Management Chapters 5–8 Study Guide: Planning, Strategy, Decision Making, and Organizational Culture & Structure

Comprehensive flashcard set covering foundational management vocabulary from Chapters 5 through 8, including planning, strategic management, decision-making biases, and organizational culture and structure.

Planning

The process of setting objectives and deciding how to accomplish them.

Strategy

A coordinated set of actions designed to achieve organizational goals and gain a competitive advantage.

Strategic Management

The process of analyzing the business environment, developing strategies, implementing them, and evaluating results to achieve long-term success.

Mission Statement

A statement that explains an organization's current purpose by answering why it exists, what it does, and whom it serves.

Vision Statement

A statement that describes what the organization hopes to become in the future by answering where it wants to go.

Values Statement

A statement describing the core principles that guide employee behavior and organizational decisions.

Strategic Planning

Planning performed by top-level managers that focuses on the entire organization and its long-term direction.

Tactical Planning

Planning performed by middle managers that translates strategic goals into department-level plans over shorter time horizons.

Operational Planning

Planning performed by lower-level managers and supervisors focusing on daily or short-term activities, procedures, schedules, and specific tasks.

Operating Plan

A plan describing the ongoing activities an organization or department performs to reach its objectives, often including budgets, schedules, and resource allocations.

Action Plan

A plan that identifies the specific steps needed to achieve a goal, specifying responsibilities, tasks, deadlines, and required resources.

Single-Use Plan

A plan developed specifically for a one-time project or event, such as opening a new store.

Standing Plan

A plan designed for recurring situations that is used repeatedly, consisting of policies, procedures, and rules.

SMART Goals

A goal-setting framework requiring goals to be Specific, Measurable, Achievable, Relevant, and Time-bound.

Management by Objectives (MBO)

A management system in which managers and employees jointly establish goals, develop action plans, monitor performance, and evaluate results.

Planning/Control Cycle

A cyclical process connecting goal setting with performance measurement through six steps: set objectives, develop plans, implement plans, measure performance, compare results, and take corrective action.

Strategic Positioning

Choosing how an organization will compete and create value for customers through establishing a unique position, making trade-offs, and ensuring fit among activities.

Corporate-Level Strategy

A strategy formulated by top executives that determines which industries, markets, or businesses an organization should enter or operate in.

Business-Level Strategy

A strategy that determines how a particular business unit competes in its market to achieve a competitive advantage over rivals.

Functional-Level Strategy

A strategy that determines how individual departments (e.g., marketing, finance, operations, HR) support the overall business strategy.

SWOT Analysis

A strategic framework used to evaluate an organization by examining internal strengths and weaknesses alongside external opportunities and threats.

VRIO Framework

A framework that evaluates whether a firm's resources are Valuable, Rare, Inimitable, and Organized to capture value to establish a sustained competitive advantage.

Growth Strategy

A corporate-level strategy focused on expanding business size, revenue, market presence, or operational scope.

Stability Strategy

A corporate-level strategy focused on maintaining an organization's current direction, operations, and risk profile.

Renewal Strategy

A corporate-level strategy designed to address declining performance through retrenchment (cost reductions) or turnaround (major restructuring).

BCG Matrix

A portfolio management matrix that evaluates business units or products based on market growth rate and relative market share.

Stars (BCG Matrix)

Business units or products possessing high market growth and high relative market share that often require substantial investment.

Question Marks (BCG Matrix)

Business units or products with high market growth and low relative market share that face an uncertain future.

Cash Cows (BCG Matrix)

Established business units or products with low market growth and high relative market share that generate excess cash.

Dogs (BCG Matrix)

Business units or products with low market growth and low relative market share that offer limited market position and low returns.

Porter's Five Competitive Forces

A model evaluating industry competitiveness via rivalry among existing competitors, threat of new entrants, threat of substitutes, bargaining power of buyers, and bargaining power of suppliers.

Cost Leadership Strategy

A competitive strategy targeting a broad market by achieving a low-cost advantage through scale, efficiency, and cost control.

Differentiation Strategy

A competitive strategy targeting a broad market by offering distinctive features, design, service, or superior customer value.

Cost Focus Strategy

A competitive strategy that targets a narrow, price-sensitive market segment and serves it at low cost.

Differentiation Focus Strategy

A competitive strategy that targets a narrow market segment with a specialized or unique product offering.

Rational Decision Making

A systematic decision model where decision makers logically analyze criteria, evaluate all alternatives, and select the optimal solution.

Nonrational Decision Making

Decision-making approaches recognizing that real-world decision makers face constraints in time, information, mental capacity, and certainty.

Bounded Rationality

The concept that managers attempt to make rational decisions but are constrained by human limitations in time, cognitive ability, and available information.

Satisficing

Choosing an alternative that is acceptable or good enough rather than spending exhaustive resources to find the optimal solution.

Intuitive Decision Making

Making decisions based on past experience, subconscious judgment, and pattern recognition rather than structured analytical procedures.

Escalation of Commitment

The tendency to continue investing resources into a failing course of action due to the time, money, or effort already sunk into it.

Descriptive Analytics

A category of data analytics that examines past data to explain what happened.

Diagnostic Analytics

A category of data analytics that investigates data to identify why an event or trend occurred.

Predictive Analytics

A category of data analytics that analyzes patterns to estimate or forecast what is likely to happen.

Prescriptive Analytics

A category of data analytics that uses simulations and models to recommend specific actions to achieve optimal outcomes.

Directive Decision-Making Style

A decision style characterized by a preference for limited information and few alternatives, valuing speed, efficiency, and practical solutions.

Analytical Decision-Making Style

A decision style characterized by a desire for comprehensive data, careful analysis, and detailed evaluation of alternatives.

Conceptual Decision-Making Style

A decision style characterized by broad thinking, high tolerance for ambiguity, creative alternatives, and consideration of long-term implications.

Behavioral Decision-Making Style

A decision style focused on relationships, open communication, collaboration, and how decisions impact people.

Heuristics

Mental shortcuts used to make decisions quickly that can sometimes produce predictable, systematic errors in judgment.

Overconfidence Bias

A cognitive bias where a person overestimates the accuracy of their personal knowledge or judgment.

Confirmation Bias

The tendency to search for, interpret, and favor information that validates preexisting beliefs while discounting contradictory evidence.

Anchoring Bias

The tendency to rely too heavily on the initial piece of information received when making decisions or estimates.

Availability Bias

Judging the frequency or likelihood of an event based on how readily memorable examples come to mind.

Representativeness Bias

The tendency to assess the likelihood of an event or person based on how closely it resembles an existing stereotype or category.

Hindsight Bias

The false belief after an event has taken place that one accurately predicted or knew the outcome all along.

Framing Bias

The tendency to be influenced by how information or choices are presented rather than by the underlying facts alone.

Recency Bias

The cognitive tendency to give disproportionate weight to the most recent information or events when evaluating performance or situations.

Groupthink

A dysfunctional group dynamic where the pressure to maintain harmony and consensus leads members to suppress dissenting viewpoints and critical thinking.

Social Loafing

The tendency of individuals to reduce their personal effort when working collaboratively within a group compared to working alone.

Organizational Culture

The shared values, beliefs, assumptions, and behaviors that influence how members of an organization interact and work.

Organizational Structure

The formal framework defining how work tasks are divided, who reports to whom, how authority is distributed, and how activities are coordinated.

Person–Organization Fit

The extent to which an individual's personal values, beliefs, and working styles align with the organizational culture.

Artifacts (Culture)

The observable, physical, and behavioral signs of organizational culture, such as dress codes, rituals, office layout, and logos.

Espoused Values

The explicitly stated values, norms, and principles that an organization professes to adhere to in its mission and policies.

Basic Underlying Assumptions

The unconscious, taken-for-granted beliefs and values that deeply guide employee decisions and actions.

Organizational Socialization

The ongoing process through which new employees acquire the knowledge, values, behaviors, and skills required to become effective members.

Clan Culture

An organizational culture with an internal focus and high flexibility that emphasizes collaboration, teamwork, employee development, and mentoring.

Adhocracy Culture

An organizational culture with an external focus and high flexibility that prioritizes innovation, creativity, calculated risk-taking, and adaptation.

Market Culture

An organizational culture with an external focus and stability orientation that emphasizes competition, productivity, and hard results.

Hierarchy Culture

An organizational culture focused on internal stability and control that emphasizes formal rules, standardized procedures, and clear authority lines.

Functional Structure

An organizational design that groups employees and activities according to shared expertise or business functions (e.g., marketing, finance, HR).

Divisional Structure

An organizational design that groups activities into semi-autonomous units based on products, geographic regions, or customer groups.

Matrix Structure

An organizational design combining functional and divisional structures, creating dual reporting relationships to both functional and project managers.

Network Structure

An organizational design where a core organization coordinates activities outsourced to specialized external partners and contractors.

Centralization

The degree to which decision-making authority is concentrated at higher levels of organizational management.

Decentralization

The dispersal of decision-making authority to lower-level managers and employees throughout the organization.