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Questions and Answers
What is the purpose of the Delphi Technique in management?
What is the purpose of the Delphi Technique in management?
What is the first stage of the planning process?
What is the first stage of the planning process?
What does the mission statement of an organization describe?
What does the mission statement of an organization describe?
During which stage of the planning process do managers analyze the current situation?
During which stage of the planning process do managers analyze the current situation?
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What must managers decide during the strategy implementation stage?
What must managers decide during the strategy implementation stage?
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What is a primary disadvantage of group decision-making that results in biased outcomes?
What is a primary disadvantage of group decision-making that results in biased outcomes?
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What role does the devil's advocate play in group decision-making?
What role does the devil's advocate play in group decision-making?
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What is the main purpose of dialectical inquiry in decision-making?
What is the main purpose of dialectical inquiry in decision-making?
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How can promoting diversity within a group benefit decision-making?
How can promoting diversity within a group benefit decision-making?
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What is the main goal of organizational learning?
What is the main goal of organizational learning?
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What defines creativity in the context of decision-making?
What defines creativity in the context of decision-making?
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What is the ultimate objective of a learning organization?
What is the ultimate objective of a learning organization?
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What is NOT a part of the devil's advocacy approach?
What is NOT a part of the devil's advocacy approach?
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What is the main focus of Personal Mastery in a learning organization?
What is the main focus of Personal Mastery in a learning organization?
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Why is Team Learning considered more important than individual learning?
Why is Team Learning considered more important than individual learning?
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What does Senge mean by promoting Systems Thinking?
What does Senge mean by promoting Systems Thinking?
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What is the purpose of the Nominal Group Technique?
What is the purpose of the Nominal Group Technique?
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How does Senge suggest organizations build an environment supportive of creativity?
How does Senge suggest organizations build an environment supportive of creativity?
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What potential problem does brainstorming face according to the content?
What potential problem does brainstorming face according to the content?
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What is an expected outcome of building a Shared Vision within an organization?
What is an expected outcome of building a Shared Vision within an organization?
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Which of the following is NOT a principle outlined by Senge for a Learning Organization?
Which of the following is NOT a principle outlined by Senge for a Learning Organization?
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What is the primary focus of corporate-level planning?
What is the primary focus of corporate-level planning?
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Which time horizon typically characterizes long-term plans?
Which time horizon typically characterizes long-term plans?
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What type of plan is primarily concerned with departmental actions to implement business-level strategies?
What type of plan is primarily concerned with departmental actions to implement business-level strategies?
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What is a characteristic of standing plans?
What is a characteristic of standing plans?
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Which plan is most likely to specify short to intermediate term goals?
Which plan is most likely to specify short to intermediate term goals?
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How often do most firms revise their plans according to a rolling planning cycle?
How often do most firms revise their plans according to a rolling planning cycle?
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Which type of plan outlines general guides to action?
Which type of plan outlines general guides to action?
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What determines the framework for all other planning in an organization?
What determines the framework for all other planning in an organization?
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How does the presence of a few large buyers affect market prices?
How does the presence of a few large buyers affect market prices?
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What is the primary risk associated with a corporate-level strategy that focuses on a single business?
What is the primary risk associated with a corporate-level strategy that focuses on a single business?
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What is a characteristic of a global strategy in international business?
What is a characteristic of a global strategy in international business?
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What does backward vertical integration entail for a company?
What does backward vertical integration entail for a company?
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What is the primary goal outlined in Compaq's mission statement?
What is the primary goal outlined in Compaq's mission statement?
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Which type of diversification involves entering businesses that are not related to existing operations?
Which type of diversification involves entering businesses that are not related to existing operations?
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What does SWOT analysis focus on when formulating strategies?
What does SWOT analysis focus on when formulating strategies?
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Which aspect of the Five Forces Model does the power of suppliers refer to?
Which aspect of the Five Forces Model does the power of suppliers refer to?
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What is the effect of increased competition on profits according to the Five Forces Model?
What is the effect of increased competition on profits according to the Five Forces Model?
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What is the focus of a corporate-level strategy?
What is the focus of a corporate-level strategy?
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Which of the following is categorized as an opportunity in SWOT analysis?
Which of the following is categorized as an opportunity in SWOT analysis?
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What is a business-level strategy primarily concerned with?
What is a business-level strategy primarily concerned with?
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How does the potential for entry affect industry profits?
How does the potential for entry affect industry profits?
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Study Notes
Managerial Decision Making
- Decision making is the process where managers react to opportunities and threats.
- This includes analyzing options, and forming decisions about goals and courses of action.
- Decisions responding to opportunities aim to enhance organizational performance.
- Decisions responding to threats arise when adverse events affect the organization.
Types of Decisions
- Programmed decisions are routine and largely automatic.
- Managers have made similar decisions repeatedly in the past, often with clear rules or guidelines.
- An example is reordering office supplies.
- Non-programmed decisions deal with unusual situations not encountered before.
- No pre-set rules; these rely on managerial information, intuition, and judgment.
- An example is whether a company should invest in a new technology.
The Classical Model
- This is a prescriptive model that dictates how a decision should be made.
- It assumes managers have complete information.
- Ideally, managers rank their preferences amongst options and select the best course.
- In reality, access to complete information is often impossible.
The Administrative Model
- This model challenges the classical model's assumptions.
- It recognizes that managers don't always have complete information.
- Bounded rationality recognizes that a multitude of options and data makes fully considering all factors difficult.
- Incomplete information arises from various factors, like uncertainty and risk, or ambiguous information.
Why Information is Incomplete
- Risk implies a known probability of a given outcome failing or succeeding.
- Uncertainty indicates unknown probabilities for outcomes.
- Ambiguous information lacks clear meaning.
- Time constraints and/or high information costs restrict exhaustive option searches.
- It often leads managers to decide based on insufficient information, hence satisficing (accepting acceptable options rather than optimal ones).
Decision Making Steps
- Recognize the need for a decision.
- Frame the problem.
- Generate and assess alternatives.
- Choose among alternatives.
- Implement the chosen alternative.
- Learn from feedback.
Evaluating Alternatives
- Is the alternative course of action legal?
- Is the course of action ethical?
- Is the alternative economically feasible?
- Is the alternative practical to implement?
Cognitive Biases
- Heuristics are rules of thumb used to simplify complex situations.
- Prior hypothesis bias suggests pre-existing beliefs influence decision-making.
- Representativeness involves incorrectly generalizing decisions from small samples.
- Illusion of control overestimates a manager's impact over events.
- Escalating commitment involves excessive investment in a project even after negative feedback.
Group Decision Making
- Group think refers to biased decision-making in groups because of pursuing agreement.
- Managers may rally around a central idea, disregarding alternatives.
Improved Group Decision Making
- Devil's advocacy involves one member critically evaluating the decision process.
- Dialectical inquiry pairs competing groups for argument and counter-argument.
- Promote diversity to consider different views to enhance options
Organizational Learning & Creativity
- Organizational learning improves member understanding of the organization and its environment to raise effectiveness.
- Creativity involves finding novel ideas for a viable action course.
Senge's Learning Organization
- Personal Mastery (developing employees' learning and exploration)
- Mental Models (challenge employees to discover better methods)
- Shared Vision (a firm-wide approach to firm evaluation)
- Systems Thinking (understanding how actions in one area impact others throughout the firm).
Individual Creativity
- For creativity to thrive, the organization must support it.
- Risk-taking is essential for creative thought; however, periodic failures should be acceptable and even encouraged.
Building Group Creativity
- Brainstorming elicits diverse options without initial evaluation.
- Production Blocking happens when members can't process all ideas presented.
Building Group Creativity (continued)
- Nominal group technique creates structured written submissions to avoid production blocking.
- Delphi technique utilizes written submissions to gather and refine ideas from diverse group members, even across significant geographic distance.
The Manager as a Planner and Strategist
- Planning identifies and selects organizational goals and courses of action.
- The organizational plan from the planning process outlines the objectives.
- The pattern of managerial decisions to achieve these goals forms the organization's strategy.
Three Stages of Planning
- Determining mission and goals (defining the business)
- Strategy formulation (analysing current conditions and developing strategies)
- Strategy implementation (allocating resources and responsibilities to execute strategies).
Planning Process Stages
- Organizational Mission: the overall goal.
- Strategy Formulation: assessing the situation and creating strategies to fulfill the mission.
- Strategy Implementation: allocating resources to execute the formulated corporate strategy.
Levels of Planning
- Corporate: done by top management, considers where to operate; provides a framework.
- Business: done by divisional managers, identifies how each division will reach corporate goals and how to compete.
- Functional: done by department heads; shows how departments will help execute business-level strategies.
Planning at General Electric (Example)
- Demonstrates hierarchical planning.
- Shows the links between different managerial levels for setting goals and executing strategic plans.
Planning Levels (continued)
- Top-level planning is done by top managers who also approve business and functional-level plans.
Characteristics of Plans
- Time horizon (long-term, intermediate-term, short-term)
- Standing Plans - programmed decisions (e.g., policies, rules, SOPs);
- Single-use plans - non-programmed decisions (e.g., programs, projects).
Who Plans?
- Corporate-level planning is done by top managers.
- Business and functional level planning is done by divisional and department managers.
Why Planning is Important
- Planning defines the organization's present and future direction; defines purpose; it coordinates the firm, and ensures control.
Scenario Planning
- Generates forecasting of future conditions, analysing how to react effectively.
- Prepares for unforeseen events, improves planning adaptability.
Determining Mission and Goals
- Defining the business is the first step, identifying customers' requirements and competing corporations.
- Establishing major goals means determining who the firm is targeting in the business market.
Mission Statements
- Compaq - transforms computing into intuitive practices in all possible areas.
- AT&T - connects people and offers services globally.
Strategy Formulation
- SWOT analysis identifies strengths and weaknesses, and opportunities and threats.
- Managers use SWOT analysis to develop successful strategies.
Strategy Formulation (continued)
- SWOT Analysis - identify strengths, weaknesses, opportunities, and threats.
- The Five Forces Model - identifies the competitive forces (rivalry, supply, customers, opportunities, etc).
Corporate-Level Strategies
- Concentrate on a single business (e.g., McDonald's).
- Diversify to new businesses and services.
- Related diversification (similar business areas).
- Unrelated diversification (different business areas).
International Strategy
- Global strategy - standardized approach to products and markets—focuses on low cost.
- Multidomestic strategy - customized approach to products and markets—focuses on responsiveness.
Vertical Integration
- Backward - producing inputs (e.g., McDonalds growing potatoes).
- Forward - distributing outputs (e.g., McDonalds owning restaurants).
Vertical Value Chain
- Raw materials, intermediate manufacturing, assembly, distribution.
Business-Level Strategies
- Low cost, differentiation, focused low cost, focused differentiation.
Business Strategies (continued)
- Low cost – lower production costs compared to competitors.
- Differentiation – unique product qualities.
Business Strategies (continued)
- Firms focus on serving either the entire market or a specific portion of the market (e.g., focused low cost, focused differentiation).
Functional-Level Strategies
- Each department and functional area improves the value of the product and service.
- This can involve reducing operational costs or enhancing product features.
Goals for Successful Functional Strategies
- Superior Efficiency - maximizing output for inputs.
- Superior Quality - delivering products as expected.
- Superior Innovation - developing cutting edge product features and processes.
- Superior Responsiveness - customer-focused products, services and processes.
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Description
This quiz explores essential management concepts, including the Delphi Technique, planning processes, and decision-making strategies. Test your knowledge on organizational learning, creativity, and the role of diversity in effective management. Perfect for students and professionals looking to enhance their understanding of management dynamics.
