MAN 3025 exam 1 definitions

Decision

is a choice made from available alternatives

Decision making

the process of making a choice or finding a solution

rational model of decision making

also called the classical model, explains how managers should make decisions; it assumes managers will make logical decisions that will be the optimum in furthering the organization's best interests.

problems

difficulties that inhabit the achievement of goals

Opportunities

situations that present possibilities for exceeding existing goals

diagnosis

identifying and analyzing the underlying causes

nonrational models of decision making

explain how managers make decisions; they assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimal decisions

bounded rationality

A concept suggesting that decision makers are limited by their values and unconscious reflexes, skills, and habits

hubris

excessive pride

satisficing model

managers seek alternatives until they find one that is satisfactory, not optimal

intuition

making a choice without the use of conscious thought or logical inference

Ethics Officer

someone trained about matters of ethics in the workplace, particularly about resolving ethical dilemmas

decision tree

a graph of decisions and their possible consequences; it is used to create a plan to reach a goal

Evidence-based decision making

process of gathering and analyzing high quality data to develop and implement a pan of action

Descriptive analytics

identifies trends and relationships within big data

machine learning

is the process by which computers use algorithms and statistical models to detect patterns in data without being explicitly programmed

predicative analytics

combines historical data with statistical models and machine learning to specify the likelihood of future outcomes

volume

refers to the quantity of data and storage capacity required to house it

variety

refers to a different sources of data generated by humans or machines

velocity

is the speed at which data accumulates

veracity

refers tot he degree to which data is of high quality and comes from a trustworthy source

value

is the extent to which analyzing data produces insight that contribute to an organization effectiveness

autonomous devices

Collect data from situations to make calculations, define probabilities, and make reason-based decisions according to programmed goals

decision-making style

reflects the combination of how an individual perceives and responds to information

heuristics

strategies that simplify the process of making decisions

availability bias

the use of information readily available from memory to make judgements

representativeness bias

the tendency to generalize from a small sample or a single event

confirmation bias

occurs when people seek information to support their point of view and discount data that does not support it

sunk-cost bias

when managers add up all the money already spent on a project and conclude it is too costly to simply abandon it

anchoring and adjustment bias

the tendency to make decisions based on an initial figure

overconfidence bias

the bias in which people's subjective confidence in their decision making is greater than their objective accuracy

hindsight bias

the tendency to believe, after learning an outcome, that one would have foreseen it

framing bias

the tendency of decision makers to be influenced by the way a situation or problem is presented to them

escalation of commitment bias

whereby decision makers increase their commitment to a project despite negative information about it

categorical thinking bias

Tendency of decision makers to classify people or information based on observed or inferred characteristics

sham participation

Occurs when powerless, but useful individuals are selected by leaders to rubber stamp decisions and work hard to implement them

groupthink

occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation

goal displacement

occurs when the primary goal is subsumed by a secondary goal

minority dissent

dissent that occurs when a minority in a group publicly opposes the beliefs, attitudes, ideas, procedures, or policies assumed by the majority of the group

consensus

occurs when members are able to express their opinions and reach agreement to support the final decision

brainstorming

technique used to help groups generate multiple ideas and alternatives for solving problems

electronic brainstorming

a form of brainstorming that relies on networked computers for submitting and sharing creative ideas

after action review

project post mortem, a review of recent decisions in order to identify possible future improvement

Strategic positioning

attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company

corporate-level strategy

focuses on the organization as a whole

business level strategy

focuses on individual business units or product/service lines

functional-level strategy

Plan of action by each functional area of the organization to support higher level strategies

current reality assessment

to look at where the organization stands and see what is working and what could be different so as to maximize efficiency and effectiveness in achieving the organization's mission

strategy formulation

the process of choosing among different strategies and altering them to best fit the organization's needs

strategy implementation

the process of putting strategies into action

strategic control

consists of monitoring the execution of strategy and making adjustments, if necessary

sustainable competitive advantage

exists when other companies cannot duplicate the value delivered to customers

SWOT analysis

is a situational analysis in which a company assesses its strengths, weaknesses, opportunities, and threats

Organizational strengths

skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its vision

organizational weaknesses

Drawbacks that hinder an organization in executing strategies in pursuit of its vision

organizational opportunities

environmental factors that the organization may exploit for competitive advantage

organizational threats

environmental factors that hinder an organization's achieving a competitive advantage

VRIO

a framework for analyzing a resource or capability to determine its competitive strategic potential by answering four questions about its Value, Rarity, Imitability, and Organization

forecast

is a vision or projection of the future

trend analysis

hypothetical extension of a past series of events into the future

scenario analysis

is the creation of alternative hypothetical but equally likely future conditions

benchmarking

a process by which a company compares its performance with that of high-performing organizations

growth strategy

is a grand strategy that involves expansion-as in sales revenues, market share, number of employees, or number of customers

innovation strategy

growing market share or profits by innovating improvements in products or services

stability strategy

grand strategy that involves little to no significant change

defensive strategy

a grand strategy that involves reduction in the organization's efforts

BCG matrix

is a management strategy by which companies evaluate their strategic business units on the basis of (1) their business growth rates and (2) their share of the market

diversification

to either grow revenue or reduce risk

related diversification

when a company purchases a new business that is related to the company's existing business portfolio

unrelated diversification

occurs when a company acquires another company in a completely unrelated business

vertical integration

Firm expands into businesses that provide the supplies it needs to make its products or that distribute and sell its products

Porter model for industry analysis

1. threats of new entrants, 2. bargaining power of suppliers, 3. bargaining power of buyers, 4. threats of substitute products or services, 5. rivalry among competitors

Porters four competitive strategies

1. cost-leadership

2. differentiation

3. cost-focus

4. focused-differentiation

cost leadership strategy

keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market

differentiation strategy

to offer products or services that are of unique and superior value compared with those of competitors but to target a wide market

cost-focus strategy

keep the costs of a product below those of competitors and to target a narrow market

focused-differentiation strategy

is to offer products or services that are of unique and superior value compared to those of competitors and to target narrow market

execution

the carrying out or putting into effect of a plan, order, or course of action.

performance management

set of activities designed to assess and improve employee performance as a means to improve organizational performance

Triple bottom line (TBL)

a measure that accounts for an organization's results in terms of its effects on people, planet, and profits

Stakeholders

the people whose interests are affected by an organization's activities

Internal Stakeholder

consists of employees, owners, and the board of directors

external stakeholders

consists of all the parties outside the organization that have a stake in its decisions

task environment

consists of 10 groups that interact with the organization on a regular basis

General environment OR microenvironment

Set of broad, uncontrollable forces in the external environment that impact the organization

Owners

An organization consist of all those who can claim it as their legal property

Sole proprietors

A business owned by one person

Partners

Yours in a partnership, Both are owners

Private investors

Individuals, including venture capitalists, who purchase shares in companies

employee owners

If you work for a company that is more than half owned by its employees, you are one of the joint owners - you're part of an Employee Stock Ownership Plan (ESOP).

Stockholders

A group of people that make up a corporation by sharing ownership in a certain company

board of directors

the group of people elected to oversee the firms activates and ensure that management acts in shareholders best interest

Task Environment

consisting of 10 groups that interact with the organization on a regular basis

general environment

the economic, technological, sociocultural, and political/legal trends that indirectly affect all organizations

customers

are those who pay to use an organization's goods or services

Competitors

people or organizations that compete for customers or resources

Supplier

is a person or organization that provides supplies, raw materials, services, equipment, labor, or energy to other organizations

distributor

sometimes called a "Middle Man", a person or organization that helps another organization sell its goods and services to customers

strategic allies

describes the relationship of two organizations who join forces to achieve advantages neither can perform as well alone

Clawbacks

rescinding the tax breaks when firms don't deliver promised jobs