MGMT 161: Management Theory (Chapters 1 to 5)

Comprehensive review flashcards covering Chapters 1 through 5 of Management Theory (MGMT 161), including management fundamentals, external environment and organizational culture, decision-making, planning and strategic management, and organizational structure and design.

How is management defined?

Coordinating work activities so that they are completed efficiently and effectively with and through other people.

According to the lecture statistics, what percentages of new managers feel unprepared, receive no training, and fail during the transition?

$26\%$ of new managers feel unprepared to transition into management roles, $58\%$ receive no training to help them make the transition, and $48\%$ of first-time managers fail in that transition.

What is the distinction between efficiency and effectiveness in management?

Efficiency is doing things in the right way (the ability to do something using the least amount of time, effort, energy, or resources while still achieving the desired result). Effectiveness is doing the right things (achieving the intended goal).

What are the four primary functions of management?

Planning (deciding what needs to be done and how to achieve goals), Organizing (arranging people, resources, and tasks), Leading (motivating, communicating with, and guiding employees), and Controlling (monitoring performance to ensure goals are met and making adjustments).

What are the four core skill sets and competencies managers need?

Conceptual skills (understanding complicated situations, seeing how parts connect, and thinking strategically), Interpersonal skills (working effectively with others, mentoring, and motivating), Technical skills (specific knowledge, tools, procedures, and techniques), and Political skills (understanding how the organization works and how to make things happen).

How do public sector organizations, non-profit organizations, NGOs, Crown corporations, and private sector businesses differ?

Public sector organizations are owned and operated by government and funded by taxes; non-profits operate for purposes other than profit and reinvest revenue into their mission; NGOs operate independently from government on social, humanitarian, or development issues; Crown corporations are government-owned but operate with commercial independence; private sector businesses are owned by individuals or groups and operate to earn a profit.

What is the external environment, and how do the specific and general environments differ?

The external environment includes everything outside an organization that can affect its performance. The specific environment consists of micro-level external forces and stakeholders (customers, competitors, suppliers, employees, government) that have a direct and immediate impact. The general environment consists of macro-level external forces (PESTE: political/legal, economic, sociocultural, technological, and environmental) that indirectly affect all organizations.

What external forces make up the PESTE framework in an organization's general environment?

Political & Legal conditions (government regulations, employment laws, taxes), Economic conditions (inflation, recession, unemployment, economic growth), Sociocultural conditions (demographics, changing consumer trends, lifestyles), Technological conditions (advances such as AI and social media), and Environmental conditions (natural environment, pollution controls, and protection laws).

What two dimensions determine environmental uncertainty according to this matrix?

Degree of Change (ranging from stable to dynamic) and Degree of Complexity (ranging from simple to complex).

What is organizational culture, and what are its three key implied characteristics?

A system of shared meaning and beliefs held by an organization's members that largely determines how they act. Its three characteristics are: culture is perceived (felt through experiences), culture is shared (described similarly by members across levels), and culture is descriptive (concerned with how members perceive it, not whether they like it).

What are the seven dimensions of organizational culture shown in this framework?

1. Attention to Detail, 2. Outcome Orientation, 3. People Orientation, 4. Team Orientation, 5. Aggressiveness, 6. Stability, and 7. Innovation and Risk Taking.

What is the difference between a strong culture and a weak culture?

In a strong culture, key values are deeply held and widely shared, creating a clear understanding of expectations and exercising a strong influence on employees. In a weak culture, employees have less clarity and agreement about organizational values, leading to inconsistent priorities.

What are the eight steps of the decision-making process in order?

1. Identification of a Problem, 2. Identification of Decision Criteria, 3. Allocation of Weights to Criteria, 4. Development of Alternatives, 5. Analysis of Alternatives, 6. Selection of an Alternative, 7. Implementation of the Alternative, and 8. Evaluation of Decision Effectiveness.

How do the rational model, bounded rationality, and intuitive decision making differ?

The rational model assumes logical, systematic evaluation of all alternatives to maximize the outcome. Bounded rationality recognizes that decision makers are limited by reality and cognitive capacity, leading them to satisfice (select a solution that is 'good enough'). Intuitive decision making relies on subconscious mental processing, experience, values/ethics, feelings/emotions (affect), and skills/training.

How are structured problems and unstructured problems resolved?

Structured problems are straightforward, familiar, and easily defined, resolved using programmed decisions (routine procedures, rules, and policies). Unstructured problems are new, unusual, and ambiguous, requiring nonprogrammed decisions (unique, custom-made solutions).

How do procedures, rules, and policies differ in guiding programmed decisions?

Procedures specify a series of sequential steps for how a task should be done. Rules are explicit statements telling employees what they must or must not do with little interpretation. Policies provide broad guidelines that establish parameters for managerial decision-making.

What cognitive bias or phenomenon is depicted in this graph relating confidence to knowledge in a field?

The Dunning-Kruger Effect, where early-stage learners often experience a peak of overconfidence ('I know everything') before realizing the complexity of a field, while true experts are typically less confident than novice learners.

What are sunk cost error, anchoring bias, and confirmation bias?

Sunk cost error occurs when a decision maker continues with a poor decision because time, money, or effort has already been invested. Anchoring bias is fixating on initial information received. Confirmation bias is seeking out information that supports existing beliefs while ignoring contradictory evidence.

What is groupthink, and how can managers prevent it?

Groupthink occurs when group members prioritize conformity and harmony over critical appraisal, suppressing dissenting views. Managers can prevent it by building diverse groups, encouraging disagreement, requiring every member to contribute, and fostering open discussion.

What are the four approaches along the Corporate Social Responsibility (CSR) continuum?

1. Obstructionist Approach (disregard for social responsibility / no social responsibility), 2. Defensive Approach (minimal commitment), 3. Accommodative Approach (moderate commitment), and 4. Proactive Approach (strong commitment / high social responsibility).

What are the four primary purposes of planning?

1. Provides direction (gives a roadmap and aligns efforts), 2. Reduces uncertainty (anticipates environmental change), 3. Minimizes waste and redundancy (prevents duplicated or ineffective efforts), and 4. Establishes goals and standards (provides benchmarks to facilitate control).

What is the difference between traditional goal setting and Management by Objectives (MBO)?

In traditional goal setting, objectives are established at the top level and passed down as top-down directives. In Management by Objectives (MBO), managers and employees jointly set specific performance objectives, periodically review progress, and allocate rewards based on achievement.

What are the four recurring steps in the Management by Objectives (MBO) cycle?

1. Set corporate objectives, 2. Jointly set employee objectives, 3. Develop action plans to achieve objectives, 4. Review objectives and provide feedback, followed by rewarding employees for achieved objectives.

What six characteristics define well-designed organizational goals?

1. Written in terms of outcomes rather than actions, 2. Measurable and quantifiable, 3. Clearly specify a time frame, 4. Challenging yet attainable, 5. Flexible (allowing adaptation to change), and 6. Feature participation and feedback from necessary organizational members.

What are the four dimensions used to classify organizational plans?

Breadth (Strategic vs. Operational), Time Frame (Short-term [$\le 1$ year] vs. Long-term [$> 1$ year]), Specificity (Specific vs. Directional), and Frequency of Use (Single-use vs. Standing).

What are the five planning tools discussed in strategic management?

Forecasting (predicting the future using past data), Contingency Planning (identifying alternative plans for unexpected outcomes), Scenario Planning (planning for multiple different future conditions), Benchmarking (comparing practices and performance against competitors), and Process Planning (creating frameworks/steps to reach goals).

What are the six steps in the Strategic Management Process?

Step 1: Identify the organization's current vision, mission, goals, and strategies; Step 2: Internal Analysis (Strengths and Weaknesses); Step 3: External Analysis (Opportunities and Threats); Step 4: Formulate Strategies; Step 5: Implement Strategies; Step 6: Evaluate Results.

What are the four common types of corporate growth strategies?

Concentration (expanding an existing business line), Vertical Integration (expanding into suppliers or distribution channels in the supply chain), Horizontal Integration (combining with or acquiring competitors), and Diversification (expanding into entirely different business industries).

What are Michael Porter's three competitive strategies?

Cost Leadership (becoming the lowest-cost producer in the industry), Differentiation (offering uniquely valued products or services), and Focus (targeting a narrow niche or specific customer segment).

What is organizational structure, and what is organizational design?

Organizational structure is how tasks are divided, grouped, and coordinated within an organization. Organizational design is the process of developing or changing an organization's structure.

What are the six key elements of organizational structure?

1. Work Specialization, 2. Departmentalization, 3. Chain of Command, 4. Span of Control, 5. Centralization / Decentralization, and 6. Formalization.

What are the five common bases for departmentalization?

Functional (grouped by work activities/functions), Geographic (grouped by territory/location), Product (grouped by product lines), Customer (grouped by specific customer types), and Process (grouped by production stages or flow of work).

What is the distinction between line authority and staff authority in the chain of command?

Line authority entitles a manager to direct the work of employees and make direct operating decisions down the chain of command. Staff authority consists of advisory, supportive, or specialized expertise provided to line managers without direct operational control.

How do responsibility, accountability, delegation, and unity of command relate to authority?

Authority is the formal right to make decisions; Responsibility is the obligation to perform assigned tasks; Accountability is being answerable for the outcomes of those actions; Delegation is assigning authority and responsibility to subordinates; Unity of Command states that an employee should report to only one direct supervisor.

What are the trade-offs between a narrow span of control and a wide span of control?

A narrow span of control ($<8$ employees) provides close monitoring, coaching, and individual attention, but increases management levels, overhead costs, and communication distance. A wide span of control ($>13\text{--}20+$ employees) reduces managerial overhead, flattens the organization, and increases employee independence, but gives managers less time per subordinate and complicates monitoring.

How do mechanistic and organic organizational structures differ across design dimensions?

Mechanistic structures feature high specialization, rigid departmentalization, clear hierarchy, narrow span of control, centralized decision-making, and high formalization. Organic structures feature cross-functional teams, collaboration, free flow of information, wide span of control, decentralized decision-making, and low formalization.

What four contingency variables determine whether an organization should adopt a mechanistic or organic structure?

1. Strategy (innovation strategies favor organic; cost-minimization favors mechanistic), 2. Size (large organizations with $>2000$ employees become more mechanistic), 3. Technology (unit production favors organic; mass production favors mechanistic), and 4. Environmental Uncertainty (dynamic/uncertain environments require organic; stable environments suit mechanistic).

What are the strengths and weaknesses of simple, functional, and divisional organizational structures?

Simple structure is fast and flexible but risky due to reliance on one person and unsuitable as the firm grows. Functional structure achieves cost savings from specialization but risks functional silos where units lose sight of organizational goals. Divisional structure focuses on results per business unit but suffers from duplication of activities, increasing costs.

What are the characteristics of team, matrix-project, boundaryless, and learning organizational designs?

Team structure organizes the entire firm into work groups; Matrix-project assigns functional specialists to projects (reporting to dual managers in matrix) or keeps employees moving across projects; Boundaryless eliminates horizontal, vertical, or external boundaries (virtual and network structures); Learning structure continuously acquires, shares, and applies knowledge.

How does national culture influence expectations regarding formalization, chain of command, and span of control?

In formalization, Japanese workers often expect explicit rules and procedures for consistency, whereas Canadian workers expect discretion. In chain of command, South Korean workplaces emphasize seniority and strict hierarchy, whereas Canadian workplaces encourage cross-level questioning. In span of control, US/Canadian organizations utilize wider spans favoring autonomy, whereas cultures prioritizing hierarchy prefer narrower spans with close supervision.