BUS315 Final Exam (1) PDF

Final Exam Study Guide BUS 315 Key Concepts Part 1: Introduction to Management: CH1 Four functions of management Management skills 1. Four functions of management - Planning: o Includes defining goals, establishing strategy, and developi...

Final Exam Study Guide BUS 315 Key Concepts Part 1: Introduction to Management: CH1 Four functions of management Management skills 1. Four functions of management - Planning: o Includes defining goals, establishing strategy, and developing plans to coordinate activities. - Organizing o Includes determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and who will make decisions. - Leading: o Includes motivating employees, directing the activities of others, selecting the most effective communication channel, and resolving conflicts. - Controlling: o Includes monitoring performance, comparing it with goals, and correcting nay significant deviations. 2. Management skills - Conceptual Skills: o Analyze and diagnose - Interpersonal Skills: o Working well with others - Technical Skills: o Possessing expert job knowledge - Political Skills: o Political adeptness History of Management: Management examples from history Industrial Revolution 1. Management examples from history - The Great Pyramids - The Great Wall of China - The Industrial Revolution - Wealth of Nations by Adam Smith 2. Industrial Revolution - Main characteristics: o Protestant work ethic o Political changes (American and French revolutions) o Invention of steam power - Important figures: o Adam Smith (1776) o James Watt - New Technology: o Steam engines & Cotton gin o Mass production through standardization and specialization o Steam-powered ships o Railroads o Telegraph - Energy: o Coal & Hydroelectric Organizational Behavior: What is Organizational Behavior? Big Five Model of Personality 1. What is Organizational Behavior? - OB is the systematic study and application of knowledge about how individuals and groups act within the organizations where they work. - Key Elements: o People o Structure o Technology o Environment - Research Methods: o Surveys o Field Studies o Laboratory Studies o Case Studies o Meta Analysis 2. Big Five Model of Personality - Personality: a unique combination of emotional, thought, and behavioral patterns that affect how a person reacts to situations and interacts with others - Extraversion: Describes sociability, assertiveness, and energetic behavior o In the workplace: Extroverts thrive in social and leadership roles, excel in team settings, and are often motivated by interaction, making them good at networking or sales. - Agreeableness: Indicates being cooperative, compassionate, and empathetic o In the workplace: Agreeable employees are good team players, likely to resolve conflicts peacefully and contribute to a positive work environment, fostering collaboration. - Conscientious: Involves being organized, dependable, and disciplined o In the workplace: Conscientious individuals are reliable, detail-oriented, and tend to be high performers, making them excellent in roles requiring precision and consistency. - Neuroticism (Emotional stability): Represents emotional reactivity and vulnerability to stress  o In the workplace: Those with lower neuroticism (high emotional stability) can handle stress well, stay calm under pressure, and are resilient in challenging environments. - Openness to experience: Reflects creativity, curiosity, and willingness to try new things o In the workplace: Employees high in openness are more likely to embrace innovation, adapt to change, and excel in creative problem-solving roles. Managerial Environment: CH2 Components of external environment PEST, SWOT analysis, and Porter’s Five Forces Model 1. Components of external environment - Political/Legal - Demographics - Economic - Sociocultural - Technological - Global 2. PEST analysis - It provides a framework for understanding how external forces can shape an organization's culture, structure, and behavior. - Political: o Examines government policies, regulations, political stability, and legal factors that can influence organizational decisions and behavior - Economic: o It looks at economic conditions like inflation, interest rates, unemployment, and economic growth, which affect business performance and employee behavior - Socio-cultural: o Focuses on societal trends, demographics, lifestyle changes, and cultural attitudes that can shape consumer behavior and organizational culture - Technological: o Considers technological innovations, advancements, automation, and infrastructure that can impact operations, productivity, and competitive advantage + - Environmental - Legal 3. SWOT analysis - It helps align internal strengths with external opportunities while addressing weaknesses and preparing for threats, leading to better-informed decisions regarding organizational behavior and culture. - Strengths:  o Identifying organizational strengths, such as strong leadership, skilled employees, or positive corporate culture, can help build on these areas to motivate teams and enhance performance. - Weaknesses o Recognizing internal weaknesses, like communication gaps or low employee morale, allows the organization to address these issues through training, restructuring, or improved management practices. - Opportunities o External opportunities, such as market growth or technological advancements, can shape organizational behavior by encouraging innovation, employee development, and proactive strategies. - Threats o Awareness of external threats, like competitive pressures or economic downturns, helps organizations adapt their behavior by fostering resilience, improving risk management, and maintaining team focus. 4. Porter’s Five Forces Model - It helps organizations assess the competitive landscape, understand potential risks, and develop strategies to maintain or improve their market position. - Threat of New Entrants: o The ease with which new companies can enter the industry and compete - Bargaining Power of Suppliers: o The power suppliers have to influence the price and quality of raw materials or services they provide - Bargaining Power of Buyers: o The power buyers (customers) have to influence the price and terms of purchase - Threat of Substitute Products or Services: o The likelihood that the customers will switch to a different product or service that fulfills the same need - Rivalry Among Existing Competitors: o The intensity of competition between existing firms in the industry Business Ethics: Ethical issues Ways to encourage ethical behavior 1. Ethical issues - Human rights: o Sweatshops, third-world community exploitation, international health issues, divestment, child labor, code of conduct - The environment: o Global warming, rainforest destruction, pollution, recycling, renewable energy, greenwashing, toxic waste, eco-innovations, illegal dumping, sustainable farming - Animal protection: o Factory farming, animal testing, humane treatment, wild animal habitat - Community: o Family farms, local business support, volunteer efforts, sustainable growth, philanthropic donations, nonprofit alliances, establishing foundations - Social Justice: o Fair wages, fatalities, union busting efforts, health & safety records, discrimination based on: race, gender, age, ability, religion, sexuality, ethnicity 2. Ways to encourage ethical behavior - Code of Ethics: o Establishes a clear standard for ethical conduct, promoting a culture of integrity and accountability within the organization. - Ethical leadership: o Leaders who demonstrate ethical behavior serve as role models for their employees, setting the tone for the organization’s ethical climate. - Ethics training: Can it be taught? o Critics: value systems learned in youth o Proponents: values can be learned, and ethical problem-solving increases ethical behavior, moral development, and awareness. Planning: CH5 Planning and Strategy defined Management level & plans development 1. Planning and Strategy Defined - Planning: the primary management function - Planning = Goals + Plans o Coping with uncertainty by formulating future courses of action to achieve specified results o Setting goals and deciding how to achieve them - Strategy: o A large-scale action plan that sets the direction for an organization o Represents an “educated guess” about what must be done in the long term for the survival or the prosperity of the organization or its principal parts 2. 3 management levels & 3 types of planning - Top Management: CEO, P, VP, general managers, division heads o Strategic planning: 1-5 years § Long-term decisions about overall direction of organization. Managers need to pay attention to environment outside the organization, be future oriented, deal with uncertain and highly competitive conditions. - Middle Management: functional managers, product-line managers, department managers o Tactical planning: 6-24 months § Implement policies and plans of top management, supervise and coordinate activities of first-line managers below, make decisions often without base of clearly defined information procedures. - First-line Management: unit managers, team leaders, first-line supervisors o Operational planning: 1-52 weeks § Direct daily tasks of nonmanagerial personnel; decisions often predictable, following well-defined set of routine procedures. Strategic Management: Steps in Strategic Management 1. Steps in Strategic Management - 1: Identify Mission, Goals, and Strategies - 2: External Analysis - 3: Internal Analyses - 4: Formulate Strategies - 5: Implement Strategies - 6: Evaluate Results 2. Step 1: Mission, Goals and Strategies - Customers: o Who are the firm’s customers? - Markets: o Where does the firm compete geographically? - Concern for survival, growth, and profitability: o Is the firm committed to growth and financial stability? - Philosophy: o What are the firm’s basic beliefs, values, and ethical priorities? - Concern for public image: o How responsive is the firm to societal and environmental concerns? - Products or services: o What are the firm’s major products or services? - Technology: o Is the firm technologically current? - Self-concept: o What are the firm’s major competitive advantages and core competencies - Concern for employees: o Are employees a valuable asset to the firm? - Note: o Vision statement o Business principle o Business concept o Customer profiling o Major goals of company culture 3. Step 2: External Analysis - Competition  - Components of environment - Threats and opportunities 4. Step 3: Strategy formulation, implementation, and evaluation - Internal Analyses: o Resources o Capabilities o Core competencies o Organizational strengths and weaknesses - Formulate: o Corporate o Business o Functional - Implement - Evaluate o How effective have strategies been? o What adjustments are necessary? 5. Strategies used by businesses: Growth, diversification, restructuring, global, cooperative/strategic alliances, web business models - Stability Strategy: o The organization continues to do what it’s doing - Renewal Strategy: o Organization addresses declining organizational performance § Retrenchment § Turnaround Entrepreneurship: Entrepreneurship Components of the Business Plan 1. Who is an entrepreneur (specific characteristics), and what is entrepreneurship? - Entrepreneur: o A person whose goal is to create or capitalize on new economic opportunities through innovation. o Individuals who notice opportunities and take the responsibility for mobilizing the resources necessary to produce new and improved goods and services. - Characteristics of Entrepreneurs: o Open to experience § They are original thinkers and take risks o Internal locus of control § They take responsibility for their actions o High self-esteem § They feel competent and capable o High need for achievement § They set high goals and enjoy working toward them - Entrepreneurship: o The process through which entrepreneurs create and grow enterprises 2. Components of the Business Plan - Executive Summary: o This is a critical component because many individuals (including venture capitalists) only read the summary - Business Concept: o Articulates the vision of the company, how you plan to meet the unique needs of your customers, and how you plan to make money doing that o Discusses feasibility studies that you have conducted for your products o Captures and highlights the value proposition in your product or service offerings - Market Analysis: o Defines the target market so that you can position your business to get its share of sales - Management Team: o Organizational Structure:  § Highlights the hierarchy and outlines responsibilities and decision-making powers o Management Team: § Highlights the details about key employees, including qualifications, skills, and experiences o Expertise: § Highlights the business expertise of your management team (budget control, personnel management, PR, event planning experiences, and strategic planning o Skills Gap: § Highlights plans to improve your company’s overall skills or expertise o Personnel Plan: § Highlights current and future staffing requirements and related costs - Marketing Plan: o Details what you propose to accomplish and is critical in obtaining funding to pursue new initiatives. § The 4 P’s · Product · Price · Place · Promotion - Financial Plan: o It is the most essential part of your business plan. It shows investors the timeframes you have scheduled to make profits. § Clearly defines what a successful outcome entails § Provides you with a vital feedback-and-control tolls § Anticipate problems - Operations and Management Plan: o It outlines how your company will operate § Organizational structure of the company § Expense and capital requirements to support the organizational structure Globalization: CH3 Pros & Cons of globalization Why and how companies expand globally? 1. Pros & Cons of globalization - Pros: Economic o Cheaper prices for products and services (more optimized supply chains) o Better availability of products and services o Easier access to capital and commodities o Increased competition o Producers and retailers can diversify their markets and contribute to economic growth - Cons: Economic o Some countries struggle to compete & face economic hardship o Foreign investors prevent economic development & economic diversification of a foreign country o Strong bargaining power of multinational companies over local governments o “Contagion effect” is most likely in times of crisis § Refers to the rapid spread of economic crises, trends, or behaviors from one country to others, often due to interconnected economies and global financial systems. o Problems of “social dumping” § Refers to the practice of companies or countries reducing labor standards, wages, or social protections to attract business or investment. This often involves exploiting cheaper labor costs in developing countries to gain a competitive advantage. - Pros: Cultural o Access to new cultural products (art, entertainment, education) o Understanding of foreign values and attitudes. Fewer stereotypes and misconceptions o Capacity to communicate and defend one’s values and ideals globally o Instant access to global information o Adaption of global cultural trends to local environment - Cons: Cultural o Dangers of cultural homogenization o Westernization, cultural imperialism, or cultural colonialism o Some small cultures may lose their distinct features o Spread of commodity-based consumer culture  o Dangerous or violent ideals can also spread faster - Pros: Political o Access to international aid and support o It contributes to world peace. It reduces the risk of invasions, more checks to big powers and limits nationalism o Smaller countries can work together and gain more influence internationally o International organizations are often committed to spread values like freedom and to fight abuses within countries o Governments can learn from each other - Cons: Political o State sovereignty is reduced o The functioning of international and supranational organizations is often not “democratic” in terms of representation and accountability o Big countries can shape decisions in supranational organizations o Sometimes countries can veto decisions and slow down decision-making processes 2. Why do companies expand globally? - Availability of supplies - New Markets - Lower labor costs - Access to finance capital 3. How do companies expand globally? - Note: Global Investment scale from minimal to significant o Global Sourcing o Exporting and Importing o Licensing o Franchising o Strategic Alliance – Joint Venture o Foreign Subsidiary Part 2: Organizational Structure: CH7 Models in organizational structure Factors influencing organizational design Six Key Elements of organizational structure 1. Models of Organizational Design - Organic - Collaboration (both vertical and horizontal) - Adaptable duties - Few rules - Informal communication - Decentralized decision authority - Flatter structures - Mechanistic - Rigid hierarchical relationships - Fixed duties - Many rules - Formalized communication channels - Centralized decision authority - Taller structures 2. Factors influencing Organizational Design - Strategy - Size - Technology - Environment Size & Structure: - Organic - Less than 2,000 employees can be organic - Mechanistic - More than 2,000 employees makes organizations become more Mechanistic. Strategy & Structure: - Certain structural designs work best with different organizational strategies: - Simple strategy → simple structure - Elaborate strategy → more complex structure Technology & Structure: Environment & Structure: - Dynamic environment - Organic structure - Stable environment - Mechanistic structure 3. Six Key Elements of Organizational Structure - Work specialization - Departmentalization - Functional - Groups employees based on work performed - Product - Groups employees based on major product areas in a corporation - Customer - Groups employees based on customers’ problems and needs - Geographic - Groups employees based on location served - Process - Groups employees based on the basis of work or customer flow - Authority and responsibility - CEO → President → VP , etc. - Span of control - Effective and efficient span depends on: - Employee experience and training (more they have, larger span) - Complexity of those tasks (more complex, smaller span) - Centralization vs. decentralization - Centralization - Decision making takes place at upper levels of the organization - Decentralization - Lower-level managers provide input or actually make decision - Formalization - How standardized an organization’s jobs are and the extent to which employee behavior is guided by rules and procedures Human Resources: CH9 Main Functions of HR Management Legal Environment Recruiting & Selection Process Sexual Harassment 1. Main Functions of HR: - Compliance - HR planning - Job Analysis & Job Description - Recruitment & Selection - Training & Development - Performance Appraisal - Compensation & Benefits - Motivation - Health & Safety - Labor Relations 2. The Legal Environment - Discrimination - Crucial aspects of employment legislation: - Race - Gender  - Disability - Affirmative action - Programs that ensure that decisions and practices enhance the employment, upgrading, and retention of members of protected groups - Differences in HRM Laws - Canada - Mexico - Australia - Germany 3. Recruiting & Selection Process - HRM Process: - Employment planning - Recruitment and downsizing - Selection - Recruiting Applicants - Selection - Interview - Most common method - Psychometric testing - Assessing the personality of the applicants – will they fit in? - Aptitude testing - Assessing the skills of applicants - In-tray exercise  - Activity based around what the applicant will be doing, e.g., writing a letter to a disgruntled customer - Presentation - Looking for different skills as well as the ideas of the candidate 4. Sexual Harassment - Any unwanted action or activity of a sexual nature that explicitly or implicity affects an individual’s employment, performance, or work environment Change Management and Innovation: Common Reasons for Resisting to Change Stress (Reasons and Management) Encouraging Innovation 1. Common Reasons for Resistance - Self interest - Fear of the unknown - Conscientious objection or differing perceptions - Suspicion - Conservatism 2. Stress Reasons - External Factors - Marketplace - Government laws and regulations - Technology - Labor markets - Economic changes - Internal Factors - Strategy - Composition of workplace - Employee attitudes - Personal Factors - Getting a job after graduating from college - Getting married - Having a child - Child leaving for college - Losing a job - Divorce - Death of a parent - Stress Management 3. Encouraging Innovation - Creativity - The ability to produce novel and useful ideas - Innovation - The process of taking a creative idea and turning it into a useful product, service, or method of operation Stimulate Innovation - Structural Variables and Innovation - Organic structures - Abundant resources - High interunit communication - Minimal time pressure - Work and nonwork support - HR Variables  - High commitment to training and development - High job security - Recruiting creative people - Culture and Innovation - Acceptance of ambiguity - Tolerance of the impractical - Low external controls - Tolerance of risks - Tolerance of conflict - Focus on ends - Open-system focus - Positive feedback Leadership: Leading and Managing Work Teams Leadership Styles 1. Leadership Styles - Four leadership styles - Directive - Supportive - Participative - Achievement oriented - Leadership styles - Transformational leaders - Pacesetter leaders - Leaissex-faire leadership - Coaching leadership - Authoritative leadership - Charismatic leadership - Responses to an Influence - Resistance: occurs when the influence target does not wish to comply - compliance: occurs when the target does not want to comply but they do - Commitment occurs when the target agrees to the request and actively participates and supports it. - Impression management = non verbal communication Understanding Groups and Managing Teams: Group defined & types of groups Group Behavior Team Effectiveness (Roles, Composition, Process, Work design) 1. Group defined and types of groups 2. Group behavior - Roles - Norms and conformity - Status systems - A prestige grading, position, or rank within a group - Group size - Small group (5-7 members) - Completing tasks faster - Figuring out what to do - Getting job done - Large group (12 or more members) - Problem solving - Finding facts - Gaining diverse input - Group cohesiveness 3. Team effectiveness (roles, composition, process, work design) - Roles - Composition - Process - Work Design Motivation: Motivation theories Job Design and Motivation Role of rewards in employee motivation 1. Motivation Theories: - McGregor’s Theory X and Theory Y - Theory X - Little ambition - Dislike work - Avoid responsibility - Must be closely controlled - Theory Y - Enjoy work - Seek and accept responsibility - Exercise self-direction - Herzberg’s Two-Factor Theory - Motivators (Extremely Satisfied) - Achievement - Recognition - Work itself - Responsibility - Advancement - Growth - Neutral - Hygiene Factors (Extremely Dissatisfied) - Supervision - Company policy - Relationship with supervisor - Working conditions - Salary - Relationship with peers - Personal life - Relationship with employees - Status - Security - McClelland’s Three-Needs Theory - Three acquired needs are work motives: - Need for achievement - Need for power  - Need for affiliation - Goal-Setting Theory 2. Job Design and Motivation - Internal rewards are obtained when an employee learns that he or she personally has performed well on a task he or she cares about 3. Role of rewards in employee motivation - Designing appropriate rewards programs  - Open book management - Employee recognition programs - Pay-for-performance - How to motivate for the 21st century? - Stop bribing them - Make them feel something - Emphasize progress - Form a cult (well, almost) - Country culture and motivation - Managers can’t assume that motivational programs that work in one geographic location are going to work in others. Managing Communication and Information: Factors Affecting Communication: Difference between Written and Verbal Communication Communication Styles Barriers & Overcoming communication Barriers 1. Factors Affecting Communication - Skill - Attitudes - Knowledge - Social cultural system 2. Difference between Written and Verbal Communication - Advantages - Tangible/verifiable - Permanent record - Stored for later reference - Well-thought out - Drawbacks - Time consuming - Doesn’t lend itself to feedback like oral communication 3. Communication Styles 4. Barriers & Overcoming Communication Barriers Foundation of Control: Areas of Control Steps in Control Process Types of Control 1. Areas of Control - Physical - Financial - Cultural - Structural - Informational - Human resources 2. Steps in the Control Process - Measuring - Comparing - Taking Action 3. Types of Control - Feedward Control Operations Management: Value Chain Concept Obstacles to Value Chain management 1. Value Chain Concept - The dynamic, competitive environment facing contemporary global organizations demands new solutions. - Organizational Processes & Leadership - Better demand forecasting - Select functions done collaboratively with other partners in the chain - New measures needed for evaluating the performance of various activities along the chain - Employees & Human Resources - Flexible job design - Effective hiring process - Ongoing training 2. Obstacles to Value Chain Management - Organizational barriers - Refusal or reluctance to share information - Reluctance to break up the status quo - Security issues - Cultural attitudes - Trust - Control - Required capabilities - Coordination and collaboration - Configuration that satisfies customers and suppliers - Education of internal and external partners - People - Commitment - Time - Energy