Management Study Guide

What are the six basic building blocks managers use in constructing an organization?
1.Designing Jobs
2.Grouping Jobs
3.Establishing reporting relationships
4.Distributing authority
5.Coordinating activities
6.Differentiating among positions

Sequential Interdependence
When the output of one unit becomes the input for another in sequential fashion

Reciprocal Interdependence
When activities flow both ways between units

Line Position
Responsible for achievement of organizational goals.
Very formal authority
Low administrative intensity

Staff position
provides expertise, advice, and support for line positions.
High administrative intesity

Advise authority
managers can choose whether to seek input or not

Compulsory advice
they have to consider the advice, but not listen to it

Functional authority
formal and legitimate authority

What is meant by job design?
The determination of an individual's work-related responsibilities. (4 things)

Job specialization
The degree to which the overall task of the organization is broken down into smaller components
-benefits=workers are proficient, lower transfer time, allows for usage of specialized equipment, and training costs are low
-limitations=can lead to workers becoming bored causing a lower quality of work.

Job rotation
alternative to job specialization that involves moving employees systematically from one job to another

Job enrichment
alternative to specialization adding more tasks to an employees jobs. Will result in employee wanting to be paid more

Job enlargement
alternative to specialization increases the scope of an employees job, as well as the control the worker has over the job

Work Teams
alternative to specialization allows an entire group to design the way that a set of related tasks will be performed

Departmentalization
Grouping jobs according to a logical arrangement linked with size.

Function Departmentalization
Grouping jobs that have the same activities (think sales)
-advantages: staffed by experts, easily able to coordinate activities, narrow set of skills
-disadvantages: slower decision making, looser idea of a system

Product Departmentalization
grouping activities around products or product groups. Typical in larger businesses
-Advantages:activities are integrated and coordinated, faster decision making, very clear accountability
-Disadvantages:Higher administrative costs

Customer Departmentalization
organizing work and workers into separate units responsible for particular kinds of customers
-Advantage:skilled specialist are used to deal with unique customer
-Disadvantage

Unity of command
Each person has a clear reporting chain to one boss

Scalar principle
A clear unbroken line of authority from the lowest person to the highest person

What is meant by management span of control?
Span of control is the number of people who report to one individual

Ralph. C. Davis span of management
30 subordinates for lower level managers and 9 for middle and top level managers

Lyndall F. Urwick and General Ian Hamilton span of management
Executive span should never exceed 6 subordinates

Flat vs Tall organizational structure
Flat structure means that there are less middle bosses. Flat typically results in higher moral, productivity, and better communication compared to a tall structure that has many tiers of management

What are the factors that affect an organizations span of control?
1.Competence of supervisor and subordinates (more competence = wider span)
2.Physical dispersion of subordinates (less dispersion, wider span)
3.Extent of non-supervisory work in mangers job (less=wider span)
4.Degree of required interaction (less interaction required, wider span)
5.Extent of standardized procedures (more standardization, wider span)
6.Similarity of tasks being supervised (more similar tasks, wider span)
7.Frequency of new problems (less frequency, wider span)

Decentralization vs Centralization
Decentralization- systematically delegates power and authority to lower levels
Centralization- systematically keeps power and authority in high-level managers

Organizational design
The overall set of structural elements and the relationships used to manage an organization

Bureaucratic model
An organization based on legitimate and formal systems of authority

Max Weber's guidelines for bureaucratic design
1.Distinct division of labor(each position filled by an expert)
2.Consistent rules and uniform task performance
3.A chain of command from top to bottom
4.Impersonal managers
5.Employment based on technical expertise
Strengths-efficiency, no favoritism, clear practices
Weaknesses- rigid and inflexible, hard to make exceptions or changes to rules, neglects human and social processes

Behavioral Model
Stresses attention to developing work groups and concern with interpersonal processes
8 important processes:leadership,motivation,communication,interactions,decision making, goal setting, control, and performance goals

Autocratic vs system behavior models
Autocratic- focuses on strength, authority and power. Set hierarchy among management.
System- focuses on team work and creating systems that make the organization more efficient

Corporate level strategy Vs Business level strategy and affect on organizational structure design
Corporate- choices partially determine design. (single product strategy, related diversification, unrelated diversification)
Business- directly influences and organizations design. Defender (tall and centralized). Prospector (flat and decentralized)

Functional organizational Design
Based on functional approach to departmentalization.
-Units are grouped into functional departments
-Takes many coordinators
-Works well with manufactoring

Conglomerate organizational design
Used by organizations that are composed of unrelated businesses.
-general managers oversee each business
-corporate staff is responsible for evaluating, allocating, deciding

Divisional organizational design
Multiple businesses in related area operate with organizational framework
-activities can be decentralized or centralized
-biggest advantage is opportunity for coordinating and sharing resources
-typically outperforms conglomerate or functional

Matrix organizational design
based on two overlapping bases of departmentalization.
-project managers responsible for project groups
-Multiple command structure (individual reports to functional superior and multiple managers)
-common when there is strong environmental pressure, large amount of information that needs processing, pressure for shared resources
-advantages: flexibility, motivated team members, cooperation, allows decentralization
-disadvantages:reporting relationships are uncertain, people take advantage of unlimited freedom, coordination time increases

What are the components of Jay Galbraith's STAR model of organizational design?
1.Strategy
2.Structure
3.processes
4.rewards
5.people

What is the primary role of HR?
activities directed at attracting, developing, and maintaining an effective workforce.
3 vital components: Strategic importance, legal environment, social environment

Major laws that affect Equal employment opportunity
Title VII and Civil Rights Act of 1964-forbidding discrimination on basis of sex, race , color, religion, and national origin
Age discrimination and Employment Act
Equal employment opportunity comission

Laws that affect compensation and benefits
Fair labor standards Act-federal minimum wage, overtime pay
Equal pay Act of 1963-Men and women be paid the same amount for same job
Employee retirement income security act- how organizations manage pension funds
Family and medical leave act of 1993-paid leave for family and medical emergencies

Laws that affect labor relations
National labor relations act-spells out procedure by which employees can establish unions (wagner act)
Labor-management relations act of 1947- limits union power, specifies management rights during union-organizing campaign

Occupational safety and health laws
OSHA- safe working conditions

What are some of the emerging issues with HR?
-sexual harassment
-alcohol and drug abuse
-AIDS
-Employee privacy

What is meant by HR planning?
Looking at market trends and forecasting labor demands

Objective performance appraisail
Concrete judgment of performance. comparing performance vs set goals

Judgmental performance appraisal
Includes rating and ranking of performance

Recency bias
Bias that occurs in evaluation when judgement is made on the most recent performance

Halo error
When performance in one dimension clouds judgement in other dimensions

Functional groups
permanent group created by organization to accomplish number of purposes with an unspecified time horizon

Informal/interest group
created by its members that may or may not have practical relevance

Task groups
created by organization to accomplish a relatively narrow set of goals in a specified time

A Team
group that functions as a unit, little or no supervision to carry out tasks

Problem-solving team
most popular type of team
created to solve specific problem then is disbanded

management team
consists of managers from different functions. coordinates work among other teams

Work team
responsible for the daily work of the organization. When empowered they are self-managed

Quality circle
-declining in popularity
-workers and supervisors who meet intermittently to discuss workplace problems

Stages of group or team development
forming, storming, norming, performing

what does role disruption result in?
role ambiguity, role conflict, role overload

Factors that increase group cohesiveness
1.intergroup communication
2.personal attraction
3.favorable evaluation
4.agreement on goals
5.interaction

Factors that reduce group cohesiveness
1.group size
2.disagreement on goals
3.intragroup competition
4.domination
5.unpleasant experiences

What is meant by healthy conflict?
occurs when you have a variety of personality types and everyone has their own perspectives and views. This causes light levels of conflict that really optimize performance levels

Aspects of organizational culture
-what we say
-norms and assumptions
-what we do
-what we believe

Elements of organizational culture
Artifacts- the visible aspect of a company
Beliefs and values-things that are known by a company
Assumptions-what is embedded and unique to a company

What can force cultural change?
mergers, acquisitions, and rapid change

How do you change an organizations culture?
change the following:
What gets rewarded
What gets punished
Allocation of resources
leaders actions and behaviors
what leaders pay attention to

What is meant by execution?
effectiveness, efficiency, priorities, and tactics

6 components of execution
1.value chain
2.elements
3.process
4.control systems
5.people
6.resource deployment

why is effective execution more important than strategy?
it is easy to come up with a good strategy but actually executing is what gets results

What is meant by operations management?
How an organization turns resources into products

What is meant by supply chain management?
process of managing operations control, resource acquisition, and inventory to improve overall efficiency and effectiveness
Purchasing
Inventory control

What is total quality management(TQM)?
strategic commitment from top managers to make quality a guiding factor in everything an organization does

8 dimensions of quality
1.performance
2.features
3.reliability
4.conformance-degree to which product reaches standards
5.durability
6.serviceability
7.aesthetics
8.perceived quality

Benchmarking
process of learning how other firms do things in an exceptionally high quality manner

Cycle time
the time needed by the organization to accomplish activities such as developing, making, and distributing products or services

Productivity
economic measure of efficiency. What is produced relative to what went in

Aggregate productivity
the total level of productivity that is reached by a country

industry productivity
the total productivity achieved by all the firms in an industry

company productivity
level of productivity inside a company

unit and individual productivity
this is the productivity reached by a department or individual

What 4 things is control used for?
-adapting to environmental change
-limiting the accumulation of error
-coping with complexity of an organization
-minimizing costs

operational control
focuses on the processes an organization uses to transform resources into products

financial control
focuses on the financial resources of an organization

Structural control
focuses on how an organizations structures are serving their intended purposes

strategic control
makes sure organization is heading towards its strategic goals

Why is having a high level of situational awareness critical to effective management?
business is a global system of interdependent, interconnected parts, so in order to be successful managers should know what is going on.

What are examples of external global forces and drivers?
economies, culture, language, politics, trade, legal, ethics, history, nature

What is included on BOE?
income statement (revenue, costs, and profit)
cash flow statement (cash creation or use)
balance sheet (assets an liabilities)
ROI
Payback

3 ways to lower break even point
lower fixed costs
lower variable costs
increase prices

What are the 4 business results financial measures that every job in a business will touch or be aligned with to some degree?
-revenue
-cost
-break-even
-cash flow

What are the 3 core areas that companies look for when hiring?
SKA:
Skills-typical skills (critical thinking, problem solving, etc...), management skills
Knowledge- Big picture, IT, global awareness, knowing when to ask
Attitude-makes all the difference

What is meant by an organizations mission?
purpose, scope, who we are, what we do, business we are in

What is meant by an organizations vision?
inspiration, what we want to be, desired state

What is meant by an organizations values?
Things we stand for, do's and don'ts, how we make decisions

Management vs leadership
Management- formal authority, give orders, implement plans, punish failures, mange individuals, organize work, power
Leadership- the ability to influence the activity or behavior of people, empower people, devlop ideas, failure=learn, coach teams

What is the Secret?
-the secret to management is to SERVE
S-see the future
E-engage and develop others
R-reinvest continuously
V-value relationships and results
E-embody the values

What is meant by strategic analysis?
Porters 5 forces and SWOT

PESTLE analysis
P-political
E-economic
S-socio-cultural
T-technological
L-legal
E-ecological

What are porters 5 forces?
1.Threats of new entrants and barriers to entry
2.Bargaining power of buyers (customers)
3.Bargaining power of Suppliers
4.threat of substitutes
5.rivalry among competitors

Threats of new entrants and barriers to entry
-risk associated with new industries and people entering into an already established industry
-entry barriers are anything that keeps others from entering-economies of scale, customer switching costs, capital requirements, advantages independent of size, brand loyalty, technology/patents

Bargaining power of buyers
-customers want low prices or high quality products
-bargaining power is high when...
Few buyers and they buy large quantities, products are standardized or undifferentiated, buyers face low or hardly any switching costs, buyers can backwardly integrate into the industry

Bargaining power of suppliers
high when-
concentrated suppliers, supplier is not dependent on industry as their main sources of revenue, customers face switching costs, suppliers offer differentiated and unique products, no substitutes exist, suppliers can forward integrate into the industry

Threat of substitues
high when-
cost of switching to the substitute is low, attractive price trade-off exists

rivalry among competitors
-stronger other 4 forces are the high intensity will be
-most intense when fixed costs are high, there isn't much differentiation, low switching costs, lots of competitors.

SWOT
-strength(internal)
-weakness(internal)
-opportunity(external)
-threat(external)

Corporate vs Business level strategy
Corporate- how to compete, where to compete
Business-
Who-which customers
What-
Why
How