Management Unit 2

Organizational Culture

System of shared beliefs and values that guide behaviors in an organization.

Culture Fit

A match between the individual, the values, and expectations of the organizational cultures.

Hierarchical Culture

Authority runs system and traditions. They’re predictable and advocate roles and rules.

Entrepreneurial Culture

Authority goes with ideas, creativity, change, and growth.

Rational Culture

Authority serves goals, efficiency, planning and process ideas.

Strong Organizational Cultures

Culture is clear, well-defined, and widely shared by members.

Socialization

Onboarding process where new members learn the culture of the organization.

Observable Culture

The visible way members behave through stories, heros, rituals, and symbols.

Heros

Accomplishments are recognized with praise.

Rituals

Ceremonies and meetings that celebrate accomplishments.

Stories

Told and retold among members about dramatic incidents in the life of an organization.

Symbols

Special use of language and other nonverbal expressions that communicate important themes and values of an organization.

Core Culture

Core values, or underlying assumptions and beliefs that shape and guide people’s behaviors in an organization.

Core Values

Beliefs and values shared by organization members.

Organizational Change

Takes initiative in trying to change the behavior of another person within a social system

Unfreezing

Situation is prepared for change.

Changing

Planned change actually takes place.

Refreezing

Change is stabilized

Improvisational

Adjustments as changes are being implanted.

Force-Coercion Strategy

Pursues change through formal authority and/or use of rewards or punishments.

Rational Persuasion Strategy

Pursues change through empirical data and rational argument.

Shared Power Strategy

Pursues change by participation in assessing change needs, values, and goals.

Strategy

A comprehensive plan guiding resource allocation to achieve long-term organization goals.

Strategic Management

Process of formulating and implementing strategies.

Strategic Analysis

Process of analyzing the organization’s environment and competitive position.

Strategy Formation

Process of crafting strategies to guide the allocation of resources.

Strategy Implementation

Process of putting strategies into action.

Mission

Statement expresses the organization’s research for existence in society.

Operating Objectives

Specific results that the organization’s try to accomplish.

Grow the Stars

Business or products with high market share.

Milk Cash Cows

Business/products in high market shares in low growth markets.

Grow Question Marks

Low-market shares in high-growth markets.

Retrench Dogs

Low-market shares in low-growth markets.

Growth Strategy

Involves expansion of organizations current operation.

Concentration

Growth occurs.

Related Organization

Pursues growth by acquiring new businesses or entering business areas similar to what they already do.

Unrelated Diversification

Organization operates several businesses that are not associated or different from what they already do.

Retrenchment and Reconstructing

Pursue radical changes to solve problems.

Turnaround Strategies

Changes in management, ownership, size, and operations to solve problems.

Chapter 11 Bankruptcy

Under U.S. law, protects a firm from creditors while management reorganizes to restore solvency

Liquidation

A business closes and sells its asset to pay creditors

Downsizing

Strategy decreases size of operation.

Divestiture

Sells of parts of the organization to refocus attention on core business models.

Strategic Alliance

A cooperation agreement with another organization to jointly pursue activities of mutual interest.

Co-operation

A strategy of working with rivals on projects of mutual benefit.

E-Business

Strategic use of the web and mobile apps to gain competitive advantage.

Business to Consumer

A company you can directly buy from- business linked to consumer.

B2B

One business sells to another.

Social Media Strategy

Using social media to engage with an external audience.

Crowdsourcing

Uses web to allow customers to provide opinions on products and designs.

Differentiation

Offers products that are unique and different from the competition.

Cost Leadership

Operate with low cost so that the products can be sold at low prices.

Focused Differentiation

Concentrates on serving a unique market segment better than anyone else.

Focused Cost Leadership

Operates at the lowest cost in a specialized market.

Strategic Leadership

Ability to inspire people to successfully engage in a process of continuous change, performance enhancement, and implement strategies.

1.) Threat of New Entrants

Extent to which new competitors can enter market, based on presence./absence of entry barriers.

2.) Competitive Rivarly

Intensity of rivalry between established firms in industry.

3.) Threat of Substitute Products

Extent to which alternative products/services from other industries may appeal to your customers.

Bargaining Power of Buyers

Extent to which buyers influence market rivals.

5.) Bargaining Power of Suppliers

Extent to which suppliers influence market rivals.

Difference Between 5 forces and SWOT:

5 Forces- Considered a macro tool in business analytics, looks like industry’s economy as a whole.

SWOT- Analysis is a microanalytical tool, focusing on a specific company’s data and analysis.

Technological Competency

Ability to understand new technologies and use them to their best advantage.

Information Competency

Ability to locate, gather, and organize for use in decision making.

Analytical Competency

Evaluate and analyze information to make actual decisions and solve real problems.

5 Criteria to use Data for Decision Making:

On time, high quality, complete (current), relevant (info appropriate for task at hand), and understandable.

Big Data

Exists in huge quantities and is difficult to process without sophisticated mathematical and computing techniques.

Data Mining

Process of analyzing data to produce useful information for decision makers.

Business Intelligence

Taps information systems to extract and report data in organized ways that are helpful to decision makers.

Data Visualization

Executive dashboards present visualizations of key performance indicators on a real-time basis.

Problem Avoiders

Ignore information indicating a performance opportunity or threat.

Problem Seekers

Constantly process information looking for problems to solve.

Decision-Making Process

1.) Define problem 2.) Evaluate alternative solution 3.)Choose preferred course of action 4.) Implement decision 5.) Evaluate results

Classical Decision Model

Decisions made with complete information.

Realistic Decision Model

Emphasizes critical thinking that is informed by science and the broadest possible base of reliable information.

Behavioral Decision Model

Decision making with limited information and bounded rationally.

Optimizing Decison

Choosing the alternative giving the best solution to problem.

Satisficing Decision

First alternative that offers a satisfactory resolution likley to be chosen.

Evidence-Based

Makes choices grounded in empirical analysis of information and empirical data gathered from credible sources.

Bounded Rationality

Constraints of limited information and alternatives.

Realist Rationality

Recognizes human limitations and biases but addresses them through in-depth analysis.

Heuristics

Strategies for simplifying decision making.

Framing Error

Trying to solve a problem in the context

Availability Bias

Bases a decision on recent information or events.

Representation Bias

Bases a decision on similarity to other situations.

Anchoring/ Adjustment Bias

Bases decision on incremental adjustments from a prior decision point.

Confirmation Error

Occurs when focusing only on information that confirms a decision already made.

Escalating Commitment

The continuation of a course action even though it is not working.

Entrepreneurship

Risk-taking behavior that results in new opportunities.

Classic Entrepreneur

Willing to pursue opportunities in situations others view as problems or threats.

Serial Entrepreneur

Start and run businesses and nonprofits over and over again, moving from one interest and opportunity to the next.

Social Entreprenur

Create and pursue business models that are driven by a social mission, not just financial gain.

Internal Locus of Control

In control of own destiny and are self-directing.

High Energy Level

Persistent, hardworking, and willing to exert extraordinary efforts to succeed.

Self-Confidence

Feel competent, believe in themselves, and willing to make decisions.

Tolerance for Ambiguity

Risk takers and tolerate situations with high degrees of uncertainty.

Self-Reliance

Becoming your own boss and not work for others.

High Need for Achievement

Motivated to accomplish challenging goals, they thrive on performance feedback.

Flexibility

Willing to admit problems and errors and are willing to change a course of action when plans aren’t working.

Passion and Action Oriented

Try to act ahead of problems they want to get things done and not waste valuable time.

How many percent of businesses fail within the first five years?

50%