Management in Organizations Chapter 1
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Questions and Answers

What is the definition of management according to Frederick Winslow Taylor?

  • Organizing resources effectively
  • Forecasting and planning
  • Controlling people
  • Knowing exactly what you want people to do and then seeing that they do it in the best and cheapest way (correct)

    • What are the four major components of management outlined in the contemporary approach?

    Planning, organizing, leading, controlling

    Managers at the very top levels of the hierarchy are known as first-line managers.

    False

    The _____ of management (or the span of control) is the number of subordinates who report directly to a specific manager.

    <p>span</p> Signup and view all the answers

    What does a competitive intelligence program involve?

    <p>Gathering and analyzing information about the competition’s activities and general business trends.</p> Signup and view all the answers

    Which industries are more susceptible to technological changes?

    <p>Communications</p> Signup and view all the answers

    Competitive Benchmarking is useful for comparing an organization's operations with those of its competitors.

    <p>True</p> Signup and view all the answers

    The External Factor Evaluation (EFE) matrix is a strategic management tool used to visualize and prioritize _____________ confronting a business.

    <p>opportunities and threats</p> Signup and view all the answers

    What are the advantages of a hybrid structure?

    <p>Alignment of corporate and divisional goals.</p> Signup and view all the answers

    Matrix structure involves superimposing a horizontal set of divisional reporting relationships onto a hierarchical functional structure.

    <p>True</p> Signup and view all the answers

    What factors influence the choice of the best organizational structure for a company?

    <p>Technology, size, environment</p> Signup and view all the answers

    Unit and small-batch production is most suitable for custom-produced products made in small quantities primarily by ____________.

    <p>craft specialists</p> Signup and view all the answers

    Match the technological interdependence with its description:

    <p>Pooled interdependence = Units operate independently but their efforts are important to the success of the organization as a whole. Sequential interdependence = One unit must complete its work before the next unit in the sequence can begin work. Reciprocal interdependence = One unit's outputs become inputs to the other unit and vice versa.</p> Signup and view all the answers

    What are the most important positive aspects of decentralization? (Select all that apply)

    <p>Easing the heavy workloads of executives</p> Signup and view all the answers

    Delegation involves assigning only work tasks to others without transferring responsibility and authority.

    <p>False</p> Signup and view all the answers

    Authority is the right to make decisions, carry out actions, and direct others in matters related to the duties and goals of a position. Responsibility is the obligation to carry out duties and achieve __________ related to a position.

    <p>goals</p> Signup and view all the answers

    Which factors lead to decentralization?

    <p>Technological diversity</p> Signup and view all the answers

    What are the major forms of divisions in a divisional structure? (Select all that apply)

    <p>Consumer divisions</p> Signup and view all the answers

    What is the purpose of strategic group mapping?

    <p>To recognize favorable and unfavorable positions within the market landscape and guide firms in determining which strategic groups to target for market entry.</p> Signup and view all the answers

    Which of the following is a characteristic of prospector companies?

    <p>Have many product lines</p> Signup and view all the answers

    The size of the circles in a strategic group map depends upon the __________ of a strategic group in the total industry sales revenue.

    <p>share</p> Signup and view all the answers

    Core competencies are characterized by being easily substitutable by competitors.

    <p>False</p> Signup and view all the answers

    What is benchmarking?

    <p>A tool to determine a firm's competitive activities</p> Signup and view all the answers

    Benchmarking involves identifying best practices used by competitors and implementing them in the firm's activities.

    <p>True</p> Signup and view all the answers

    Explain the risks associated with a cost leadership strategy.

    <p>Competitors may introduce innovative methods, neglect customer preferences for quality, or successfully imitate the strategy.</p> Signup and view all the answers

    The characteristic of a differentiation strategy is offering value to customers through ______ characteristics of products or services.

    <p>unique</p> Signup and view all the answers

    What is the main focus of a diversification strategy?

    <p>Increasing market power compared to competitors</p> Signup and view all the answers

    What are some common problems that may cause joint ventures to fail?

    <p>Poor service or criticism from customers</p> Signup and view all the answers

    What are the risks associated with being solely focused on a single industry?

    <p>Having all of the firm's eggs in one basket</p> Signup and view all the answers

    What is the main purpose of forming a joint venture between companies?

    <p>Enhance communication, networking, global expansion, and pursue complex opportunities</p> Signup and view all the answers

    A joint venture between two firms often leads to shared __________ ownership in the new entity.

    <p>equity</p> Signup and view all the answers

    ____ involves reducing the cost per unit by expanding the production scale of a single product type.

    <p>Economies of scale</p> Signup and view all the answers

    Match the following integration strategies with their descriptions:

    <p>Backward integration = Seeking ownership or increased control of a firm's suppliers. Forward integration = Gaining ownership or increased control over distributors or retailers. Horizontal integration = Seeking ownership or increased control over a firm's competitors.</p> Signup and view all the answers

    What are some situations where a joint venture is considered an effective strategy?

    <p>When distinct competencies of firms complement each other well</p> Signup and view all the answers

    Strategic alliances and networks involve partial ownership by the partnering firms.

    <p>True</p> Signup and view all the answers

    Study Notes

    Introduction to Management

    • Management: the process of administering the activity of an organization or a division of that organization
    • Definition: achieving organizational goals by engaging in the four functions of planning, organizing, leading, and controlling
    • Organization: a group of people working together in a structured fashion to attain a set of goals

    Manager's Job

    • A manager: someone whose primary activities are a part of the management process
    • Manager's role: administering one activity, not necessarily a leader, but a person who is responsible for the work performance of group members
    • Manager's authority: formal power to commit organizational resources, with control over time, workloads, decisions, technology, equipment, money, standards, meetings, and/or other people

    Functions of Management

    • Planning: establishing organizational goals and plans, including forecasting, goal setting, and planning
    • Organizing: allocating resources, coordinating activities, and assigning tasks to achieve organizational goals
    • Leading: influencing and motivating individuals and teams to achieve organizational goals
    • Controlling: monitoring and correcting performance to ensure goal achievement

    Managerial Roles

    • Top managers: managers at the top levels of the hierarchy, responsible for the entire organization, with direct responsibility for the upper layer of middle managers
    • Middle managers: managers at the middle levels of the hierarchy, responsible for implementing plans and coordinating activities
    • First-line managers: managers at the lowest levels of the hierarchy, responsible for supervising and coordinating the work of non-managerial employees

    Organizational Environment

    • External environment: factors outside the organization, including customers, competitors, suppliers, and government regulations
    • Internal environment: factors within the organization, including employees, culture, and resources

    Planning

    • Establishing organizational goals and plans: including forecasting, goal setting, and planning
    • Managing innovation and change: including the nature of change and innovation, organizational life cycles, and the change and innovation process

    Decision Making

    • Defining decision making: the process of selecting a course of action from available options
    • Factors affecting decision making: including the types of decisions, the decision-making process, and the roles of managers in decision making

    Organizing

    • Organizational structure: the way in which positions are arranged and linked to achieve organizational goals
    • Types of departmentalization: including functional, divisional, hybrid, and matrix structures

    Organization Design

    • Designing organization structures: including the influence of contingency factors, such as technology, size, and environment
    • Types of organization structures: including functional, divisional, hybrid, and matrix structures
    • Factors influencing organization design: including strategy, size, technology, and environment### Disadvantages of Functional Structure
    • Slow response time on multifunctional problems
    • Backlog of decisions at top of hierarchy
    • Bottlenecks due to sequential tasks
    • Restricted view of organization among employees
    • Inexact measurement of performance
    • Narrow training for potential managers

    Uses of Functional Structure

    • Small or medium-size organizations with limited products or services
    • Stable environments, such as insurance companies
    • Large organizations with inter-related products

    Divisional Structure

    • Type of departmentalization where positions are grouped according to similarity of products, services, or markets
    • Three major forms: product divisions, geographic divisions, and customer divisions
    • Advantages:
      • Fast response to environmental change
      • Simplified coordination across functions
      • Simultaneous emphasis on division goals
      • Strong orientation to customer requirements
      • Accurate measurement of division performance
      • Broad training in general management skills
    • Disadvantages:
      • Duplication of resources in each division
      • Reduction of in-depth expertise
      • Heightened competition among divisions
      • Limited sharing of expertise across divisions
      • Restriction of innovation to divisions
      • Neglect of overall goals

    Hybrid Structure

    • Combines functional and divisional structures at the same level of management
    • Advantages:
      • Alignment of corporate and divisional goals
      • Functional expertise and/or efficiency
      • Adaptability and flexibility in divisions
    • Disadvantages:
      • Conflicts between corporate departments and divisions
      • Excessive administrative overhead
      • Slow response to exceptional situations
    • Uses:
      • Organizations with uncertain environments and functional expertise
      • Powerful organizations with sufficient resources for divisions and functional departments

    Matrix Structure

    • Superimposes a horizontal set of divisional reporting relationships onto a hierarchical functional structure
    • Advantages:
      • Decentralized decision making
      • Strong project or product coordination
      • Improved environmental monitoring
      • Fast response to change
      • Flexible use of human resources
      • Efficient use of support systems
    • Disadvantages:
      • High administrative costs
      • Potential confusion over authority and responsibility
      • Heightened prospects for interpersonal conflicts
      • Excessive focus on internal relations
      • Overemphasis on group decision making
      • Possible slow response to change

    Weighing Contingency Factors

    • Contingency factors: technology, size, and environment
    • Technology:
      • Technological complexity: unit and small-batch production, large-batch and mass production, continuous-process production
      • Technological interdependence: pooled, sequential, and reciprocal
    • Size:
      • Measured in number of employees, gross sales, or profits
      • Trends: adding departments and levels, increasing staff positions, additional rules and regulations, decentralization
    • Environment:
      • Stable or unstable environments
      • Mechanistic characteristics: centralized decision making, many rules and regulations, hierarchical communication channels
      • Organic characteristics: decentralized decision making, few rules and regulations, both hierarchical and lateral communication channels

    Strategic Management

    • Art and science of formulating, implementing, and evaluating cross-functional decisions to achieve organizational objectives
    • Involves managing resources, analyzing internal and external forces, and developing strategies to achieve vision and mission
    • Example: Nike's transformation into a global brand with a vision to inspire and innovate for every athlete in the world

    External Environment

    • General environment: political and legal forces, economic forces, social, cultural, demographic, and ecological forces, technological forces

    • Industry environment: competitive intelligence, industry dynamics, competitor vulnerabilities, and potential threats to market position

    • Sources of strategic information:

      • Surveys and interviews
      • On-site observations
      • Defensive competitive intelligence
      • Reverse engineering
      • Government agencies
      • Online databases
      • Direct contact with corporations
      • Competitive benchmarking### Competitive Intelligence and AI

    • AI-driven competitive intelligence accelerates research productivity

    External Environment Analysis

    • Critical external factors should be recorded and prioritized
    • Key external factors include: • Relationships with suppliers or distributors • Market share • Range of competing products • Global economies • Foreign affiliations • Proprietary and key account advantages • Price competitiveness • Technological advancements • Population shifts • Interest rates • Pollution abatement

    Porter's Five Forces Model

    • The model determines the industry's profitability and competitiveness
    • The five forces are: • Threat of New Entrants • Intensity of Rivalry among Competitors • Threat of Substitute Products • Bargaining Power of Buyers • Bargaining Power of Suppliers

    Threat of New Entrants

    • Barriers to entry include: • Economies of scale • Product differentiation • Switching costs • Access to distribution channels • Government policies

    Intensity of Rivalry among Competitors

    • Factors influencing rivalry include: • Number of balanced competitors • Slow industry growth • High fixed costs • Lack of differentiation • Size of production capacity • High exit barriers

    Threat of Substitute Products

    • Pressure from substitutes increases with: • Declining relative prices • Decreasing consumer switching costs

    Bargaining Power of Buyers

    • Buyer power is strong when: • Buyers purchase a large quantity of the industry's output • Buyers have the potential to integrate upstream • Buyers have multiple suppliers for standardized products • Buyers pay a low switching cost

    Bargaining Power of Suppliers

    • Supplier power is strong when: • The industry is dominated by a limited number of suppliers • Products or services are unique with no substitutes • Suppliers can integrate downstream and compete with current buyers

    External Factor Evaluation (EFE) Matrix

    • Steps in constructing the EFE Matrix: • List factors • Assign weights • Rate factors • Multiply weights by ratings • Sum the weighted scores

    Strategic Groups and Strategic Types

    • Strategic group mapping is an analytical tool for: • Showing market or competitive positions of rival firms • Identifying strategic groups and market positions • Determining target market entry

    Strategic Types

    • Types of competitors: • Prospectors • Defenders • Analyzers • Reactors

    Internal Environment Analysis

    • Internal analysis involves: • Gathering and assimilating information about the firm's management, marketing, finance, accounting, production, and operations • Identifying strengths and weaknesses

    Resources and Competencies

    • Resources are: • Tangible (e.g. financial, physical) • Intangible (e.g. knowledge, trust, reputation)

    Competencies

    • Competencies are: • Firm's ability to leverage resources • Processes and practices for delivering goods or services

    Core Competencies

    • Core competencies are: • Unique combinations of resources and competencies • Providing competitive advantage • Meeting four criteria: valuable, rare, costly to imitate, and non-substitutable

    Value Chain Analysis

    • Value chain analysis is used to: • Identify and understand value-creating and non-value-creating activities • Primary activities: • Inbound logistics • Operations • Outbound logistics • Marketing and sales • Service • Support activities: • Procurement • Technological development • Human resources management • Firm infrastructure

    Internal Factor Evaluation (IFE) Matrix

    • Steps in constructing the IFE Matrix: • List factors • Assign weights • Rate factors • Multiply weights by ratings • Sum the weighted scores

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    Description

    Test your understanding of management in organizations, covering topics such as the manager's job, organizational environments, and planning. This quiz is based on Chapter 1 of the course.

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