Final exam study guide for principles of management

purpose of planning- four key reasons

provides direction, reduces uncertainty, minimizes waste and redundancy, establishes the goals and standards for controlling.

strategic vs operational plans

strategic vs operational plans- strategic plans are plans that apply to the entree organization and establish the organizations overall goal while operational plans are plans that encompass a particular area of the organization.

long term vs short term plans

long term plans are plans with a time frame beyond 3 years while short term plans are plans that are within a year.

specific vs directional plans

specific plans are plans that are clearly defined and leave no room for interpretation while directional plans are plans that are flexible and set out general guidelines

single use vs standing plans

single use pans are a one time plan specifically designed to meet the needs of a unique situation while standing plans are ongoing plains that provide guidance for activities that performed repeatedly (regularly).

planing is influenced by

organizational level- all departments within a company

environmental uncertainty- if outside environment (market, economy, competitors) is unpredictable, plans must stay flexible. When things are stable and predictable, plans can be more detailed and rigid.

length of future commitments- plans should match how far into the future the commitment goes. If if your making long term investments (building new factory), you need a long term plan. If its a short project ( 3 month marketing campaign), you only need a short term plan.

differences between traditional objective setting and management by objectives (MBO)

traditional Objective Setting:Goals are decided only by top managers. They pass these goals down the chain, and each department or team just gets a smaller piece of the overall goal. Lower levels don't really have input — they just follow what's handed to them.

Management by Objectives (MBO):Goals are set together by managers and employees. Everyone agrees on what the goals should be. These agreed goals then flow down through the organization. Also, employee performance is later judged based on how well they achieved these goals.

why plans should be specific but flexible

specific plans give clear direction, but flexibility allows quick adjustments when unexpected changes happen. without flexibility, rigid plans can fail in dynamic environments.

the role of lower level managers in planning

lower level managers help set practical goals and create detailed plans. since they are closer to daily operations, their input makes plans more realistic and adaptable.

adapting plans to rapid environmental change

managers should continusously monitor the environment, update plans quickly, reallocate resources, and adjust priories to stay aligned with new conditions.

Six steps of the strategic management process

identify current mission, goals, and strategies

conduct an external analysis- They examine outside factors like competitors, market trends, and economic conditions to identify opportunities and threats. (opportunities and threats)

connect and internal analysis- They assess the organization's resources, capabilities, and core competencies to identify strengths and weaknesses.

formulate strategies - They create plans at corporate, business, and functional levels to position the organization for success based on the internal and external analysis.

implement strategies - They put the formulated strategies into action by allocating resources, assigning responsibilities, and leading change throughout the organization.

evaluate results- They assess outcomes, measure performance, and make adjustments to strategies if goals are not being met or conditions have changed.

SWOT analysis

strengths and weaknesses (Internal)

strengths- Strengths are internal capabilities or resources that give an organization an advantage over competitors.

weaknesses- Weaknesses are internal limitations or problems that put an organization at a disadvantage compared to others.

opportunities and threats (external)

opportunities- Opportunities are external factors or trends that an organization can exploit to its advantage.

threats- Threats are external challenges or risks that could harm an organization's performance or competitiveness.

three types of corporate strategies

growth- expansion through new products, markets, or acquisitions (vertical/horizontal integration, diversification)

stability- maintaining the status quo and focusing on current operations

renewal- addressing declining performance through retrenchment or turnaround

know the four quadrants of the Boston consulting group (big) matrix

Stars (high growth, high market share)

Cash Cows (low growth, high share)

Question Marks (high growth, low share)

Dogs (low growth, low share)

Understand the role of competitive advantage (what makes a company unique and able to outperform rivals).

competitive advantage can stem from quality, low cost, technology, and other factors.

porters three generic strategies

cost leadership- compete on price by being the lowest- cost producer

differentiation- compete on unique features, quality, or service

focus- serve a niche market more effectively than broader competitors

1. Six Key Elements of Organizational Design

work specialization- divide tasks into separate jobs to improve efficiency. repetitive tasks allow employees to develop expertise, leading to faster and more precise work. Potential Downsides is that excessive specialization can lead to boredom, fatigue, and reduced job satisfaction

departmentalization- group jobs by function, geography, product, process, or customer.

chain of command- clarifies reporting relationships; includes authority, respsobility, and unity of command

span of control- the number of employees a manager can efficiently oversee.

centralization vs decentralization- where decision making power lies in the organization

formalization- the extent to which rules, procedures, and job descriptions are written and enforced.

organizational structure- departmentalization types

functional- grouped by job function ( hr, marketing)

geographic- grouped by location or region

product- grouped by product line or service category

process- grouped by steps in a workflow (e.g., manufacturing stages)

customer- grouped by customer type or segment (e.g., small business, retail clients).

organizational structures- mechanistic vs organic structures

Mechanistic: Rigid, formal, hierarchical, clear rules, centralized.

Organic: Flexible, decentralized, adaptable, collaborative.

Know which structure fits best in stable vs. uncertain environments.

organization structure- Know the factors that determine whether a mechanistic or organic design is best:

Strategy: Structure should support strategic goals.

Size: Larger organizations tend to be more formalized, but not always more hierarchical.

Technology: Unit production (Organic), Mass production (Mechanistic), and Process production (Organic)

Environmental uncertainty: The more dynamic the environment, the more organic the structure should be.

organizational structures- Work-Life Flexibility & Contemporary Designs

Telecommuting: Working remotely using digital tools.

Flextime: Flexible scheduling within required hours.

Compressed workweek: Working full-time hours in fewer days.

Job sharing: Two employees share one full-time job.

Managing Human Resources- Understand why HRM is strategic:

It contributes to competitive advantage.

It supports organizational performance and success.

It affects how employees are treated, developed, and retained.

Managing Human Resources- Recruitment and Selection

Recruitment: Attracting qualified candidates using job ads, referrals, university recruiting, etc.

Decruitment: Reducing the workforce through layoffs, early retirements, or transfers.

Selection: Using interviews, tests, and background checks to choose the best candidate.

Work sample tests and realistic job previews help reduce turnover by aligning expectations

Managing Human Resources- Orientation and Training

Organization orientation: Covers company values, policies, history.

Work unit orientation: Focuses on team roles and specific job expectations.

Training types: Professional development

Management and compliance training

Online and traditional methods

Managing Human Resources- Performance Evaluation and Compensation

Feedback, development, promotion, and compensation decisions.

Managing Human Resources- Career Development Trends

Two key trends: Lifelong learning: Organizations support continuous education (e.g., tuition reimbursement).

Internships: Allow employers to assess potential without full-time commitment.

Managing Human Resources- Contemporary HR Issues

Understanding and Managing Individual Behavior- Organizational behavior (OB) basics

the study of the actions ofpeople at work. study of individual, group, and organization dynamics in the workplace.

goal of OB: improve productivity, reduce absenteeism and turnover, encourage organization citizenship behavior (ocb), and minimize counter productive behavior

Employee productivity: a performance measure ofboth efficiency and effectiveness

Absenteeism: the failure to show up for work

Turnover: the voluntary and involuntary permanent with drawl from an organization

Organizational citizenship behavior (OCB):discretionary behavior that is not part of an employee's formal job requirements, but which promotes the effective functioning of the organization

Counterproductive workplace behavior: any intentional employee behavior that is potentially damaging to the organization or to individuals within the organization

Understanding and Managing Individual Behavior- attitudes and job performance / key workplace attitudes

job satisfaction- an employee's general attitude toward his or her job

job involvement- the degree to which an employee identifies with his or her job, actively participates in it, and considers his or her job performance to be important to self-worth

organizational commitment- the degree to which an employee identifies with a particular organization and its goals and wishes to maintain membership in that organization

Employee engagement: when employees are connected to, satisfied with, and enthusiastic about their jobs (goes beyond satisfaction- shows passion and commitment)

understanding and managing individual behavior - Cognitive Dissonance

Discomfort arises from inconsistencies between attitudes or between attitudes and behavior.

Individuals try to reduce dissonance by aligning beliefs and actions.

understanding and managing individual behavior- Perception and Attribution

Perception: How people interpret their environment.

Attribution theory: We judge behavior based on internal (personal) vs. external (situational) factors

Fundamental attribution error: Overestimating internal causes. Self-serving bias: Success = me; failure = external factors. the tendency tounderestimate the influence of external factors and tooverestimate the influence of internal or personal factors

define motivation

Motivation: the process by which a person's efforts areenergized, directed, and sustained toward attaining a goal

Hierarchy of needs theory:

Maslow's theory that humanneeds—physiological, safety, social, esteem, and self-actualization—form a sort of hierarchy

McGregor's Theory X and Theory Y

Theory X: the assumption that employees dislike work, arelazy, avoid responsibility, and must be coerced to perform

Theory Y: the assumption that employees are creative,enjoy work, seek responsibility, and can exercise self-direction

Herzberg's Two-Factor Theory

Two-factor theory (motivation-hygiene theory): the motivation theory that intrinsic factors are related to job satisfaction and motivation, whereas extrinsic factors are associated with job dissatisfaction

Motivators (intrinsic): cause satisfaction (e.g., achievement).

Hygiene factors (extrinsic): prevent dissatisfaction (e.g., pay).

Goal-setting theory:

the proposition that specific goals increase performance and that difficult goals, when accepted, result in higher performance than do easy goals

Specific and difficult goals lead to better performance.

Feedback and commitment enhance motivation.

reinforcement theory

Behavior is controlled by consequences (rewards or punishment).

the theory that behavior is afunction of its consequences

equity theory/ distributive justice and procedural justice

People compare their input-output ratio to others'.

The theory that an employee compares his or her job's input-outcomes ratio with that of relevant others and then corrects any inequity

distributive justice- perceived fairness of the amount andallocation of rewards among individuals

procedural justice- perceived fairness of the process used to determine the distribution of rewards

expectancy theory

motivation= expectancy x instrumentality x valence

the theory that an individual tends toact in a certain way based on the expectation that the actwill be followed by a given outcome and on theattractiveness of that outcome to the individual

People will be motivated if they believe:

Their effort will lead to good performance, Performance will lead to outcomes,

The outcomes are valued.

Trait theories

Tried (unsuccessfully) to identify characteristics that make great leaders.

traits probably play a small role in leadership.

Behavioral theories

leadership theories that identify behaviors that differentiate effective leaders from ineffective leaders

University of Iowa Studies

Autocratic style: a leader who dictates work methods, makes unilateral decisions, and limits employee participation

Democratic style: a leader who involves employees indecision making, delegates authority, and uses feed back as an opportunity for coaching employees

Laissez-faire style: a leader who lets the group make decisions and complete the work in whatever way it sees fit

Ohio State Studies

Initiating structure: the extent to which a leader defines his or her role and the roles of group members in attaining goals

Consideration: the extent to which a leader has work relationships characterized by mutual trust and respect for group members' ideas and feelings

High-high leader: a leader high in both initiating structure and consideration behaviors

Michigan Studies

Two dimensions of leadership:-

Employee oriented- build strong relationship with team members.

Production oriented- focus on results. concentrate on productivity and work is completed In efficiency.

Fiedler's Contingency Model:

a leadership theory proposing that effective group performance depends on the proper match between a leader's style and the degree to which the situation allows the leader to control and influence

Leadership effectiveness depends on the match between style and situation.

Situational factors: leader-member relations, task structure, position power.

Leader-member relations: describes the degree of confidence, trust, and respect employees have for their leader

Task structure: describes the degree to which job assignments are formalized and structured

Position power: describes the degree of influence a leader has over activities such as hiring, firing, discipline, promotions, and salary increases

Hersey and Blanchard's Situational Leadership Style

Leaders adapt their style based on followers' ability and willingness (readiness).

SLT theory

Situational leadership theory (SLT): a leadership

contingency theory that focuses on followers' readiness•

Readiness: the extent to which people have the ability and willingness to accomplish a specific task

Situational Leadership Style

Telling (high task-low relationship)• the leader defines roles and tells people what, how, when, and where to do various tasks.

Selling (high task-high relationship)• the leader provides both directive and supportive behavior

Participating (low task-high relationship)• the leader and follower share in decision making. main role is facilitating and communicating.

Delegating (low task-low relationship). leader provides little support and direction

four stages of followers readiness

R1- both unable and unwilling- people are unwilling to take responsibility for doing something or a specific task.

R2 unable but willing- people aren't competent or confident but willing to do the job

R3- able but unwilling- followers are competent but not willing to do the task

R4- people are willing and and able to do what is asked of them.

Four Styles of Situational Leadership

telling

selling,

participating

delegating

Path-goal theory

a leadership theory that says the leader's job is to assist followers in attaining their goal sand to provide direction or support needed to ensure that their goals are compatible with the goals of the group or organization

Leader's role: help followers reach goals.

Four Leadership Behaviors•

Directive leader

Supportive leader

Participative leader

Achievement-oriented leader

Leader-member exchange theory

the leadership theory that says leaders create in-groups and out-groups and those in the in-group will have higher performance ratings, less turnover, and greater job satisfaction

Leaders form in-groups and out-groups; in-group members receive more support and responsibility.

Transactional leaders:

Use rewards and punishments to manage performance.

leaders who lead primarily byusing social exchanges (or transactions)

Transformational leaders:

Inspire and stimulate followers to exceed expectations.

leaders who stimulate and inspire (transform) followers to achieve extraordinary outcomes

Charismatic leaders

Influence through vision, energy, and personal appeal.

Authentic leadership

Self-aware, ethical, consistent with values

leaders who know who they are, know what they believe in, and act on those values and beliefs openly and candidly

Ethical leadership:

Focuses on doing what's right and holding others accountable.

An ethical leader puts public safetyahead of profits, holds culpable employees accountable,and creates a culture in which employees feel that theycould and should do a better job.

Servant leadership:

Focuses on developing others and meeting follower needs.

go beyond their own self-interest andfocus on helping followers grow and develop.

Legitimate power

the power a leader has as a result ofhis or her position in the organization

Coercive power:

the power a leader has to punish orcontrol

Reward power:

the power a leader has to give positive rewards

Expert power

power that's based on expertise, specialskills, or knowledge

Referent power

power that arises because of a person'sdesirable resources or personal traits

Feedforward control:

Before work begins (e.g., employee training)

control that takes place before awork activity is done

Concurrent control:

During the work process (e.g., supervision, real-time monitoring)

control that takes place while a work activity is in progress

Feedback control

After the work is completed (e.g., performance reviews)

control that takes place after a work activity is done

Organizational productivity:

the amount of goods or services produced divided by the inputs needed to generate that output

output/ input

Organizational effectiveness

How well goals are achieved

a measure of how appropriate organizational goals are and how well those goals are being met

Tools for measuring performance- financial controls

Ratio analysis: Liquidity, profitability, activity, leverage

Budget analysis Quantitative standards Deviations

Management information system (MIS)

deliver timely, accurate data for decision-making

a system used to provide management with needed information on a regular basis

Balanced Scorecard

Measures performance in four areas: financial, customer, internal processes, and learning/growth

a performance measurement tool that looks at more than just the financial perspective

benchmarking

comparing organizational practices and performance to the best in class (industry leaders or internal bests)

a performance measurement tool that looks at more than just the final perspective.