Exam II Review Guide — Management 309 Flashcards

These flashcards cover the key management principles from Chapters 4, 3, 6, 7, and 10, focusing on decision making, planning, organizational structure, change, innovation, and employee motivation.

Programmed decisions

Routine and repetitive decisions handled through established rules or procedures.

Non-programmed decisions

Novel and unstructured decisions requiring judgment and creativity.

Certainty

A decision-making condition where all information is known and outcomes are predictable.

Risk

A condition where decision outcomes are unknown but their probabilities can be estimated.

Uncertainty

A decision-making condition where both outcomes and probabilities are unknown, requiring judgment and intuition.

Rational/classical decision-making model

A step-by-step logical process assuming perfect information and full rationality.

Evidence-Based Management (EBM)

The practice of using the best available data and research to make decisions rather than intuition or habit.

Administrative model

A model recognizing that managers rarely have perfect information and must operate under bounded rationality.

Bounded rationality

The concept that decision making is limited by incomplete information, cognitive capacity, and time constraints.

Satisficing

Choosing the first acceptable solution rather than searching for the optimal one.

Intuition

Using gut feeling or accumulated experience to make decisions quickly without systematic analysis.

Escalation of commitment

Continuing to invest in a failing course of action because of prior investment, also known as the sunk cost fallacy.

Risk propensity

A person's inherent willingness or tendency to take risks in decisions.

Delphi group

A decision-making method where experts respond to questionnaires anonymously in multiple rounds without face-to-face interaction.

Nominal group

A structured technique where members write ideas individually, share them in round-robin fashion, and vote by secret ballot.

Groupthink

A phenomenon where the desire for harmony and consensus overrides realistic appraisal of alternatives, leading to poor-quality decisions.

Strategic goals

Broad goals set by top management with a time horizon of $5-10 \, \text{years}$.

Tactical goals

Goals set by middle managers that typically have a time horizon of approximately $1 \, \text{year}$.

Operational goals

Day-to-day goals set by lower-level managers.

Mission statement

A document that defines the organization's fundamental purpose and sits above strategic, tactical, and operational goals.

Strategic management

A comprehensive, ongoing process of formulating and implementing effective strategies.

Distinctive competence

A unique organizational strength that few competitors can match.

Scope

The range of markets in which an organization competes.

Resource deployment

How an organization distributes its resources across areas of competition.

Business-level strategy

A strategy focused on how to compete in a specific market or industry.

Corporate-level strategy

A strategy focused on which industries to participate in and how to allocate resources across them.

Strategy formulation

The process of creating or determining strategies, focusing on content.

Strategy implementation

The method by which strategies are executed or operationalized, focusing on process.

SWOT analysis

A strategic tool that assesses internal Strengths and Weaknesses and external Opportunities and Threats.

Differentiation

A business-level strategy to distinguish the organization through quality, uniqueness, or brand image.

Overall cost leadership

A strategy focused on gaining competitive advantage by maintaining the lowest costs.

Focus strategy

Concentrating on a narrow market segment using either differentiation or cost leadership within that niche.

Product life cycle

A model describing four stages of demand for a product: Introduction, Growth, Maturity, and Decline.

Diversification

The process of expanding into new lines of business.

Related diversification

Entering businesses that are linked to existing ones, aiming for synergies.

Unrelated diversification (Conglomerate)

Entering businesses unrelated to existing ones to spread risk across industries.

BCG Matrix

A framework classifying businesses as Stars (high growth/high share), Cash Cows (low growth/high share), Question Marks (high growth/low share), or Dogs (low growth/low share).

GE Business Screen

A $3 \times 3 \, \text{grid}$ evaluating competitive position against industry attractiveness to classify businesses into categories like Winner, Average Business, or Loser.

Single-use plans

Operational plans created for one-time, non-repeating events, such as programs and projects.

Standing plans

Plans used repeatedly for recurring situations, such as policies, SOPs, and rules.

Contingency planning

Identifying alternative courses of action to take if the original plan is disrupted by unexpected events.

Crisis management

Preparing for and responding to disasters, emergencies, or sudden events that threaten organizational viability.

Job specialization

The degree to which the organization's overall task is broken down into narrow component parts.

Job rotation

Systematically moving employees between jobs as an alternative to specialization.

Job enlargement

Adding more tasks horizontally to a job to increase variety.

Job enrichment

Adding both more tasks and more control to a job to increase motivation.

Job characteristics approach

Designing jobs around five core dimensions: skill variety, task identity, task significance, autonomy, and feedback.

Functional departmentalization

Grouping jobs by similar activities; minimizes duplication but may slow decisions.

Chain of command

A clear, distinct line of authority running from top to bottom of the organization.

Unity of command

The principle that each employee must report to exactly one boss.

Scalar principle

The requirement of an unbroken line of authority from the lowest to the highest position.

Span of control

The number of people who report to a particular manager.

Tall structure

An organizational design characterized by a narrow span of control and more layers, leading to higher costs and slower decisions.

Flat structure

An organizational design with a wide span of control and fewer layers, often leading to higher morale and faster decisions.

Centralization

Retention of power and authority at higher levels of management, best for stable environments.

Decentralization

Delegation of power and authority to middle and lower-level managers, best for uncertain and complex environments.

Pooled interdependence

The lowest complexity level where units work independently and output is combined.

Sequential interdependence

Medium complexity where the output of one unit becomes the input for the next in a one-way flow.

Reciprocal interdependence

Highest complexity where activities flow both ways between units, such as in a hospital ER.

Bureaucracy

Weber's ideal rational-legal organization model characterized by a clear hierarchy, formal rules, and division of labor.

Planned change

Change designed and implemented in an orderly, anticipatory fashion.

Reactive change

A piecemeal response to circumstances as they develop.

Unfreezing

The first step in Lewin's Model, involving preparing the organization to accept that change is necessary.

Refreezing

The final step in Lewin's Model, stabilizing and reinforcing the new state so it becomes the norm.

Force-field analysis

A technique for listing forces pushing for and against a change to help managers outweigh opposition.

Business process change (reengineering)

The radical redesign of all aspects of a business to achieve major gains in cost, service, or time.

Organization Development (OD)

A planned effort using behavioral science knowledge to increase organizational effectiveness and health.

Radical innovation

A type of innovation that completely replaces an existing product or service.

Incremental innovation

A change that modifies an existing product or service.

Intrapreneurship roles

The three roles of Inventor, Product champion, and Sponsor that promote innovation within an organization.

Maslow's Hierarchy of Needs

A motivation theory identifying five levels of needs: Physiological, Safety/Security, Social/Belonging, Esteem, and Self-actualization.

ERG Theory

Alderfer's theory collapsing Maslow's hierarchy into three categories: Existence, Relatedness, and Growth.

Frustration-regression

The ERG theory element where a person regresses to a lower need if a higher one is frustrated.

Herzberg's Two-Factor Theory

Distinguishes between hygiene factors (prevent dissatisfaction) and motivators (drive satisfaction and performance).

Acquired Needs Theory

McClelland's theory of three learned needs: achievement, affiliation, and power.

Expectancy Theory

Motivation depends on the product of Expectancy, Instrumentality, and Valence: $\text{Motivation} = \text{Effort-to-Performance Expectancy} \times \text{Performance-to-Outcome Expectancy} \times \text{Valence}$.

Equity Theory

The process theory where people compare their input/outcome ratio to that of a referent.

Goal-Setting Theory

A theory stating that specific, difficult goals that are accepted and accompanied by feedback produce the highest performance.

Positive reinforcement

Strengthening behavior by adding a desirable consequence.

Avoidance (negative reinforcement)

Strengthening behavior by removing an undesirable consequence.

Extinction

Weakening behavior by removing a desirable consequence or ignoring the behavior.

Fixed-interval schedule

A reinforcement schedule where rewards are applied at fixed time intervals Regardless of behavior.

Variable-ratio schedule

A reinforcement schedule where rewards are applied after a variable number of behaviors.

Behavioral Modification (OB Mod)

Systematically applying reinforcement theory to shape desired employee behaviors.

Empowerment

Enabling employees to set their own goals, make decisions, and solve problems within their sphere of responsibility.

Gainsharing

A group reward system that shares cost savings from productivity improvements with employees, such as the Scanlon plan.

ESOPs (Employee Stock Ownership Plans)

An organizational reward system where employees own shares of the company.