EXAM 2 STUDY AID - MNGT 3810

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Know the three principles underlying strategic positioning.

1. Strategy is the Creation of a Unique and Valuable Position

2. Strategy Requires Trade-Offs in Competing

3. Strategy Involves Creating a "Fit" among Activities

Know the levels of strategy (corporate, business, functional)

Corporate: Focuses on the organization as a whole

Business: Focuses on individual business units or product/service lines

Functional: Plan of ­action by each functional area of the organization to support higher level strategies

Know the five steps in the strategic-management process.

1. Establish the Mission, Vision, and Values

2. Assess the Current Reality

3. Formulate the Strategies and Plans

4. Implement the Strategies and Plans

5. Maintain Strategic Control: The Feedback Loop

Explain how an organization assesses the competitive landscape.

Identifying Competitors, Analyze Competitors, SWOT analysis, Porter's Five Forces, Monitoring Market Trends, Customer Feedback, Benchmark Performance

SWOT

1. Also known as a situational analysis, the search for the Strengths, Weaknesses, Opportunities, and Threats affecting the organization

VRIO

1. Is a framework for analyzing a resource of capability to determine its competitive strategic potential by answering four questions about its Value, Rarity, Imitability, and Organization

Know the three types of corporate-level strategy.

Growth Strategy: One of three grand strategies, this strategy involves expansion—as in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served

Stability Strategy: One of three grand strategies, this strategy involves little or no significant change

Defensive Strategy: Also called retrenchment strategy, one of three grand strategies, this strategy involves reduction in the organization’s efforts

BCG Matrix

1. A management strategy by which companies evaluate their strategic business units on the basis of (1) their business growth rates and (2) their share of the market

Diversification strategy

Strategy by which a company operates several businesses in order to spread the risk

Five competitive forces

1. threats of new entrants

2. bargaining power of suppliers

3. bargaining power of buyers

4. threats of substitute products or services,

5. rivalry among competitors

Four generic competitive strategies

Cost Leadership (WIDE): keeping the costs, and hence prices, of a product or service below those of competitors and to target a wide market

Differentiation (WIDE): offering products or services that are of unique and superior value compared with those of competitors but to target a wide market

Cost-Focus (NARROW): keeping the costs, and hence prices, of a product or service below those of competitors and to target a narrow market

Focused-Differentiation (NARROW): offering products or services that are of unique and superior value compared to those of competitors and to target a narrow market

Decision making

The process of identifying and choosing alternative courses of action

Know the two kinds of decision making

Rational Decision Making: Also called the classical model; the style of decision making that explains how managers should make decisions; it assumes that managers will make logical decisions that are the optimal means of furthering the organization’s best interests

Non-Rational Decision Making: Models of decision-making style that explain how managers make decisions; they assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimum

Stages of rational decision making

1. Identify the Problem or Opportunity - Determining the Actual versus the Desirable

2. Think Up Alternative Solutions - Both the Obvious and the Creative

3. Evaluate Alternatives and Select a Solution - Ethics, Feasibility, and Effectiveness

4. Implement and Evaluate the Solution Chosen

Know how managers can make decisions that are both legal and ethical.

A Decision Tree: Graph of decisions and their possible consequences, used to create a plan to reach a goal → used to aid in making decisions, especially when there is uncertainty.

Know how evidence-based management and business analytics contribute to decision making.

Evidence Based Management: The process of gathering and analyzing high-quality data to develop and implement a plan of action

Descriptive Analytics: Identifies trends and relationships within big data

Predictive Analytics: Combines historical data with statistical models and machine learning to specify the likelihood of future outcomes

Main Idea: Evidence-based management improves decision making by using high-quality data to guide actions and strategies. Business analytics supports this process by using descriptive analytics to identify trends and patterns in data and predictive analytics to forecast future outcomes. Together, they help managers make informed, data-driven decisions rather than relying on guesswork.

Know how artificial intelligence is used in decision making.

Automate: (Robotic AI)

Analyze (Biometric AI)

Advise: (Conversational AI)

Anticipate: (Algorithmic AI) 

Main Idea: AI enhances decision making by automating work, analyzing information, offering advice, and anticipating what is likely to happen next.

Know the four decision-making styles.

Directive Style: Action Oriented Decision Makers who Focus on Facts

Analytical Style: Careful Decision Makers Who Like Lots of Information and Alternative Choices

Conceptual Style: Decision Makers Who Rely on Intuition and Have a Long-Term Perspective

Behavioral Style: The Most People-Oriented Decision Makers

Know barriers to rational decision making and ways to overcome them.

Rational decision making can be limited by lack of information, biases, commitment to bad decisions, and time pressure. Managers can overcome these barriers by using data, seeking diverse perspectives, and objectively evaluating their choices.

Know the basics of group decision making.

1. Less Efficient

2. Size Affects Decision Quality

3. May be too Confident

4. Knowledge Counts → Group members actually need to know the relevant issues

Group decision making is more effective when members feel that they can freely and safely disagree with each other. → Minority dissent.

Explain why managers need to align organizational culture, structure, and HR practices to support strategy.

A strategy is more likely to succeed when the organization's culture, structure, and HR practices support it. When these elements are aligned, employees understand expectations, work efficiently, and contribute to achieving organizational goals.

Organizational culture

The Shared Assumptions That Affect How Work Gets Done

Organizational Structure

A formal system of task and reporting relationships that coordinates and motivates an organization's members so that they can work together to achieve the organization's goals

Human resource practices

Consist of all of the activities an organization uses to manage its human capital, including staffing, appraising, training and development, and compensation

Know the three levels of organizational culture

1. Observable Artifacts - Physical Manifestations of Culture

2. Espoused Values - Explicitly Stated Values and Norms

3. Basic Assumptions - Core Values of the Organization

Know the four types of organizational culture

Clan: culture that has an internal focus and values flexibility rather than stability and control

Adhocracy: culture that has an external focus and values flexibility

Market: culture that has a strong external focus and values stability and control

Hierarchy:  has an internal focus and values stability and control over flexibility

Explain how to characterize an organization’s culture.

An organization's culture is the shared way people think, act, and work within the company. It can be described by characteristics such as innovation, teamwork, results orientation, and stability, which influence employee behavior and organizational success.

Know the process of culture change in an organization.

Formal Statements, Slogans and Sayings, Rites and Rituals, Stories/Legends/Myths, Leader Reaction to Crisis, Role Modeling/Training/Coaching, Physical Design, Rewards/Titles/Promotions/Bonuses, Organizational Goals and Performance Criteria, Measurable and Controllable Activities, Organizational Structure, Organizational Systems and Procedures.

MAIN IDEA: Culture change happens when leaders consistently communicate, model, reward, and build systems around the values and behaviors they want employees to adopt.

Know the major features of an organization and explain how they are expressed in an organization chart.

1. Common Purpose: The Means for Unifying Members

2. Coordinated Effort: Working Together for Common Purpose

3. Division of Labor: Work Specialization for Greater Efficiency

4. Hierarchy of Authority: The Chain of Command

5. Span of Control: Narrow (or tall) versus Wide (or flat) → The number of people reporting directly to a given manager

6. Authority: Accountability, Responsibility, and Delegation

7. Centralization Versus Decentralization of Authority

Know the eight types of organizational structure.

Traditional Designs: 

1. Simple: whereby an organization has authority centralized in a single person, as well as a flat hierarchy, few rules, and low work specialization

2. Functional: whereby people with similar occupational specialties are put together in formal groups

3. Divisional: whereby people with diverse occupational specialties are put ­together in formal groups according to products and/or services, customers and/or clients, or geographic regions

4. Matrix: which combines functional and divisional chains of command in a grid so that there are two command structures vertical and horizontal

The Horizontal Design: 

- Eliminating Functional Barrier to Solve Problems

5. Horizontal Structure: Also called a team-based design, teams or workgroups, either temporary or permanent, are used to improve collaboration and work on shared tasks by breaking down internal boundaries

Designs That Open Boundaries Between Organizations: 

6. Hollow: Often called network structure, structure in which the organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster

7. Modular:  in which a firm assembles product chunks, or modules, provided by outside contractors

8. Virtual: An organization whose members are geographically apart, usually working with e-mail, collaborative computing, and other computer connections

Person-organization fit

The extent to which your personality and values match the climate and culture of an organization

Strategic Human Resource management

Consists of the process of designing and implementing systems of policies and practices that align an organization's human capital with its strategic objectives

Human resource management

The activities managers perform to plan for, attract, develop, and retain a workforce

Talent management

Approach to strategic HRM that matches high-potential employees with an organization's most strategically valuable positions

High performance work systems

Approach to strategic HRM deploys bundles of internally consistent HR practices in order to improve employee ability, motivation, and opportunities across the entire organization

Know the importance of strategic human resource management.

Strategic Human Resource Management is important because it aligns people with the organization's strategy. By hiring, developing, and rewarding employees effectively, SHRM helps the organization achieve its goals and gain a competitive advantage.

Know ways to recruit and hire the right people.

The task of choosing the best person is enhanced by such tools as reviewing candidates' background information, conducting interviews, and screening with employment tests.

Outline common forms of compensation.

Payment comprising three parts: (base pay) wages or salaries, incentives, and benefits

Know the processes used for onboarding and learning and development.

Onboarding: Programs that help employees to integrate and transition to new jobs by making them familiar with corporate policies, procedures, culture, and politics by clarifying work-role expectations and responsibilities

L and D: The process is to fill the gaps that exist between what employees currently know and what they need to know.

Discuss effective performance management and feedback techniques.

Performance Management: Set of processes and managerial behaviors that involve defining, monitoring, measuring, evaluating, and providing consequences for performance expectations. → Can foster positive employee attitudes, higher performance, and better customer service.

Feedback: 

1. Take a problem-solving approach, avoid criticism, and treat employees with respect

2. Be specific and direct in describing the employee’s current performance and in identifying the improvement you desire. 

3. Get the employee’s input

4. Follow Up

List guidelines for handling promotions, transfers, discipline, and dismissals.

Promotion: Fairness, Discrimination (should not discriminate on the basis of sex, national origin, age, disability, or membership in any other protected class), Be Aware of Other’s Resentments. 

Transfers: four principle reasons

1. To solve organizational problems by deploying their skills at another location

2. To broaden their experience by assigning them to a different position

3. To retain their interests and motivation by presenting them with new challenges

4. To solve employee problems such as personal conflicts with co-workers or supervisors. 

Discipline: Managing Demotion

1. Base demotion decisions on unbiased, well-documented evidence

2. Communicate the organization’s desire to retain the employee.

3. Be honest about performance-related issues that led to the demotion.

Dismissals: Three categories

1. Layoffs: suggests a person has been dismissed temporarily

2. Downsizing: permanent dismissal, discontinuing of a line need to let employees go

3. Firings: dismisses permanently “for cause”

Know legal considerations managers should be aware of (don’t need to know any years)

Labor Relations: Privacy Act, Immigration Reform and Control Act, Sarbanes-Oxley Act

Compensation and Benefits: Employee Retirement Income Security Act, Family and Medical Leave Act, Health Insurance and Portability and Accountability Act (HIPPA), Fair Minimum Wage Act.

Health and Safety: Occupational Safety and Health Act (OSHA), Consolidated Omnibus Budget Reconciliation Act (COBRA), Patient Protection and Affordable Care Act

Equal Employment Opportunity: Equal Pay Act, Civil Rights Act Title VII, Age Discrimination in Employment Act (ADEA), Americans with Disabilities Act (ADA), Civil Rights Act

Know what managers should know about organizational change.

1. The marketplace is becoming more segmented and moving toward more niche products

2. More competitors are offering targeted products, requiring faster speed-to-market

3. Some traditional companies may not survive radical change

4. Offshore suppliers are changing the way we work

5. Knowledge, not information, is becoming the new competitive advantage

6. The employment landscape is shifting, affecting both companies and workers

Reactive Change: Change made in response to problems or opportunities as they arise; compare proactive change

Proactive Change: Planned change; making carefully thought-out changes in anticipation of possible or expected problems or opportunities; opposite of reactive change

Know three forms of change, Lewin’s change model, and the systems approach to change.

Least Threatening → Adaptive Change: Reintroduction of a familiar practice

Somewhat Threatening → Innovative Change: The introduction of a practice that is new to the organization

Very Threatening → Radically Innovative Change: Introduces a practice that is new to the industry

Lewin’s Change Model: Unfreezing, Changing, and Refreezing

1. Unfreezing: Creating the motivation to change

2. Changing: Learning new ways of doing things

3. Refreezing: Making the new ways normal

Systems Approach to Change: Presupposes that any change, no matter how small, has a rippling effect throughout an organization.

Causes of resistance to change

1. Employee Characteristics

2. Change Agent Characteristics

3. Change Agent → Employee Relationship

People resist change when they fear uncertainty, loss, or disruption to their routines. Clear communication, employee involvement, and support can help reduce resistance and make change more successful.

Know the purpose of organizational development and the process.

Organizational Development: Set of techniques for implementing planned change to make people and organizations more effective

Three Steps:

1. Diagnosis

2. Intervention

3. Evaluation

Know the approaches toward innovation and components of an innovation system.

The type of innovation

The focus of innovation

Can an innovation go too far?

Components of an innovation system: An innovation system combines strategy, people, culture, knowledge, processes, resources, leadership, and rewards to create and implement new ideas. These components work together to help an organization stay competitive and adapt to change.

Know ways managers can help employees overcome fear of change.

Managers can help employees overcome fear of change by communicating openly, involving them in the process, providing training and support, and building trust. When employees understand and feel included in the change, they are more likely to accept it.

Know the importance of personality and individual traits in the hiring process.

Big Five Personality Dimensions: 

1. Extroversion: How outgoing, talkative, sociable and assertive a person is.

2. Agreeableness: How trusting, good-natured, cooperative, and soft-heartened someone is.

3. Conscientiousness: How dependable, responsible, achievement-oriented, and persistent someone is.

4. Emotional Stability: How related, secure, and unworried a person is.

5. Openness to experience: How intellectual, imaginative, curious, and broad-minded someone is

Managers consider personality and individual traits during hiring because they affect how employees perform, interact with others, and fit within the organization. Hiring people whose traits match the job and company culture increases the likelihood of success.

Understand the effects of values and attitudes on employee behavior.

Values: What are your consistent beliefs and feelings about all things?

Attitudes: What are your consistent beliefs and feelings about specific things?

Employees' values and attitudes affect how they think, feel, and act at work. Positive values and attitudes generally lead to higher job satisfaction, better performance, stronger teamwork, and lower turnover.

Understand the way perception can cloud judgement.

Perception: Awareness; interpreting and understanding one’s environment

Five Distortions in Perception: 

1. Stereotyping: “Those sorts of people are pretty much the same”

2. Implicit Bias: “I don’t really think I’m biased, but I just have a feeling about some people”

3. The Halo Effect: “One trait tells me all I need to know”

4. The Recency Effect: “The most recent impressions are the ones that count”

5. Causal Attributions: The activity of inferring causes for observed behavior

Perception can cloud judgment when people allow biases, assumptions, or incomplete information to influence their decisions. Being aware of these biases and relying on objective evidence can help managers make fairer and more accurate judgments.

Know how managers can deal with employee attitudes.

Increasing Employee Engagement:

- Design Meaningful work, improve supervisor-employee relations, provide learning and development opportunities, reduce stressors.

Managers can improve employee attitudes through communication, recognition, support, involvement, and a positive work environment. Positive attitudes lead to higher motivation, better performance, and stronger organizational commitment.

Know trends in workplace diversity that managers should be aware of.

Increasing Cultural and Ethnic Diversity: Workforces include people from many backgrounds and cultures.

Generational Diversity: Multiple generations work together, often with different values and work styles.

Gender Diversity: More emphasis on gender equality and inclusion.

Globalization: Employees increasingly work with people from different countries and cultures.

Diversity of Perspectives and Experiences: Organizations value different viewpoints to improve creativity and problem-solving.

Inclusion and Equity Initiatives: Greater focus on creating workplaces where all employees feel valued and respected.

Know the sources of workplace stress and ways to reduce it.

Stress Process: Demands → Appraisal → Coping → Outcomes

Reducing Stress:

1. Build Resilience

2. Roll out Employee Assistance Programs

3. Recommend a holistic wellness approach

4. Create a supportive environment

5. Make jobs interesting

6. Make career counseling available