Integrated Business Principles Exam Reviewer PDF 2024-2025

JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK INTEGRATED BUSINESS PRINCIPLES Pasado Playlist – Exam Reviewer For BSBA Nationalians A.Y. 2024-2025, Midterms – First Term, First Year...

JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK INTEGRATED BUSINESS PRINCIPLES Pasado Playlist – Exam Reviewer For BSBA Nationalians A.Y. 2024-2025, Midterms – First Term, First Year 1  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK ACKNOWLEDGEMENT This exam reviewer, focused on the Business Administration Core Courses, is part of the Junior League of Marketers' A.Y. 2024-2025 project, "Pasado Playlist," created to support the BSBA Marketing Management Nationalians in their academic journey. We extend our deepest gratitude to our esteemed advisers, Prof. Dennis Chlenton B. De Jesus and Dr. Aira May T. Balancio-Canlas, for their invaluable guidance. We also acknowledge the support of Dr. Jhanssen T. Tan, Program Chair of the Business Administration Department. MACEREN, JESSA MAE S. PRESIDENT TULLAO, JAIRAH P. ELLAMIL, ANDREA MARIELLE A. VP FOR INTERNAL AFFAIRS VP FOR EXTERNAL AFFAIRS LIWANAG, DERICK DEE S. SINFUEGO, LYRIZ JHOY S. VP FOR FINANCE SECRETARY MACASINAG, CHARMAINE MANGUERRA, NEIL ADRIAN A AUDITOR HEAD OF MEMBERSHIP 2 JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK CASTRO, JOSE GABRIEL M. PADUA, CARL HARDISON B. HEAD OF EVENTS HEAD OF PROMOTIONS SERRANO, CATLYN GWEN H. PINEDA, TRISHA MAE N. HEAD OF CREATIVES HEAD OF CORPORATE AND BAUTISTA, CHRISTIAN V. NUNAG, PRINCESS MIKYLLA P. EXECUTIVE COMMITTEE EXECUTIVE COMMITTEE NUNAG, JHON WESHLEE D. SWIN, ELYZIA JOY EXECUTIVE COMMITTEE EXECUTIVE COMMITTEE BERMAS, ANGELICA V. NAGUIT, BIANCA ALYZA M. MEMBERSHIP COMMITTEE MEMBERSHIP COMMITTEE MANINANG, JOHN RENZ B. QUIAMBAO, JADES MEMBERSHIP COMMITTEE MEMBERSHIP COMMITTEE SARIEDDINE, VANESSA RAMZI A. BANAYAT, LAURENCE JAY C. MEMBERSHIP COMMITTEE EVENTS COMMITTEE 3 JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK MAGLALANG, ANGEL B. MANTO, JAN HARVEY B. EVENTS COMMITTEE EVENTS COMMITTEE MAMARIL, GEREIGN LIME QUIZON, QUINNE RAVEN F. EVENTS COMMITTEE EVENTS COMMITTEE SANTOS, STEFANNY AKI B. TARDEO, ALEXIS RAIN A. EVENTS COMMITTEE EVENTS COMMITTEE TAGUMPAY, RODMAR T. PENA, ABIGAIL CAMILLE A. EVENTS COMMITTEE PROMOTIONS COMMITTEE RAZON, MARC LESTER D. DEL ROSARIO, ALVIN M. PROMOTIONS COMMITTEE CREATIVES COMMITTEE BITUIN, DEAN P. OCAMPO, MEO MAR T. CREATIVES COMMITTEE CREATIVES COMMITTEE SANTOS, MIGUEL JEREMY D. UNIVERSITY STUDENT COUNCIL - BSBA REPRESENTATIVE 4 JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK Topic 1 Introduction of Management o Chief Privacy Officer: works on such problems as safeguarding  Managers customer information in the digital world. - a person responsible for the work performance of group members.  MIDDLE LEVEL MANAGERS - holds the formal authority to commit - Managers who are neither executives nor first- organizational resources, even if the approval of level supervisors, but who serve as a link others is required. between the two groups.  Management - Responsible for implementing programs and policies formulated by top-level management. - the process of using organizational resources to - Responsible for making many of the judgment achieve organizational objectives through calls and trade-offs that shape the firm’s success planning, organizing and staffing, leading, and controlling.  FIRST LEVEL MANAGERS - also used as a label for a specific discipline, for - Managers who supervise operatives the people who manage, and for a career choice. - Supervisors help shape the attitudes of new employees toward the firm. - Newcomers who like and respect their first- Levels of Management level manager tend to stay with the firm longer.  TOP LEVEL MANAGERS Types of Managers - C-level manager is a recent term used to describe a top-level manager  FUNCTIONAL AND GENERAL - They make major decisions affecting the present MANAGERS and future of the firm. - Supervise the work of employees engaged in - Who give the organization its general direction specialized activities such as accounting, o COO (Chief Operating Officer): engineering, information systems, food Responsible for day-to-day operations and preparation, marketing, and sales execution of strategies. Focuses on internal - General managers are responsible for the work processes, efficiency, and performance. of several different groups that perform a o CEO (Chief Executive Officer): variety of functions Highest-ranking executive, responsible for  ADMINISTRATORS overall company vision, strategy, and - is typically a manager who works in a public decisionmaking. Leads the organization and sets (government) or nonprofit organization, its direction including educational institutions, rather than in o CFO (Chief Financial Officer): a business firm Manages financial aspects of the company, - Managers in all types of educational institutions including budgeting, financial planning, are referred to as administrators. reporting, and risk management. Handles  SMALL-BUSINESS OWNERS financial strategy and ensures financial health - typically invest considerable emotional and o Chief of Staff: physical energy into their firm a top level advisor who serves as a confidant,  ENTREPRENEURS gatekeeper, and all-around strategic consultant. - person who founds and operates an innovative o Chief Commercial Officer: business has major responsibility for customer relationships and for managing the company interface with the customer. 5 JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK  TEAM LEADERS - A manager in such a position coordinates  LEADING the work of a small group of people while - The managerial function of influencing others to achieve organizational objectives. acting as a facilitator or catalyst. Leadership is the interpersonal aspect of - Found at several organizational levels and management. are sometimes referred to as project - Managers should be comfortable and managers, program managers, process confident commanding their team managers, and task force leaders. members’ daily tasks as well as during periods of significant change or challenge. This involves projecting a strong sense of The Process of Management direction and leadership when setting goals and communicating new processes, products and services, or internal policy. - Leadership can manifest itself in a number of ways, including recognizing when employees need an extra boost of reinforcement and praise to handling conflicts between team members fairly and decisively. - Often, managers may function as leaders even during small personal interactions by  HUMAN RESOURCES modeling supportive, encouraging, and - the people needed to get the job done motivational qualities.  FINANCIAL RESOURCES  CONTROLLING - the people needed to get the job done - The managerial function of ensuring that  PHYSICAL RESOURCES performance conforms to plans. - firm’s tangible goods and real estate - Controlling involves comparing actual  INFORMATION RESOURCE performance to a predetermined standard. - the data that the manager and the - To ensure all of the other functions are organization use to get the job done working toward the success of a company, managers should consistently monitor Managerial Functions employee performance, quality of work, and the efficiency and reliability of  PLANNING completed projects. - Setting goals and figuring out ways of reaching them. - Control (and quality control) in - Considered the central function of management is about making sure the management. ultimate goals of the business are being - Involves decision-making. adequately met, as well as making any - Much of one's planning function consists of necessary changes when they aren't. working independently to determine what responsibilities must be given to which MANAGERIAL ROLES PLANNING employees, setting priority levels for certain are behaviors adopted to perform various tasks, and creating timelines. management functions, like leading and planning, organizing, strategizing, and solving problems.  ORGANIZING AND STAFFING Within an organization, managers of different levels - Organizing is the process of making sure have different responsibilities that may overlap the necessary human and physical resources are available to carry out a plan and achieve Henry Mintzberg classified managerial roles based organizational goals. on their purpose. He developed - The ensures the availability of necessary 10 managerial roles and divided them in 3 categories, human resources to achieve organizational grouping the roles that share similar features. Some goals. 6  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK of these features can be applied to two or more roles a sense of purpose to reach organizational at the same time. goals. - Example: A manager sets a goal for the team and communicates his expectations, making sure that people understand them. He monitors their progress and provides feedback and resources if needed. -  Liaison - Managers in the liaison role develop and maintain internal and external relationships. They are a connection link that bridges the gap between employees of different levels to ensure work is done smoothly. - Liaisons transfer knowledge through different members of the organization, up and down the chain of command, and can Interpersonal Roles also involve their business contacts from outside the company. This category includes the roles which concern - Examples: A manager coordinates with interactions with people working inside and outside people inside the company, as well as the organization. Basically, the majority of managers’ coordinating work between the company’s time is spent on interpersonal communication units. A manager coordinates with people through which things get done. outside the organization, such as buyers, suppliers, and strategic partners.  Figure Head - This role requires performing social, ceremonial, and legal responsibilities. The Informational roles Figurehead represents the organization, as well as motivates the team to achieve goals. The informational category involves creating, For people, this managerial role is a source receiving, or sharing information with coworkers. of power and authority. The manager collects information from sources both - Examples: Managers in the figurehead role inside and outside the organization, processes it, and attend social event where they promote delivers it to those who need it. their company and Greeting a potential  Monitor business client and giving a tour. - They gather internal and external sources,  Leader trying to identify problems and - The leader role is the most pivotal as it opportunities for growth. In other words, shows to which extent a manager’s they scan the environment to assess the potential is realized. Managers are in current state of things in a company and see charge of their people's performance, which if corrective action is needed. Examples: Seeking customer feedback to see how may mean leading a team, a department, or exactly you can improve your products or an entire organization. The responsibilities services. Monitoring industry trends, like include hiring and training (direct products made by competitors or leadership) and encouragement of government regulatory changes, in order to employees (indirect leadership). Leaders meet standards and stay on track influence and motivate people, giving them  Disseminator - Receiving information from various sources, a manager in the disseminator role 7  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK is responsible for sharing it with those who - Example: When two members of a team may need it. This can be done in both have a conflict, it’s the manager’s verbal and written forms. Examples: A one- responsibility to help them resolve it. on-one conversation between a manager  Resource Allocator and an employee where a certain issue is discussed. / Developing a proposal for a - The resource allocator role involves new product design, submitting it to upper deciding how to best use the organization’s management for approval, and providing it limited resources, such as money, time, to the employees so that they can get equipment, materials, and even staff. familiarized with it - Examples: A manager divides funding  Spokesperson between the departments of his  Managers in a spokesperson role speak for organization, based on their current and their organization, defending the company's interests. Their responsibility is to make the future needs, A marketing manager divides organization look good in the eyes of funding between media advertising and potential or new clients and the general promotions, A resource manager distributes public. Examples: A manager attends the project workload across people. annual shareholders’ meeting, informing the  Negotiator attendees about the results her team has - This managerial role includes negotiating achieved this year and presenting statistics. A manager speaks on behalf of the company with external parties, where they represent at a conference. the interests of their organizations, as well as negotiating with internal parties, such as Decisional Roles other departments or team members. The Decisional roles are about action. By communicating better negotiation skills managers have, the with people and using information, managers make higher their chances to come to an decisions that lead the organization to its goals. agreement with customers, better organize the work process, and gain access to more  Entrepreneur resources. - This role develops and implements new - Examples: A manager negotiates pricing, ideas or strategies which often means delivery, and design with customers. coming up with innovative solutions. As an entrepreneur, the manager initiates and supports change in his organization. Five Key Managerial Skills - Example: A manager who analyzes the progress of team initiatives might realize  TECHNICAL SKILLS that certain processes are inefficient — for - Understanding and proficiency in specific example, perhaps a lack of undocumented tasks. information causes repeated mistakes. The - Budgeting, scheduling, analysis, tech use. manager might recommend the creation of - Business expertise like marketing. handbooks to act as a source of internal - Also known as hard skills. knowledge and know-how.  INTERPERSONAL SKILLS  Disturbance Handler - Interpersonal skill: Teamwork, cooperation. - The disturbance handler role deals with - Communication key to this skill. unexpected situations and changes. They - Termed soft skills, not less important. implement corrective action to resolve a - Crucial for leadership and success. variety of disturbances, such as a decrease - Weak interpersonal skills lead to failure. in crucial business planning metrics or - Multiculturalism: the ability to work issues between people. effectively and conduct business with people from different cultures. 8  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK  CONCEPTUAL SKILLS - The behavioral approach to management - Conceptual skill: Holistic organization emphasizes improving management view. through the psychological makeup of - Units' interdependence, change impacts. people. - Understanding industry, community, forces. - Sometimes referred to as the human - Vital for top-level managers due to external resources approach because of the focus on contact making optimum use of workers in a  DIAGNOSTICS SKILLS positive way, such as making jobs - Managers solve problems with diagnostic motivational skill. o Hawthorne effect - Requires technical, human, conceptual, - the phenomenon in which people political skills. behave differently in response to - Excitement in finding solutions. perceived attention from  POLITICAL SKILLS evaluators. - Obtaining power crucial for effectiveness. o Theory X and Theory Y - Political skill used to achieve objectives. - contrasting approaches to - Networking, impressing vital. understanding employee - Balancing political skill with competence. motivation and management. - Overemphasis hinders real work, customer o Maslow's Hierarchy of Needs satisfaction, productivity - Motivation from basic to self- actualization. EVOLUTION OF MANAGEMENT THOUGHT  QUANTITATIVE APPROACH - Initially management theories were - to management is a perspective on developed out of the practical experience of management that emphasizes the use of a the managers in the industrial organization. group of methods in managerial decision Later on, managers borrowed ideas from making, based on the scientific method several other fields of study like science, sociology, anthropology, etc.  SYSTEMS PERSPECTIVE  Management Thought o Systems perspective - Management thought refers to the theory - A way of viewing aspects of an that guides management of people in the organization as an interrelated organization. system  CLASSIC APPROACH o Entropy - Develop to manage work and people in - the tendency of a system to run order to manage all the new factories that down and die if it does not receive were a central part of the Industrial fresh inputs from its environment. Revolution. o Synergy o Scientific management - means that the whole is greater - the application of scientific than the sum of the part methods to increase individual  CONTINGENCY APPROACH workers’ productivity. - A perspective on management that o Administrative management emphasizes that no single way to manage - The use of management people or work is best in every situation. It principles in the structuring and encourages managers to study individual managing of an organization and situational differences before deciding  BEHAVIORAL APPROACH on a course of action 9  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK Topic 2 Functions of Management Planning 4. Develop action plans to reach goals and objectives TYPES OF PLANNING - An action plan consists of the specific  STRATEGIC PLANNING steps necessary to achieve a goal or - A firm’s overall master plan that shapes objective. its destiny. This is the big-picture 5. Develop Budgets planning. It’s about setting long-term - Planning usually results in action plans goals for the whole business and that require money to implement deciding what direction the company 6. Implement the plans should take. Think of it as the map that - If the plans developed in the previous guides the company’s overall journey. five steps are to benefit the firm, they - Top Management must be put to use.  TACTICAL PLANNING 7. Control the plans - Tactical planning takes the big goals - The control process measures from strategic planning and breaks them progress toward goal attainment and down into smaller, more specific plans. indicates corrective action if too much These are usually short-term actions deviation is detected. that help achieve the bigger goals. - Middle Management 8. Make contingency plans (Optional)  OPERATIONAL PLANNING - an alternative plan to be used if the - This is the day-to-day planning. It original plan cannot be implemented or focuses on the details of how things a crisis develops should be done on a daily basis. Operational plans make sure that  STRATEGY everything runs smoothly, like - The organization’s plan, or organizing schedules, tasks, and comprehensive program, for processes. achieving its vision, mission, and - Middle Management goals in its environment.  CONTINGENCY PLANNING - This type of planning is like having a THE NATURE OF BUSINESS STRATEGY backup plan. It’s about preparing for (SAFS) unexpected events or problems that could disrupt the business - First-Line Management FRAMEWORK FOR PLANNING 1. Define the present Situation - includes measuring success and examining internal capabilities and external threats. 2. Establish Goals and Objectives - Goals are broader than objectives, whereas objectives function as smaller goals that support the bigger goals. 3. Analyze the environment to forecast Aids  Strategy Rests on Unique Activities and Barriers to Goals and Objectives - Competitive strategy means - attempts to predict which internal and deliberately choosing a different set external factors will foster or of activities to deliver a unique value. hinder attainment of the desired ends  A Sustainable Strategic Position Requires Trade Offs 10  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK - After a firm finds a strategic position consulting with a wide range of (or place in the market), it can best parties at interest. sustain it by making trade offs with - An extreme approach to gathering other positions. multiple inputs for strategy is a - Trade-offs are necessary when development termed crowdcasting activities are incompatible. 2. Analyzing the Realities  Fit Drives Both Competitive Advantage - The strategist must make valid and Sustainability assumptions about the environment - Strategy includes efficiently combining - Firms must constantly change in order activities related to making a product to be aligned with their key or service. Company activities fit and environments. support each other to form an - Sometimes management can shape the effective system. nature of the business to match the  Strategy Involves More Than Operational external environment Effectiveness 3. Performing a SWOT Analysis - A starting point in understanding the - SWOT Analysis nature of business strategy is to  A method of considering the understand that it involves more than strengths, weaknesses, operational effectiveness or being opportunities, and threats in a efficient. given situation  Considered the most applicable to the early stages of strategic THE DEVELOPMENT OF BUSINESS and marketing STRATEGY (SVM)  It’s elements are included in  STRATEGIC PLANING the general planning model - encompasses those activities that lead and in strategic inventory to the statement of goals and objectives and the choice of strategies PREPARING FOR ANALYSIS (CSAC) to achieve them 1. It is important to be clear about what you are  VISION doing and why. - an idealized picture of the future of 2. It is important to select appropriate the organization contributors. 3. Allocate research and information-gathering  MISSION tasks. - identifies the firm’s purpose and 4. Create a workshop environment by where it fits into the world. Specifying a encouraging open communication among mission answers the question “What participants business are we really in? CONDUCTING THE ANALYSIS GOOGLE - “To organize the world's information and make it universally accessible and useful.”  STRENGTHS - internal attributes and resources that STARBUCKS - “To inspire and nurture the human give an organization an advantage over spirit – one person, one cup and one neighborhood at others in achieving its objectives a time.”  WEAKNESSES TESLA - “To accelerate the world’s transition to - internal limitations or factors that place sustainable energy.” an organization at a disadvantage in comparison to others. THREE MAJOR APPROACHES TO  OPPURTUNITIES DEVELOPING STRATEGY (GAP) - external factors or situations that an 1. Gathering Multiple Inputs organization can capitalize on to - Many strategic leaders arrive at their achieve its goals ideas for the organization’s future by 11  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK  THREATS - Alliances are partnerships with other - external factors that could potentially companies negatively impact an organization's - Sharing resources with other companies success to succeed in the market - Growth of alliances due to the enormous costs and time involved in developing and distributing products when a company starts from zero 2. Diversification of goods and services - “Don’t put all your eggs in one basket” - It serves as a hedge in case the market for one group of products or services softens. - It can lead to immediate growth at the same time 3. Sticking to core competencies - Guard against spreading yourself too thin. - Confine efforts to business activities they perform best—their core LEVELS OF BUSINESS STRATEGIES competencies - A strategy chosen to reach an important goal depends considerably on the level  BUSINESS LEVEL it serves within the organization 1. Product Differentiation - Attempts to find a niche or offer a  CORPORATE-LEVEL SRATEGY product or service that are different - total direction of the enterprise and the from available alternatives. selection of specific businesses - Create a new market in which  BUSINESS-LEVEL STRATEGY competition does not exist, referred to - focuses on the question of how to as a blue ocean strategy compete in each of our businesses. 2. Focus Strategy  FUNCTIONAL-LEVEL STRATEGIES - The organization concentrates on a - formulated to specify actions required specific regional or buyer market. to successfully implement strategies at - Specialized medical products, such as the corporate and business levels leg and arm prostheses, are based on a STRATEGY LEVELS FOR DIVERSIFIED & focus or niche strategy 3. Cost Leadership SINGLE-BUSINESS FIRMS - Provides a product or service at a low  Diversified Business Firms price in order to gain market share. - A company that has many different - A cost leadership strategy can create market products like sony; may mga ethical problems because of what middle managers tuloy suppliers must do to cut costs  Single Business Firms - Only focuses on one product or market  FUNCTIONAL LEVEL 1. Find and Retain the best people TYPES OF BUSINESS STRATEGIES - A foundation strategy is to find and  CORPORATE LEVEL retain competent people. 1. Strategic Alliances - Concentrating on hiring talent can be - Common approach to business considered a functional level strategy because people are usually hired into specific departments 12  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK 2. High Speed 4. The level of existing competition that - Satisfy customer needs more quickly affects investment in marketing and and you will make more money. research and thus erodes profits - High-speed managers focus on speed in - Every shopper knows it; the greater the all of their business activities, including competition, the lower the price product development, sales response, 5. The threat of new market entrants to and customer service. intensify competition and further affect - “time is money,” they use time as a pricing and profitability competitive resource - Some businesses are more difficult to enter than others, often depending on the amount of investment and time required both in the home country and elsewhere  OPERATING PLANS - strategic plans alter the destiny of the firm - Involve organizational efficiency (doing things right), whereas strategic plans involve effectiveness (doing the right things) - focus more on the firm than on the external environment - tend to be drawn for a shorter period than strategic plans  POLICIES - General guidelines to follow in making decisions and taking action - are written; some are unwritten, or implied. FIVE COMPETITIVE FORCES - Many firms have strict policies against 1. The power of customers to affect pricing employees accepting gifts and favors and reduce profit margins from vendors or potential vendors - Informed customers become empowered customers.  PROCEDURES - If customers can readily purchase your - A customary method for handling an product or service from a competitor, activity. It guides action rather than you must keep costs low. thinking. 2. The power of suppliers to influence the - Procedures exist at every level in the company’s pricing organization, but they tend to be more - Manufacturing companies are complex and specific at lower levels. dependent on suppliers for raw  RULES materials and components. - A specific course of action or conduct 3. The threat of similar or substitute that must be followed. It is the simplest products to limit market freedom and type of plan. reduce prices and thus profits - When rules are violated, corrective - Alternatives to a company’s products action should be taken. are a constant menace even for stable products and services. EXAMPLE: Any employee engaged in an accident while in a company vehicle must report that 13  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK accident immediately to his or her 6. Reviewing Performance supervisor. - Performance reviews are conducted at agreed upon intervals. When objectives are not attained, the manager and group member mutually analyze what went wrong. Topic 3 Problem Solving and Decision Making  MANAGING BY OBJECTIVES (MBO)  PROBLEM - systematic application of goal setting - Discrepancy between ideal and actual and planning to help individuals and  DECISION firms be more productive. - A choice among alternatives - Began in the 1950s  DECISION MAKING - People setting many objectives for - Heart of management themselves - A distinguishing characteristic of a - An MBO program usually involves manager’s job is the authority to make sequential steps decisions. MANAGING BY OBJECTIVES: STEPS  NON-PROGRAMMED DECISION 1. Establishing organizational goals - A decision that is difficult because of - Top-level managers set organizational its complexity and the fact that the goals to begin the entire MBO process. person faces it infrequently. Managers determine what the - Significant problems affect an organizational units must accomplish to important aspect of an organization. meet these goals - All strategic decisions are non- 2. Establishing unit objectives programmed. - Unit heads then establish objectives for - Formulating policies to help managers their units. Objectives set at lower levels of the firm must be designed to know what to do when faced with a meet the general goals established by problem top management.  PROGRAMED DECISION - A decision that is repetitive, or routine, and made according to a 3. Reviewing group members’ proposal specific procedure. - group members make proposals about - Top-level management does not how they will contribute to unit concern itself with non routine objectives. Each team member is given decisions. the opportunity to set objectives in - Middle managers generally make both addition to those that meet the strategic goals routine and nonroutine decisions. 4. Negotiating or Agreeing - First-level managers make more routine - Managers and team members confer decisions together at this stage to either agree on GREATEST MANAGEMENT DECISION EVER the objectives set by the team members MADE or negotiate further 5. Creating action plans to achieve  Disney – Used Mickey mouse instead of objectives Mortimer. Mickey and Minnie debuted in - After the manager and team members “Steamboat Willie” in 1928 agree upon objectives, action plans  Bill Gates, in 1981, decided to license MS/ must be defined. Sometimes the action DOS to IBM plan is self-evident. 14  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK  Robert Woodruff was president of CocaCola - Investigate how effectively the chosen during World War II. Nickel for a bottle- alternative solved the problem created loyal customers - Evaluating and controlling your decisions will help you improve your STEPS IN PROBLEM SOLVING AND decision-making skills. DECISION MAKING 1. Identify and Diagnose the problem - Identify a gap between desired and BOUNDED RATIONALITY ON DECISION actual conditions MAKING - Sometimes a problem is imposed on a - Decision making not entirely rational manager - He or she must search actively for a  BOUNDED RATIONALITY worthwhile problem or opportunity - means that people’s finite (somewhat - The ability to think critically helps a limited) mental abilities, combined person get at the real problem with external influences over which 2. Develop Alternative Solutions they have little or no control, prevent - Generate alternative solutions them from making entirely rational - All kinds of possibilities are explored, decisions even some that seem unrealistic  NEUROECONOMICS - Keep digging until they find the best - Behavioral economics emphasizes that solution people are not entirely rational - Often the problem solver will find a decision makers. creative alternative solution  SATISFICING DECISION - At times, a standard solution will work - A decision that meets the minimum adequately standards of satisfaction 3. Analyze the alternative solutions - Comparing the relative value of the alternatives  HEURISTICS - Performing a cost and savings analysis - A rule of thumb used in decision of each alternative making. - Possible outcome of an alternative - Helps the decision maker cope with should be part of the analysis masses of information, but 4. Choose 1 alternative Solution oversimplification can lead to - Make a decision inaccurate or irrational decision making. - A major factor is the goal the decision  INTUITION should achieve. - An experience-based way of knowing - The goals sought for in making the or reasoning in which weighing and decision are also referred to as the balancing evidence are done decision criteria. unconsciously and automatically. - Ambiguity remains in most decisions - Intuition can be based mostly on 5. Implement the decision experience or mostly on feeling - Converting a decision into action - A decision is seldom good if people resist its implementation - Represents execution, putting plans into action 6. Evaluate and control 15  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK o inability to make a decision due to over-thinking a problem  EMOTIONAL INTELLIGENCE - How effective you are in managing your feelings and reading other people can affect the quality of your decision making - refers to qualities such as understanding one’s own feelings, empathy for others, and the regulation of emotions to enhance living FACTORS INFLUENCING DECISION  Self-Awareness - understand MAKING (8) your own emotions; to know  INTUITION – same sa taas their strengths and limitations  PERSONALITY AND COGNITIVE and have high self-esteem INTELLIGENCE  Self-Management- ability to - A particularly relevant personality control one’s emotions and act dimension is a person’s propensity for with honesty and integrity; taking risks. prevent a person from - A cautious, conservative person throwing temper tantrums typically opts for a low-risk solution when activities do not go as - An extremely cautious person may planned avoid making major decisions for fear  Social Awareness- having of being wrong. empathy for others and having  Decisiveness intuition about organizational o The extent to which a person problems makes up his or her mind  Relationship management - promptly and prudently the interpersonal skills of clear  Perfectionism and convincing o People who seek the perfect communication, the ability to solution to a problem are disarm conflicts, and the usually indecisive because ability to build strong personal they hesitate to accept the fact bonds. that a particular alternative is  QUALITY AND ACCESSBILITY OF good enough INFORMATION  Cognitive (traditional - An effective decision usually requires Intelligence) high-quality, valid information. o Types of intelligence such as - Able to base decisions upon solid data. imagination, adaptability, - A frequent accessibility problem is to and practical intelligence. rely on information from the Internet o Intelligent and well- because it is easy to access educated people are more  Anchoring - In the decision likely to identify problems and making process, placing too much make sound decisions than are value on the first information those who have less received and ignoring later intelligence and education information.  Analysis Paralysis  POLITICAL CONSIDERATIONS 16  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK - Many decisions are based on political - A manager who places a high value on considerations such as favoritism, the personal welfare of employees tries alliances, or the desire of the decision to avoid alternatives that create hardship maker to stay in favor with people who for workers and implements decisions wield power in ways that lessen turmoil. - The decision maker may select data that  PROCRASTINATION support the position of an influential - Procrastinate - To delay in taking person whom he or she is trying to action without a valid reason. please - Results in indecisiveness and inaction  Revenge - political and an and is a major cause of self-defeating emotional factor in decision behavior. making. - Procrastination is a deeply ingrained  Professional integrity - arrives at behavior pattern what he or she thinks is the best decision and then makes a diligent attempt to convince management  Integrity - aware of not alienating DECISIONS MAKING STYLES people in power, yet supports what - A manager’s typical pattern of making he or she thinks is the best decision decisions.  DEGREE OF CERTAINTY - Decision styles differ in two - divided into three categories: fundamental ways: how information is certainty, risk, and uncertainty. used and how options are created  Certainty - exists when the facts are well known and the 1. Decisive (one option, less information) outcome can be predicted - Value action, speed, efficiency, and accurately. consistency.  Condition of risk - exists - Once a plan is in place they stick with it when a decision must be made and move on to the next decision based on incomplete, but 2. Flexible (many options, less information) accurate, factual information. - Focuses on speed, yet adaptability is  Uncertainty - a situation emphasized. where the probabilities of - Gather just enough data to choose a line various outcomes are not of attack and quickly change course if known, and the future is highly needed unpredictable 3. Hierarchic (one option, more  CRISIS AND CONFLICT information) - Decision makers who are adversely - Analyze a great deal of information and affected by crisis perceive it to be a seek input from others. stressful event - They expect a decision to be final and - Under crisis, some managers do not relatively permanent. bother dealing with differences of 4. Integrative (many options, more opinion because they are under so much information) pressure. - Uses input from many sources and - Conflict relates to crisis because both makes decisions involving multiple can be an emotional experience courses of action. - The decision may be modified in the  VALUES future as circumstances change - All decisions are based on values. 17  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK  GROUP DECISIONS - The process of several people contributing to a final decision ADVANTAGES - The quality of the decision might be higher. - Major errors are likely to be avoided. - Helpful in gaining acceptance and commitment. - Help people overcome blocks in their thinking DISADVANTAGES - Consumes considerable time and may result in compromises that do not really solve the problem. - Groupthink - A psychological drive for consensus at any cost 18  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK  Orientation and placement - enables Topic 4 Organizing the graduate to explore hidden talents and identify the roles that they like and BASIC ELEMENTS OF ORGANIZING are good at The term organization structure and design refer to  Satisfaction & Attrition - offers the the overall set elements that can be used to configure opportunity for a change of scenery and an organization. (JDRDC) challenge people, leading to increased 1. Job specialization satisfaction and lower employee attrition. 2. Departmentalization DISADVANTAGES: 3. Reporting relationship  Inefficiencies - When an employee joins 4. Distribution of authority a new role, they need to learn the ropes 5. Coordination. before reaching their optimum productivity level.  JOB SPECIAIZATION  Misunderstanding - staying (partially) - The degree to which the overall task of the involved in the role, leading to role organization is broken down and divided unclarity. into smaller component parts  Disgruntled employee - who will not BENEFITS: like the new job, lack motivation, and  Workers performing small, simple tasks may even consider leaving the will become very proficient at each task. organization.  Transfer time between tasks decreases.  Lack of opportunity - Job rotation is  Develop specialized equipment to assist often horizontal, meaning that people with that job will not get a promotion but rather a  When a specialized employee is absent different role on the same level. or leaves, the manager can train a BEST PRACTICES: replacement inexpensively  A means to an end - the goal of job LIMITATIONS: rotation should be clear from the  Workers who perform highly specialized beginning. jobs may become bored and dissatisfied.  Employee buy-in - This can be done by  The anticipated benefits of specialization clearly explaining the benefits of job do not always occur rotation for the employee and convincing the employee rather than coercing them. Alternatives to Specialization  Training - Ensure that people are  JOB ROTATION involves properly trained before they are rotated systematically moving employees from into a different job one job to another  Monitoring and feedback - ensure you monitor them closely, and provide ample BENEFITS: feedback.  Learning - Job rotation is an excellent  Planned job rotation - A more way to transfer specific skills, formalized approach to job rotation is knowledge, and competencies, leading to called job pathing or career pathing human capital accumulation.  Employee replacement - By A. JOB ENLARGEMENT (temporarily) deploying a peer who is - A job design technique wherein there is somewhat familiar with the role and very an increase in the number of tasks familiar with the company, the critical associated with a certain job role can be filled quickly. 19  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK - It means increasing the scope of one’s employees end up being more mentally duties and responsibilities. stimulated. - Aims at increase in the workforce BENEFITS FOR THE COMPANY: flexibility  Cut Down on Absence Days or BENEFITS: Turnover - The employees who find  Reduced Monotony - can help reduce satisfaction in their jobs won’t try to boredom and make it more satisfying and escape the duties. fulfilling for the employees  Cut Down on the Costs - cut down on  Increased Work Flexibility - an the hiring and training costs as well. increased scope of carrying out tasks that  More Productivity and Profit - are versatile and yet very similar in employees who had their jobs enriched certain aspects. perform better at work. This means an  No Skills Training Required - Since the increase in productivity for the entire individual has already been performing company. the task in the past, there is no great  Choose Future Managers - it’s easier to requirement for imparting of new skill spot early future managers.  Better Corporate Morale - people who DISADVANTAGES: are trusted will try to act more  Training costs usually increase professionally, thus being more  Demand for pay should increase because motivated the worker is doing more tasks  In many cases the work remains boring  DEPARTMENTALIZATION and routine even after job enlargement. - The grouping of jobs according to some logical arrangement B. JOB ENRICHMENT - Attempts to increase both the number of A. FUNCTIONAL tasks a worker does and the control the DEPARTMENTALIZATION worker has over the job. - The most common base for - Continually assign new and challenging departmentalization, especially among tasks, thereby increasing employees’ smaller organizations opportunity for growth and - It groups together those jobs involving advancement. the same or similar activities BENEFITS FOR THE EMPLOYEE: ADVANTAGES:  Meaningful Work - to increase an  Each department can be staffed by individual’s satisfaction is to give him a experts in that functional area. work that has a clear outcome  Supervision is facilitated because an  Job Advancement - offers employees individual manager needs to be familiar the tools to improve the skills they with only a relatively narrow set of already have. Moreover, they can learn skills. some new skills, including managerial  Coordinating activities inside each ones. department is easier  Knowledge of the Outcomes - Feedback is essential when trying to DISADVANTAGES: achieve a certain level of performance.  Decision making tends to become slower  Staying Focused - When given decision- and more bureaucratic. making roles that involve more authority, 20  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK  Employees may also begin to concentrate too narrowly on their own unit and lose D. LOCATION sight of the total organizational system. DEPARTMENTALIZATION  Accountability and performance become - Groups jobs on the basis of defined increasingly difficult to monitor geographic sites or areas ADVANTAGE: B. PRODUCT  It enables the organization to respond DEPARTMENTALIZATION easily to unique customer and - Most Larger businesses adopt this form environmental characteristic in the of departmentalization for grouping various regions activities at the business or corporate level DISADVANTAGE:  A larger administrative staff may be ADVANTAGES: required if the organization must keep  All activities associated with one product track of units in scattered location or product group can be easily integrated and coordinated.  The speed and effectiveness of decision  ESTABLISHING REPORTING making are enhanced. RELATIONSHIPS  The performances of individual products - The establishment of reporting relationships or product groups can be assessed more among positions. The purpose of this easily and objectively activity is to clarify the chain of command and the span of management. DISADVANTAGES: - Chain of Command - is an old concept,  Managers in each department may focus first popularized in the early years of the on their own product or product group to twentieth century the exclusion of the rest of the - Span of Management - Another part of organization. establishing reporting relationships is  Administrative costs rise because each determining how many people will report to department must have its own functional each manager specialists for areas such as market research and financial analysis o TALL ORGANIZATION - A form of organization with multiple C. CUSTOMER layers of management and supervision DEPARTMENTALIZATION between the top leadership and the - Activities and functions are grouped front-line employees based on the specific needs and o FLAT ORGANIZATION preferences of different customer - A form of organization with relatively segments or types. few layers of management, making it - Each customer department focuses on less bureaucratic the unique requirements and demands of its designated customer base, Tall vs. Flat Organization enhancing customer satisfaction and - make sure organization doesn’t have too responsiveness many managers— nor too few. - too little hierarchy, decisions don’t get ADVANTAGE: made or are made wrongly by  Organization is able to use skilled employees who lack experience, specialist to deal with unique customers accountability, or motivation to do the or customer groups work of the missing managers 21  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK  Sequential interdependence  DISTRIBUTION OF AUTHORITY - the output of one unit becomes the input - he determination of how authority is to be for another in a sequential fashion. This distributed among positions. creates a moderate level of - Authority is power that has been interdependence. legitimized by the organization  Reciprocal interdependence - exists when activities flow both ways A. DELEGATION PROCESS between units. This form is the most - Delegation is the establishment of a complex pattern of authority between a superior and one or more subordinates. Structural Coordination Techniques - the process by which managers assign a - Methods and strategies used by portion of their total workload to others organizations to manage and streamline B. DECENTRALIZED AND communication, decision-making, and CENTRALIZED PERSON workflow among different departments, - Decentralization is the process of teams, or individuals within the systematically delegating power and organization. authority throughout the organization to - Managerial hierarchy, rules and middleand lower-level managers. procedures, liaison roles, task forces, - Centralization is when the authority and integrating departments and decision-making power are Electronic Coordination Techniques concentrated at the top levels of the - Refers to the use of digital technology hierarchy, typically with senior and electronic systems to facilitate and management or a single central streamline communication, authority figure collaboration, and coordination within  COORDINATING OF ACTIVITIES organizations. - the activities of the departments must be - Email, Instant Messaging, Video linked-systems must be put into place to Conferencing, Collaboration software keep the activities of each department focused on the attainment of Bureaucracy as an Organization Structure organization goals.  ORGANIZATIONAL STRUCTURE - The primary reason for coordination is - the arrangement of people and tasks to that departments and work groups are accomplish organizational goals interdependent.  BUREAUCACY - The greater the interdependence - A rational, systematic, and precise form between departments, the more of organization in which rules, coordination the organization requires if regulations, and techniques of control departments are to be able to perform are specifically defined effectively Principles of Organization in a Bureaucracy THREE MAJOR FORMS OF 1. HIERARCHY OF AUTHORITY INTERDEPENDENCE - Each lower organizational unit is  Pooled interdependence controlled and supervised by a higher - represents the lowest level of one. interdependence. Units with pooled - The person granted the most formal interdependence operate with little authority occupies the top place of the interaction. hierarchy. - 22  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK 2. UNITY OF COMMAND determining the best organization design for any - The classical management principle particular circumstances stating that each subordinate receives Four Basic Situational Factors assigned duties from one superior only 1. TECHNOLOGY and is accountable to that superior - The level and type of technology an 3. TASK SPECIALIZATION organization uses have a profound - Organizations designate separate impact on its operations. Technological divisions or departments such as new advancements can automate processes, product development, customer service, influence the skill set required of and information technology. employees, and determine the speed and 4. RESPONSIBILITIES ANDJOB efficiency of communication within the DESCRIPTIONS organization - Each employee follows a precise job 2. ENVIRONMENT description and therefore knows his or - The external environment in which an her job expectations. organization operates, including factors - The responsibility and authority of each like market conditions, regulatory manager is defined clearly in writing. changes, economic trends, and 5. LINE AND STAFF FUNCTIONS competitive pressures, can shape its - Line functions involve the primary strategies, resource allocation, and purpose of an organization or its overall approach to doing business primary outputs. 3. ORGANIZATIONAL SIZE - Staff functions assist the line functions - The size of an organization, whether it's - Staff managers take responsibility for a small startup or a large multinational important functions such as human corporation, affects its structure, resources and purchasing communication flows, and decision- making processes. 4. LIFE CYCLE - An organization's life cycle stage, whether it's in the startup, growth, maturity, or decline phase, influences its priorities and focus. Startups may prioritize innovation and rapid growth, while mature organizations may focus THE BUREAUCRATIC FORM OF on stability and cost control ORGANIZATION Basic Forms of Organization In a bureaucracy, power is concentrated at the top, 1. FUNCTIONAL (U-FORM) DESIGN yet many more employees occupy power levels in the - The functional design is an arrangement organization. Note that team leaders are typically based on the functional approach to found at the first level or middle level of departmentalization. management. - This design has been termed the U-form Situational Influences on Organization Design (for unitary) approach.  The situational view of organizing design - Grouped into functional departments - is based on the assumption that the optimal such as marketing and production. design for any given organization depends on a set of relevant situational factors. In other words, situational factors play a role in 23  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK 2. CONGLOMERATE (H-FORM) DESIGN  INDIVIDUAL DIFFERENCES - H-form for holding, as in holding - personal attributes that vary from one company approach person to another - Made up of a set of unrelated businesses - Each set of businesses is operated by a PERSONALITY AND INDIVIDUAL general manager who is responsible for BEHAVIOR its profits or losses  PERSONALITY 3. DIVISIONAL (M-FORM) DESIGN - he relatively stable set of psychological and - M based (for multidivisional) approach, behavioral attributes that distinguish one is based on multiple businesses in person to another related areas within a larger BIG FIVE PERSONALITY TRAITS organizational framework.  AGREEABLENESS - A strategy of related diversification - Refers to a person's ability to get along with 4. MATRIX DESIGN others. - Combines elements of both functional - High level agreeableness - be gentle, and divisional structures cooperative, forgiving, understanding and - Employees often report to multiple good-natured supervisors or managers, depending on - Lower agreeableness - be irritable, short- the nature of the task or project they are tempered, uncooperative, and generally working on antagonistic 5. HYBRID DESIGN  CONSCIENTIOUSNESS - Represents a hybrid of two or more of - refers to the person's ability to manage the common forms of organization multiple tasks and to consistently meet design. deadlines. - An organization may have five related - High level conscientiousness - organized, division and one unrelated division, systematic, careful, thorough, responsible, making its design a cross between an M and self-disciplined form and an H form  NEUROTICISM Topic 5 Leading - The extent to which person experiences anxiety or is poised, calm, resilient and IBP Lesson 5: LEADING secure. - Excitable, insecure, reactive, and subject to  PSYCHOLOGICAL CONTRACT - the overall set of expectations held by an extreme mood swings. individual with respect to what he or she - Prone to be anxious and exhibit signs of will contribute to the organization and what vulnerability the organization will provide in return.  EXTRAVERSION  CONTRIBUTIONS - Person’s comfort level with relationships - what the individual provides to the - Extraverts are sociable, talkative, assertive, organizations and open to establishing new relationships.  INDUCEMENTS  OPENESS - what the organization provides to the - Person’s rigidity of beliefs and range of individual interests - People with high level of openness are  PERSON-JOB FIT willing to listen to new ideas and to change - the extent to which the contributions made their own ideas, beliefs, and attitudes as a by the individual match the inducements result of new information offered by the organization 24  JUNIOR LEAGUE OF MARKETERS NATIONAL UNIVERSITY-CLARK  THE MYERS-BRIGGS FRAMEWORK likely to accept this behavior from their - An approach to understanding personalities leader in organizations  MACHIAVELLIANISM - Based on the classic work of Carl Jung, - Used to describe behavior directed at differentiates people in terms of four gaining power and controlling the behavior general dimension of other. - Individuals who are more Machiavellian o Extraversion (E) versus Introversion (I). tend to be rational and non-emotional, may - Extraverts get their energy from being be willing to lie to attain their personal round other people, whereas introverts are goals, may put little weight on loyalty and worn out by others and need solitude to friendship, and may enjoy manipulating recharge their energy. others behavior. o Sensing (S) versus intuition (N)  SELF-ESTEEM - The sensing type prefers concrete things, - The extent to which a person believes that whereas intuitive prefer abstract concepts she is a worthwhile and deserving o Thinking (T) versus feeling (F) individual. - Thinking individuals base their decisions - A person with high self-esteem is more more on logic and reason, whereas feeling likely to seek high job be more confident in individuals base their decisions more on her ability to achieve higher levels of feelings and emotions performance, derive greater Intrinsic o Judging (J) versus perceiving (P) satisfaction from her accomplishments. - People who are the judging type enjoy  RISK PROPENSITY completion or being finished, whereas - The degree to which an individual is perceiving types enjoy the process and willing to take chances and make risky open-minded situations. decisions. - A manager with a high risk propensity, for OTHER PERSONALITIES TRAITS AT WORK example, might be expected to experiment  LOCUS OF CONTROL with new ideas and gamble on new - The extent to which people believe that products their behavior has a real effect on what happens to them. Attitudes and Individual Behavior - People who believe that individuals are in  ATTITUDES control of their lives are said to have an - complexes of beliefs and feelings that internal locus of control. people have about specific ideas, situations - People who think that forces beyond their or other people control dictate what happens to them are said to have an external locus of control  SELF-EFFICACY  COGNITIVE DISSONANCE - It is a person's beliefs about his or her - It refers to the mental conflict that occurs capabilities to perform a task. when a person's behaviors and beliefs do not align.  AUTHORITARIANISM - The extent to which an individual believes WORK RELATED ATTITUDES that power and status differences are