategic alliances

Stage 4: Wholly owned affiliates

Global Venture new step

Stage 1: exporting

-selling products in a different place than its manufacturing origin

Stage 2: Cooperative contracts

-licensing and franchising

ex: foreign business owner pays company fee to operate company in their country (ex: opening McDonald's in Germany)

Licensing

A domestic company, the licensor, receives royalty payments for allowing another company, the licensee, to produce its product, sell its service, or use its brand name in a particular foreign market.

Franchising

The franchisor, licenses the entire business to another person or organization, the franchisee. For the price of an initial franchise fee plus royalties, franchisors provide franchisees with training, assistance with marketing and advertising, and an exclusive right to conduct business in a particular location.

Stage 3: Strategic alliances

Companies combine key resources, costs, risks, technology, and people.

Stage 4: Wholly owned affiliates

-When a company completely buys another one outright

-ex: coke buys out Brazilian beverage and then takes over their market by putting

Global New Adventures

New companies that are founded with an active global strategy and have sales, employees, and financing in different countries

Growing markets

Two factors help companies determine the growth potential of foreign markets: purchasing power and foreign competitors.

Consequently, countries with high and growing levels of purchasing power are good choices for companies looking for attractive global markets.

The second part of assessing the growth potential of global markets involves analyzing the degree of global competition, which is determined by the number and quality of companies that already compete in a foreign market.

Political Risk

Political uncertainty is associated with the risk of major changes in political regimes that can result from war, revolution, death of political leaders, social unrest, or other influential events.

policy uncertainty

Policy uncertainty refers to the risk associated with changes in laws and government policies that directly affect the way foreign companies conduct business

how to get funding

Equity: Investors in you company "owners equity" and don't have to pay back.

Debt: Borrow money from creditors don't have to give up any ownership but have to pay back.

Awards from competitions

Key Ideas behind 'burn your business plan'

Entrepreneurs should focus their company-building efforts on such tasks as creating a Web site that communicates their business model, obtaining publicity, keeping the finances under control, and making sales before thinking seriously about writing a business plan (Act don't plan)

Steps in rational decision making

1. Define the problem

2. Identify decision criteria

3. Weigh the criteria

4. Generate alternative courses of action

5. Evaluate each alternative

6. Compute the optimal decision

Decision criteria

The standards used to guide judgments and decisions. Typically, the more criteria a potential solution meets, the better that solution will be.

Weigh the Criteria

decide which criteria are more or less important

Generate alternative courses of action

generate as many alternatives as possible to find possible courses of action that will solve the problem

Evaluate each alternative

systematically evaluate each alternative against each criterion

Compute the optimal decision

Compute the optimal decision by determining the optimal value of each alternative. This is done by multiplying the rating for each criterion by the weight for that criterion, and then summing those scores for each alternative course of action that you generated.

SWOT Analysis

identifying internal

strengths (S)

weaknesses (W)

and also examining external

opportunities (O)

threats (T)

Portfolio strategy

a corporate-level strategy that minimizes risk by diversifying investment among various businesses or product lines

BCG

a portfolio strategy that managers use to categorize businesses by growth rate and relative market share (uses a matrix)

Uses the terms

1: Stars

2: Question Marks

3: Cash Cows

4: Dogs

Stars

Have a dominant market share in high-growth markets

Question Marks

Low market shares in fast-growth markets

Cash Cows

A dominant market share in a low-growth-potential market

Dogs

Have a small share of a slow-growing market.

Grand Strategy

Broad strategic plan used to help an organization achieve its strategic goals.

There are three kinds of grand strategies:

1: growth

2: stability

3: retrenchment/recovery.

Growth Strategy

A strategy that focuses on increasing profits, revenues, market share, or the number of places in which the company does business

Stability Strategy

a corporate strategy in which an organization continues to do what it is currently doing

Retrenchment strategy

strategy designed to reduce the scale or scope of a corporation's businesses

Control Process

1: Set standard

2: Measure actual performance

3: Compare with standard

4: Identify deviations

5: Analyze deviations

6: Take corrective action

Three types of control

1) Feedforward control: happens before you deliver product or service

- Monitoring inputs

- Anticipating and preventing problems

2) Concurrent control: happens as you create the product or deliver the service

- Monitoring processes

- Adjusting ongoing activities

3) Feedback control: happens after you create the product or deliver the service

- Monitoring products

- Learning from past mistakes

Feedforward control

control that allows managers to anticipate problems before they arise

- Monitoring inputs

- Anticipating and preventing problems

Concurrent control

control that takes place while a work activity is in progress

- Monitoring processes

- Adjusting ongoing activities

Feedback control

a mechanism for gathering information about performance deficiencies after they occur

- Monitoring products

- Learning from past mistakes

Budgets

Most widely used control device, Organizations usually have many budgets:

Sales budgets (revenue),

Operating budgets (expenses),

Income statements (revenue, expenses, and net income),

Balance sheet (assets, liabilities, & net worth)

Economic value added (EVA)

It is the amount by which profits exceed the cost of capital in a given year. It is based on the simple idea that capital is necessary to run a business and that capital comes at a cost.

Experiential (Discontinuous)

Uncertain environments, Intuition, flexibility, Goal: New product/service. Can be planned through deliberate creation of creative work environments, and testing!

Compression (Incremental)

Certain environments, Series of steps, Goal: Faster/cheaper. Can be managed primarily through traditional planning & control processes

Resistance to change

Opposition to change resulting from

1: Self-interest,

2: misunderstanding and distrust,

3: and a general intolerance for change

Matrix departmentalization drawbacks

high level of coordination required to manage the complexity involved in running large, ongoing projects at various levels of completion

Span of control

the number of people who report to a manager. Narrow spans of control create "tall" organizations, while wider spans of control create "flat" organizations

Mechanistic design (incremental)

Very clear chain of command, Vertical communication, centralized authority, Low delegation, High specialization

Organic design (discontinuous)

Think broadly about who you report to, Lateral communication, Decentralized authority, High delegation, High generalization

Centralization of authority

the location of most authority at the upper levels of the organization

Decentralization

Degree to which decision-making authority is given to lower levels in an organization's hierarchy.

Which is more beneficial centralization or decentralization and why?

Decentralization because it develops employee capabilities throughout the company, leads to faster decision making, more satisfied customers/employees