Principles of Management Test 1

management

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

globalization

the growing interdependence of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.

knowledge management

the set of practices aimed at discovering and harnessing an organization’s intellectual resources—fully using the intellects of the organization’s people.

knowledge workers

contribute ideas and problem-solving expertise

competitive advantage

The valuable things an organization does for its
customers that make it better than its
competitors, and thus allows it to generate
greater sales, profits, and/or retain more
customers than its competitors

drivers of competitive advantage

innovation, cost competitiveness, quality, speed, service

management functions

planning, organizing, leading, controlling

planning

Systematically making decisions about the goals
and activities that an individual, a group, a work
unit, or the overall organization will pursue, analyzing current situations, anticipating the
future, determining objectives, deciding in what
types of activities the company will engage

organizing

ssembling and coordinating the human,
financial, physical, informational, and other
resources needed to achieve goals
 specifying job responsibilities, grouping jobs into
work units, marshaling and allocating resources,

leading

stimulating people to be high performers

controlling

monitoring performances and making changes when needed

management levels

top-level, middle-level, frontline managers

top level managers

strategic managers, Senior executives responsible for the overall
management and effectiveness of the
organization.

middle level managers

tactical managers, Managers located in the middle layers of the
organizational hierarchy, reporting to top-level
executives.

frontline managers

operational managers, Lower-level managers who
supervise the operational
activities of the organization, ex supervisors and sales managers

management roles

interpersonal, informational, decisional

interpersonal role

leader, figurehead

informational roles

monitor, disseminator, spokespereson

decisional roles

entrepreneur, disturbance handler, resource allocator, negotiator

management skills

technical, conceptual and descision, interpersonal and communication

technical skills

The ability to perform a specialized task involving a
particular method or process

conceptual and decision skills

Skills pertaining to the ability to identify and resolve
problems for the benefit of the organization and its
members.

interpersonal and communication skills

People skills; the ability to lead, motivate, and
communicate effectively with others.

emotional intelligence

the skills of understanding yourself (including strengths and limitations), managing yourself (dealing with emotions, making good decisions, seeking and using feedback, exercising self-control), and dealing effectively with others (listening, showing empathy, motivating, leading, and so on).,

social capital

the goodwill stemming from your social relationships, and you can mobilize it on your behalf. It aids career success, compensation, employment, team effectiveness, entrepreneurship, and relationships with suppliers and other outsiders

open system

organizations, affected by and in turn affect their external environment.

external environment

All relevant forces outside a firm’s boundaries, such
as competitors, customers, the government, and the
economy.

competitive environment

The immediate environment surrounding a firm;
includes suppliers, customers, rivals, and the like

macroenvironment

The general environment; includes governments,
economic conditions, and other fundamental factors
that generally affect all organizations.

barriers to entry

revent new companies from entering an industry. Major barriers to entry are government policy, capital requirements, brand identification, cost disadvantages, and well-established distribution channels.

substitutes

a threat because customers can use it as an alternative, buying less of one kind of product but more of another.

complement

a potential opportunity because customers buy more of a given product if they also demand more of the complementary product.

switching costs

the fixed costs buyers face if they change suppliers.

supply chain management

Managing the network of facilities and people that
obtain materials from outside the organization,
transform them into products, and distribute them
to customers.

environmental uncertainty

Lack of information needed to understand or predict
the future.
 Environmental Uncertainty arises from:
• Environmental Complexity
• Environmental Dynamism

environmental complexity

The number of issues to
which a manager must
attend as well as the
interconnectedness of
these issues:

environmental dynamism

The degree of
discontinuous change
that occurs within an
industry:

environmental scanning

searching out information
that is unavailable to most
people and sorting that
information to interpret
what is important and
what is not.

scenario development

A narrative that describes a
particular set of future
conditions

forecasting

Method for predicting
exactly how some variables
will change the future.
 Demand for goods/services
 Labor Supply

benchmarking

The process of comparing an organization’s practices and
technologies with those of other companies

responding to environment

adapt, influence, select a new environment

strategic maneuvering

An organization’s conscious efforts to change
the boundaries of its task environment, domain selection, diversification

organizational culture

The set of important assumptions about the
organization and its goals and practices that
members of the company share

group culture

internal and collaborative , emphasis towards developing human resources, commitment and morale

adhocracy culture

entrepreneurship, creativity , adaptivity, emphasis towards innovation and growth

hierarchy culture

order, uniformity, emphasis towards stabilty and predictability

rational culture

goal achievement, competitiveness, emphasis towards competitive advantage and market superiority

uncertainty

The state that exists when decision makers have insufficient
information to know the consequences of different actions.

risk

The state that exists when the probability of success is less than
100 percent and losses may occur.

conflict

Opposing pressures from different sources,
occurring on the level of psychological conflict or
of conflict between individuals or groups.

lack of structure

no automatic procedure to follow, programmed and nonprogrammed decisions

programmed decisions

Decisions encountered
and made before, having
objectively correct
answers, and solvable by
using simple rules,
policies, or numerical
computations.

nonprogrammed decisions

New, novel, complex
decisions having no
proven answers.

ready made solutions

Ideas that have been
seen or tried before,
either by the
decision-maker, or by
advisers who have
faced similar
problems

custom made solutions

New, creative solutions
designed specifically
for the problem

stages of decision making

identifying and diagnosing the problem, generating alternative solutions, evaluating alternative solutions, making the choice, implementing the decision, evaluating the decision

contingency plan

Alternative courses of action that can be
implemented based on how the future unfolds.

vigilance

A process in which a decision maker carefully
executes all stages of decision making

maximizing

A decision realizing the best possible outcome...
greatest benefit at lowest cost

satisficing

Choosing first option that is minimally acceptable,
although not necessarily the best or perfect

optimizing

Achieving the best possible balance among several
goals (e.g., purchasing equipment that is a combination
of quality, durability, and low price)

Barriers to Decision Making

Psychological biases
Time pressure
Social realities

advantages of group decision making

larger pool of information, more perspectives, intellectual stimulation, people understand and are committed to the decision

disadvantages of group decision making

one person dominates, satisficing, groupthink, goal displacement

cognitive conflict

Issue-based differences in
perspectives or
judgments.
(most constructive conflict)

affective conflict

Emotional
disagreement
directed toward other
people.
(destructive conflict)

devils advocate

A person who has
the job of criticizing
ideas to ensure that
their downsides are
fully explored.

dialectic

A structured debate
comparing two
conflicting courses of
action.

brainstorming

A process in which group members generate as
many ideas about a problem as they can; criticism
is withheld until all ideas have been proposed

bounded rationality

A less-than-perfect form
of rationality in which
decision makers cannot
be perfectly rational
because decisions are
complex and complete
information is
unavailable or cannot be
fully processed

incremental model

Model of organizational
decision making in which
major solutions arise
through a series of
smaller decisions

coalitional model

Model of organizational
decision making in which
groups with differing
preferences use power
and negotiation to
influence decisions.

garbage can model

Model of organizational
decision making
depicting a chaotic
process and seemingly
random decision

vision

Long-term direction of the
company

mission

a clear and concise expression of the basic purpose of the organization. It describes what the organization does, for whom it does it, and its basic good or service.

goal

Target or end management desires
to reach

formal planning steps

situation analysis, alternative goals and plans, goal and plan evaluation, goal and plan selection, implementation, monitor and control

smart goal

specific, measurable, attainable, relevant, time bound

strategic planning

A set of procedures for
making decisions
about the
organization’s long-
term goals and
strategies

tactical planning

A set of procedures for translating broad strategic
goals and plans into specific goals and plans that are
relevant to a distinct portion of the organization, such
as a functional area like marketing.

operational planning

The process of identifying the
specific procedures and processes
required at lower levels of the
organization

strategic management

A process that involves managers from all parts of the
organization in the formulation and implementation of goals and
action plans that focus on both long-term, externally oriented
issues and short-term tactical and operational issues.

swot analysis

Strengths - positive internal factors
• Weaknesses - negative internal factors
• Opportunities - positive external factors
• Threats - negative external factors

stakeholders

Groups and individuals who
affect and are affected by the
achievement of the
organization’s mission, goals,
and strategies

resources

Inputs to a system that can enhance performance

core competence

A unique skill and/or knowledge an organization
possesses that gives it an edge over competitors

corporate strategy

concentration, vertical integration, concentric diversification, conglomerate diversification

business strategies

low cost, differentiation

functional strategy

implemented by each
functional area of the organization to support
the business strategy

ethics

The system of rules that
governs the ordering of values

moral philosophy

Principles, rules, and values people use in deciding
what is right or wrong

universalism

The ethical system stating that all people should
uphold certain values that society needs to
function.

egoism

An ethical system defining acceptable behavior as
that which maximizes consequences for the
individual

utilitarianism

An ethical system stating that the greatest good
for the greatest number should be the overriding
concern of decision makers.

relativism

Philosophy that bases ethical behavior on the
opinions and behaviors of relevant other people

sarbanes oxley act

passed into law by Congress in 2002 to
establish strict accounting and reporting rules in
order to make senior managers more accountable
and to improve and maintain investor confidence

compliance based ethics programs

Company mechanisms typically
designed by corporate counsel to
prevent, detect, and punish legal
violations

integrity based ethics programs

Company mechanisms designed to
instill in people a personal
responsibility for ethical behavior

moral awareness

realizing the issue has ethical implications