Management Study Guide

Strategy & Competitive Positioning

  • Mission:

    • Definition: The purpose and scope of the organization.

  • Goals/Plans:

    • Types of Goals:

    • Strategic: Top-level, long-term objectives.

    • Tactical: Department-level objectives.

    • Operational: Daily activities and tasks.

    • Time Frames:

    • Short-range: Typically focused on immediate objectives.

    • Intermediate-range: Covers a mid-term horizon.

    • Long-range: Encompasses future growth and sustainability.

  • Contingency Plan:

    • Definition: Backup actions to address key risks that may impact the strategic plan.

    • Types of Operational Plans:

    • Standing plans: Ongoing actions used repeatedly in situations (e.g., policies).

    • Single-use plans: Developed for specific, non-recurrent situations (e.g., projects).

  • Barriers to Planning:

    • Factors that may impede effective planning include:

    • Bad goals: Poorly defined or unrealistic objectives.

    • Skewed rewards: Incentives that do not align with goals.

    • Reluctance: Hesitation among employees to engage in planning.

    • Resistance to change: Opposition to new strategies or procedures.

  • Emergent Strategy:

    • Definition: A pattern of action that emerges over time rather than being explicitly planned.

  • Distinctive Competence:

    • Definition: The unique capabilities of an organization that provide a competitive advantage.

    • Competitive Advantage:

    • Imitation erodes distinctive competence, leading to a loss of advantage.

    • Parity: When an organization’s capabilities are viewed as “just as good” as those of competitors.

  • Competitive Strategies (Porter):

    • Differentiation: Creating unique products or services.

    • Overall Cost Leadership: Being the low-cost provider in an industry.

    • Focus: Targeting a specific niche or segment of the market.

  • Strategic Types (Miles & Snow):

    • Prospector: Focus on innovation and exploring new markets.

    • Defender: Emphasis on efficiency and defending existing markets.

    • Analyzer: Blending elements of both prospecting and defending.

    • Reactor: Lacking a clear strategy, responding to environmental changes.

  • Product Life Cycle:

    • Stages: Introduction, Growth, Maturity, Decline.

  • Strategic Business Units (SBU):

    • Definition: A semi-autonomous unit within a larger corporation for strategy and management.

  • Corporate vs. Business Strategy:

    • Corporate Strategy: Overall scope and direction of the entire organization.

    • Business Strategy: Specific actions and initiatives to gain competitive advantage in particular markets.

    • Diversification:

    • Related Diversification: Extending existing product lines into new areas.

    • Unrelated Diversification: Venturing into entirely different industries.

  • BCG Matrix:

    • Categories:

    • Stars: High growth, high market share.

    • Cash Cows: Low growth, high market share.

    • Question Marks: High growth, low market share.

    • Dogs: Low growth, low market share.

  • Single-Product Strategy:

    • Definition: Focusing on one line of products, offering a concentration of resources but increasing risk exposure.

Decision Making

  • Types of Decisions:

    • Programmed: Decisions made using established rules or guidelines.

    • Nonprogrammed: Unique decisions requiring tailored approaches.

    • Satisficing: Choosing an option that meets the minimum requirements rather than optimizing.

  • Decision-Making Models:

    • Rational Model: Assumes a logical, optimal decision-making process.

    • Bounded Rationality/Behavioral Model: Recognizes limitations in decision-making due to cognitive biases, lack of information, and time constraints.

    • Classical (Optimizing): Seeks the best solution.

    • Behavioral: Takes into account human limitations and behavior in decision-making processes.

  • Contexts for Decision Making:

    • Certainty: Outcomes are known and predictable.

    • Risk: Outcomes are uncertain but can be estimated quantitatively.

    • Uncertainty: Outcomes cannot be accurately predicted.

  • Escalation of Commitment:

    • Definition: Continuing with a bad course of action due to previously invested resources (time, money, effort).

  • Group Decision-Making:

    • Types of Groups:

    • Interacting Groups: Members engage in face-to-face discussions.

    • Delphi Groups: Use of questionnaires and surveys to gather opinions without face-to-face interactions.

    • Task Groups: Formed to complete specific tasks or objectives.

    • Groupthink:

    • Definition: A situation in which the desire for harmony in a group results in irrational or dysfunctional decision-making outcomes.

Entrepreneurship & Small Business

  • Key Terminology:

    • Entrepreneurs: Individuals who create and run new businesses.

    • Cash Budget: Planning for cash flow over specific periods.

    • SBA:

    • SCORE: Counselors to America's Small Business.

    • ACE: Advocacy Center for Entrepreneurs.

    • SBI: Small Business Institute.

    • SBDC: Small Business Development Centers.

  • Franchising:

    • Pros: Established brand and business model, support from franchisor.

    • Cons: Limited control, ongoing fees, inconsistent quality across locations.

Structure & Design

  • Job Design:

    • Approaches:

    • Specialization: Focusing on specific tasks.

    • Rotation: Moving employees between jobs to reduce monotony.

    • Enlargement: Increasing the scope of an individual’s job.

    • Enrichment: Enhancing the job's intrinsic value.

    • Job Characteristics Approach:

    • Core Dimensions: Skill variety, task identity, task significance, autonomy, feedback → impact on motivation.

  • Span of Control:

    • Definition: The number of subordinates a manager can directly control.

    • Types:

    • Narrow Span: Few direct reports; allows closer supervision.

    • Wide Span: More direct reports; encourages employee autonomy.

  • Delegation:

    • Process through which authority is transferred to lower levels.

  • Departmentalization:

    • Methods include:

    • Functional: Based on functions such as marketing or finance.

    • Location: Based on geographic areas.

    • Product: Based on specific products or services.

    • Customer: Based on customer groups.

    • Sequence: Based on the flow of work.

    • Time: Based on shifts or time frames.

  • Chain of Command:

    • Hierarchical structure defining authority and responsibility.

  • Autonomy:

    • Degree of freedom an employee has to make decisions.

  • Centralization vs. Decentralization:

    • Centralization: Concentration of decision-making authority at the top levels.

    • Decentralization: Distribution of decision-making authority closer to the point of action.

  • Organizational Charts:

    • Types:

    • Line: Traditional hierarchical structure.

    • Staff: Advisory roles added to line structures.

  • Technology in Organizations:

    • Differentiations between Large and Small Batch technologies (e.g., project-based vs. volume production).

  • Organizational Structures:

    • Mechanistic: Rigid and hierarchical, emphasizes structure.

    • Organic: Flexible and adaptive, emphasizes collaboration.

    • Types of Structures:

    • Functional: Organizing by functions/services.

    • Divisional: Organizing by divisions/products.

    • Conglomerate: Diversified structure covering many industries.

    • Matrix: Dual reporting and functional relationships.

    • Virtual: Flexible structures utilizing technology for collaboration.

    • Learning Organizations: Focus on continuous learning and adaptation.

Change & Innovation

  • Types of Change:

    • Planned Change: Intentional and systematic transition efforts.

    • Reactive Change: Responses to external events or crises.

  • Lewin’s Change Model:

    • Stages:

    • Unfreeze: Preparing for change by freeing up the existing state.

    • Change: Implementing new strategies or processes.

    • Refreeze: Stabilizing the new state after change is made.

  • Overcoming Resistance to Change:

    • Techniques include:

    • Participation: Involving employees in the change process.

    • Communication/Education: Providing information about the change benefits and processes.

  • Reengineering:

    • Definition: Radical redesign of business processes to achieve dramatic improvements.

  • Entropy in Organizations:

    • Definition: A tendency of systems to move toward disorder and chaos over time without proper intervention.

  • Types of Innovation:

    • Product Innovation: Development of new or improved products.

    • Process Innovation: Enhancements or transformations in how services or products are produced and delivered.

Human Resources, Labor & Safety

  • Key Legislation:

    • FLSA: Fair Labor Standards Act, governing minimum wage and overtime.

    • NLRA (Wagner Act): Protects labor unions and workers' rights to organize.

    • LMRA (Taft-Hartley Act): Amends labor laws concerning union activities.

    • Affirmative Action: Policies to improve opportunities for historically marginalized groups.

    • Equal Pay Act: Addresses wage disparities based on gender.

    • OSHA: Occupational Safety and Health Administration, ensures workplace safety standards.

  • Human Resource Management Functions:

    • Skills & Replacement Charts: Assessing competencies and planning for replacements.

    • Recruiting: Identifying and attracting candidates for employment.

    • On-the-job Training: Practical training for new hires within the workplace environment.

    • Workers’ Compensation: Insurance providing wage replacement and medical benefits to employees injured on the job.

    • Performance Appraisals: Evaluations of employee performance for development and compensation reasons.

    • Benefits: Compensation packages provided to employees beyond salary.

  • Labor Relations:

    • Collective Bargaining: Negotiation process between employers and labor unions.

    • Grievance Procedure: Established process for employees to resolve disputes with management.