Ch 8 - Understanding the Management Process

What are the four functions of management? Give a brief explanation on each function. 

• Planning: Where strategy is developed.

• Organizing: Structuring the enterprise (business)

• Leading and Motivating: Influences and guides people. 

• Controlling: Evaluates strategy implementation. 

True or False: Planning focuses on reacting to current problems rather than anticipating future needs.

False

________ involves allocating resources and coordinating activities to achieve goals efficiently.

Organizing

Leading and motivating primarily focus on:
a) Resource allocation
b) People and influence
c) Budgeting
d) Controlling outcomes

b) People and influence

True or False: The controlling function ensures that actual performance aligns with planned performance.

True

Identify which function of management is being described below:

Establishing organizational goals and deciding how to achieve them, including resource identification. This is where strategy is developed. 

Planning

Identify which function of management is being described below:

Allocating resources, responsibilities, and efficiently and effectively to accomplish goals. this involves structuring the enterprise.  

Organizing

Identify which function of management is being described below:

Influencing and guiding people to work towards a common goal, providing reasons for them to act in the organization’s best interest, and facilitating tasks. 

Leading and Motivating

Identify which function of management is being described below:

Setting performance standards, continuously measuring actual results against these standards, and making necessary corrections. this evaluates strategy implementation. 

Controlling

The following involves what function of management? 

• Vision Statement

• Mission Statement

Planning

A clear, concise outline of an organization’s desired future, values, and long-term goals. 

Vision Statement

Describes the organization’s current activities, how they achieve goals, and what differentiates it from competitors. 

Mission statement

Establishing long-term (1-5+ years), broad goals for the entire organization, typically by top management and determining necessary resources. It’s a broad guide. 

Strategic Planning

Developed by middle management for specific functional areas, usually for one year or less, to implement strategic plans (executing plans/policies).

Tactical Planning

Created by lower-level management for units within functional areas, focusing on day-to-day operations to implement tactical planning.

Operational Planning

“What-if” plans outlining alternative courses of action for unexpected or unknown events that could disrupt current plans. They allow proactive responses, preventing reactive, potentially disastrous decisions. 

Contingency Planning

The mission statement focuses on:
a) The organization’s desired future
b) The organization’s current activities and purpose
c) Employee job descriptions
d) Marketing strategies only

b) The organization’s current activities and purpose

________ planning translates strategic goals into specific actions for each department or function.

Tactical Planning

True or False: Operational planning primarily addresses daily tasks and immediate goals.

True

Contingency planning is best described as:
a) Risk management
b) Emergency backup planning for unforeseen events
c) Routine scheduling
d) Financial auditing

b) Emergency backup planning for unforeseen events

Identify the type of planning based on the following below:

• Typically by top management

• Broad guide

Strategic Planning

Identify the type of planning based on the following below:

• Middle management

• One year or less

Tactical Planning

Identify the type of planning based on the following below:

• Lower-level management

• Day-to-day

Operational Planning

Identify the type of planning based on the following below:

• Allows for proactive responses

• Prevents potentially disastrous decisions

Contingency Planning

Establishing how work flows.

Internal Processes

Forming departments, teams, etc.

Grouping Employees

Assigning tasks to competent individuals and coordinating across departments (e.g., marketing, finance, production, HR).

Allocating Resources and Responsibilities. 

The following describes what function of management?

• Internal Processes

• Grouping employees

• Allocating resources and responsibilities

Organizing 

Guiding and influencing behaviors towards organizational goals.

Leading

Providing reasons for people to work in the organization’s best interest.

Motivating

The combined process of leading and motivating, used to coach, counsel, and support employees to increase effectiveness. 

Directing

What are the two types of power managers use to influence?

Formal Power (position-based) and Personal Power (individual characteristics-based)

Power derived from a manager’s formal position in the organization (e.g., supervisor).

Legitimate Power

The ability to influence others by offering desirable rewards such as promotions or raises.

Reward Power

________ power relies on the manager’s ability to grant positive outcomes to employees.

Reward

The power to influence behavior through threats or negative consequences for non-compliance (e.g., pay deduction).

Coercive Power

Legitimate power, Reward power, and Coercive power fall under what kind of power?

Formal power (position-based)

Power derived from specialized knowledge or skills that others value (e.g., accountant).

Expert Power

Power gained through personal traits like honesty and fairness.

Referent Power

Expert power and Referent power fall under what type of power?

Personal Power (individual characteristics-based)

Evaluates and regulates ongoing activities to ensure goal achievement and make adjustments. 

Controlling

What is the process for controlling (3 steps)?

1. Setting Standards: Establishing benchmarks for performance comparison.

2. Measuring Actual Performance: Comparing actual results against set standards.

3. Taking Corrective Action: Adjusting as necessary if performance deviates from standards. This step is repeated until the goal is achieved. 

Controlling is a circular process. Identify which step is being described below? 

• Establishing benchmarks for performance comparison.

Setting Standards

Controlling is a circular process. Identify which step is being described below? 

• Comparing actual results against set standards.

Measuring Actual Performance

Controlling is a circular process. Identify which step is being described below? 

• Adjusting as necessary if performance deviates from standards. This step is repeated until the goal is achieved. 

Taking Corrective Action 

What are the two ways organizations classify managers?

1. Levels within an organization (Hierarchical Structure)

2. Area of Management Specialization (Functional Areas)  

What are the different levels within an organization?

• Top Management (Strategy Group)

• Middle Management (Tactical Group)

• Lower-Level Management (Frontline/Operations Group)

Small group (CEO, COO, CMO). Responsible for overall strategic plans and long-term goals. 

Top Management (Strategy Group)

Division, plant, operations, marketing managers. Develops/implements tactical plans to achieve strategic plans, coordinates/supervises lower-level managers. 

Middle Management (Tactical Group)

Office manager, shift supervisor, foreman. Coordinates/supervises operating employees (those with no direct reports). Often promoted from operating roles. 

Lower-Level Management (Frontline/Operations Group)

Which level of management is primarily responsible for strategic planning?
a) Middle management
b) Top management
c) Elite management
d) Administrative management

b) Top management

________ management focuses on daily operations and has direct contact with employees.

Lower-level

What are the different groups specializing in a particular business function?

• Financial Manager

• Operations Manager

• Marketing Manager

• Human Resources Manager

• Research and Development (R&D)

• Administrative Managers

The following are known as…

• Operations Manager

• Financial Manager

• Marketing Manager

• Human Resources Manager

• Research and Development (R&D)

• Administrative Managers

Functional Areas or Areas of Management Specialization

Identify the functional area group based on the following:

• Accounting, financial analysis, budgeting

Financial Managers

Identify the functional area group based on the following:

• Production planning, production, supply-chain management

Operations Managers

Identify the functional area group based on the following:

• Market research, product management, advertising, sales. 

Marketing Managers

Identify the functional area group based on the following:

• Hiring, training, legal compliance.

Human resources Managers

Identify the functional area group based on the following:

• Coordinates specialized managers across areas. 

Research and Development (R&D)

Identify the functional area group based on the following:

• Provide overall administrative guidance and leadership.

Administrative Managers

What are the three skills successful managers have?

• Conceptual Skills

• Technical Skills

• Interpersonal Skills

Identify the specialized skill successful managers have based on the following: 

• Ability to see the “big picture,” understand how parts fit together, and grasp complex ideas. Essential for thorough analysis and effective decision-making, especially for top management.

Conceptual Skills

Identify the specialized skill successful managers have based on the following: 

• Specific skills needed to perform specialized activates (e.g., engineering, accounting). Crucial for lower level managers (training, guidance) and, to a lesser extent, middle managers.

Technical skills

Identify the specialized skill successful managers have based on the following: 

• Ability to deal effectively with others (inside/outside organizations). Includes relating to people, understanding needs/motives, empathy, compassion, and effective written/verbal communication.

Interpersonal Skills

We know technical skills are needed primarily for lower-level managers and sometimes middle managers. Why (if at all) would a top manager need some technical planning?

Top managers need some technical understanding for realistic planning. 

Which managerial skill is most important for strategic decision-making?
a) Technical
b) Conceptual
c) Interpersonal
d) Physical

b) Conceptual

True or False: Technical skills are most essential for lower-level managers.

True

________ skills involve relating to people and communicating effectively.

Interpersonal

Top managers need very strong _____ and _____ skills. Less reliance on _____ skills, but some knowledge is needed.

Top managers need very strong conceptual and interpersonal skills. Less reliance on technical skills, but some knowledge is needed.

True or False: Middle managers must balance a mix of conceptual and interpersonal, but do not need technical skills whatsoever.

False - they must balance all three skills as they are the bridge between top and lower-level management.

Lower-level managers require very strong _____ and _____ skills. They don’t need as much emphasis on _____ skills.

Lower-level managers require very strong interpersonal and technical skills. They don’t need as much emphasis on conceptual skills.

What are the three primary leadership styles?

• Autocratic Leadership (Authoritarian)

• Participative Leadership (Inclusive)

• Laissez-Faire Leadership (Free-Rein)

The following describes what style of leadership?

• Task oriented, top-down communications. Leader makes decisions, subordinates execute precisely. Low autonomy/empowerment.

Autocratic Leadership (Authoritarian)

The following describes what style of leadership?

• Leaders confer with subordinates, fostering empowerment, understanding, ownership, and commitment. Can be time-consuming. 

Participative Leadership (Inclusive) 

The following describes what style of leadership?

• Leader facilitates subordinates’ success by providing support and resources, allowing autonomy. Best for skilled, self-motivated subordinates. 

Laissez-Faire Leadership (Free Reign)

What are the advantages and disadvantages of autocratic leadership?

Advantages: Fast decisions, unified/consistent vision. Effective when leader as all information or in crises.

Disadvantages: Risk of low morale, stifles creativity.

What are the advantages and disadvantages of participative leadership?

Advantages: Helps teams understand goals, increase commitment.

Disadvantages: Decisions take longer, team may react poorly if input isn’t accepted.

What are the advantages and disadvantages of laissez-faire leadership?

Advantages: Uses full talents of skilled individuals, encourages job satisfaction, innovation, personal growth, reduces need for close oversight. 

Disadvantages: Leaders can lose control, morale can drop if support is inadequate. 

What are the different types of participative leadership (inclusive)?

• Consultative: Discusses issues before making decisions.

• Consensus: Encourages everyone to agree on the best decision. 

• Democratic: Final authority given to the group. 

Which leadership style is best for quick decisions in crisis situations?
a) Democratic
b) Laissez-faire
c) Autocratic
d) Participative

c) Autocratic

True or False: Participative leadership always results in faster decision-making.

False

________ leadership works best when subordinates are skilled and self-motivated.

Laissez-Faire`

What is the analytic decision making process (for familiar situations)?

1. Identify the problem or opportunity: Clearly define the issue.

2. Generate alternatives: Brainstorm possible solutions without immediate evaluation. 

3. Select an alternative: Choose the best option based on criteria. 

4. Implement the solution: Put the chosen alternative into action. 

The analytical decision-making process is most useful when:
a) Problems are new and unfamiliar
b) Situations are familiar and information is available
c) Decisions require no evaluation
d) Managers act intuitively

b) Situations are familiar and information is available

What is the creative decision-making process (for novel or unfamiliar situations)?

1. Identify the problem or opportunity: Similar to analytical, but for unfamiliar situations. 

2. Gather relevant and credible information: Collect as much data as possible. 

3. Incubate: Passively think about the issue and solutions over time, allowing unconscious processing. 

4. Illuminate: The solution spontaneously emerges (“aha” moment), then implement and validate it. 

True or False: The illumination stage in creative decision-making refers to the moment when a solution becomes clear.

True

What are the three steps to making a quality decision?

• Correctly Identify the Problem or Opportunity

• Use Creativity

• Use Structured Analysis to Evaluate Alternatives

Making quality decisions is crucial. Using the “5 Whys” to dig deeper can be used in what step when making quality decisions? 

Correctly Identify the Problem or Opportunity

Making quality decisions is crucial. Identify the step being described when making a quality decision.

• Distinguish symptoms from root causes. Use techniques like the “5 Whys” to dig deeper. Ensures the entire team defines the problem consistently. 

Correctly Identify the Problem or Opportunity

Making quality decisions is crucial. Identify the step being described when making a quality decision.

• Encourage innovative solutions, not just obvious answers. Avoid “satisficing” (accepting the first alternative that meets minimum thresholds). Evaluate alternatives after generating all of them. 

Use Creativity

Making quality decisions is crucial. Identify the step being described when making a quality decision.

• For important decisions, evaluate alternatives against multiple criteria (financial, time, technology, resources) using tools like comparison charts. 

Use Structured Analysis to Evaluate Alternatives

Achieving financial performance, meeting customer needs, providing value, fostering innovation, and securing employee commitment are examples of ________.

Critical Success Factors

What are the 5 critical success factors?

1. Achieving Financial Performance

2. Meeting/Exceeding Customer Needs

3. Providing Value

4. Fostering Creativity and Innovation

5. Securing Employee Commitment

True or False: The Critical Success Factors can be seen as independent factors in which they do not rely on one another. 

False - CSFs are integrative; they affect one another. Ex. Financial performance is often a result of excelling in the other four factors.

Compares the desired outcome with current (actual) performance. Applicable to sales, market share, productivity, quality, diversity goals, employee satisfaction. 

Gap Analysis

Name two analysis tools?

• Gap Analysis

• SWOT Analysis

Gap analysis is primarily used to:
a) Forecast market trends
b) Compare actual results to goals
c) Train new employees
d) Replace SWOT analysis

b) Compare actual results to goals

True or False: SWOT analysis evaluates only external factors affecting the organization.

False - Strengths and Weaknesses are internal whereas Opportunities and Threats are external. 

Analyzing one element can reveal insights into others (e.g., strengths can identify opportunities or help avoid threats; weaknesses can define threats or reveal opportunities if fixed).

SWOT Interconnections

A middle manager needs to make a very important decision for her department, and she is responsible for any outcomes that arise from the decision. She has some but not all of the relevant information. Her subordinates collectively have the information, but none of them have enough to suggest a final decision. What leadership style should she use?

a) participative, consultative

b) participative, consensus

c) autocratic

d) laissez-faire

a) participative, consultative