Principles of Management Chapters 1-3

Exam 1

T-shaped Managers

Deep expertise in a specific area (the vertical stroke) and a broad understanding and ability to collaborate across multiple disciplines (the horizontal stroke)

Coopetition

Simultaneous competition and cooperation among companies with the intent of creating value.

Competitive Advantage aspects

Innovation, quality, service, speed, cost competitiveness, sustainability.

Management

The process of working with people and resources to accomplish organizational goals.

Four Functions of Management

Planning, Organizing, Leading, and Controlling

Middle Level Managers

Break down company objectives into business unit targets, while also maintaining a working knowledge of problems and opportunities (ex: district manager).

Three Broad Skill Categories for Managers

1. Technical

2. Conceptual & Decision

3. Interpersonal & Communication

What is important earlier in career and then more important later on

Initially technical skills, but later conceptual/decision

Specialist

Focused expertise in a specific field.

Generalist

a broad range of skills across multiple disciplines

What is intentional vs organic

Competitive Advantage is intentional, while comparative advantage is organic.

Four ongoing challanges in the business landscape

Globalization, Technological Change, Knowledge Management, Collaboration

Social Entrepreneur

Someone who pursues profit and social good equally.

How is management an art, a science, or a craft?

Science: Uses theories, data, and analytical methods to solve problems.

Art: Uses communication, creativity, intuition, and empathy to motivate people.

Craft: Learned through experience, context, and the skillful application of both art and science.

How does an NBA coach demonstrate functions of management?

Planning through analyzing players’ strengths and weaknesses before the game. Organizing by allocating resources to the team. Leading by motivating and communicating with the team. Controlling by measuring performance and taking corrective action.

Open System

Stakeholders in the community adapt to feedback. Universities.

Closed System

Operating in a vacuum. Monopoly or research organization.

External

Forces outside a firm’s boundaries (competitors, customers, government, economy).

Internal Environment

Culture, Values, Climate

Macroenvironment

Affects all organizations. Economy, technology, legal, demographics, natural environment.

Porter’s Five Forces

Suppliers, Competitors, Threat of New Entry, Substitutes, Customers

Strategic Maneuvering

Adapting to change and putting yourself in a better competitive position.

Strong Organizational Culture

Majority of people within the organization agree on organizational goals.

Weak Organizational Culture

Different people hold different values and there is confusion about corporate goals.

What three aspects are part of a company’s internal environment & organizational culture?

Mission, Vision, Values

Intermediate Consumers

Buy raw or wholesale to sell to final customers. They engage in business-to-business (B2B) sales.

Environmental Uncertainty

Not having enough information to predict the future.

Environmental Complexity

The number of issues to which a manager must attend.

Environmental Dynamism

The degree of discontinuous change occurring.

Environmental Scanning

Searching for useful info and interpreting what’s important

Scenario Development

Depict possible futures

Forecasting

A single prediction about the future.

Benchmarking

Comparing your process to other companies.

Divestiture

The action or process of selling off subsidiary business interests or investments.

Independent Action

Competitive Aggression, Public Relations, Legal Action

Cooperative Action

Contracting, Co-optation (absorbing a group into leadership), Coalition

Managers face difficulty in making decisions because

1. Lack of structure.

2. Conflict

3. Uncertainty

4. Risk

Programmed Decisions

Common problems that are structured, you’ve done it before.

Nonprogrammed Decisions

New, novel, complex decisions have no proven answers

Bounded Rationality

People make decisions using the information they have rather than making an optimal choice.

Risk

The probability of success is less than 100% and losses may occur.

Conflict

Opposing pressures, tension

Contingency Planning

Thinking about something that could arise and planning for that (fire drill).

Satisficing

Choosing the first option that comes to mind.

Decision Making Process

1. Identify and diagnose the problem

2. Generate alternative solutions

3. Evaluate alternatives

4. Make the choice

5. Implement the decision

6. Evaluate the results

Motivated Reasoning

We see what we want to see and make decisions based on desire as opposed to evidence.

Discount the future

We weigh short term costs and benefits more heavily than longer term costs and benefits.

What is effective group decision making?

Leadership, constructive disagreement, creativity

Attribution Bias

People misinterpret the causes of behaviors or events. (You were late because you slept in, you are lazy)

Barriers to effective decision making

1. Limited Resources (Time)

2. Social Realities (Groupthink)

3. Insufficient Information Processing (Fatigue)

4. Psychological Biases (Prejudice)

Illusion of Control

Belief that one can influence events even when one has no control over what can happen.