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Introduction to Business Exam 2

Chapter 7: What is the role of management?
Mangers- responsible for developing and carrying out the management process.
Management evolves to meet needs and constraints in the organization’s internal and external environments.
The process of guiding the development, maintenance, and allocation of resources to attain organizational goals.
Managerial process
1. Anticipating potential problems or opportunities and designing plans to deal with them.
2. Coordinating and allocating the resources needed to implement plans
3. Guiding personnel through the implementation process
4. Reviewing results and making any necessary changes.
Using the least amount of resources to accomplish the organization’s goals.
The ability to produce the desired result or good.
Chapter 7: Planning
The process of deciding what needs to be done to achieve organizational objectives; identifying when and how it will be done; and determining by whom it should be done.
Chapter 7: What are the four types of planning?
1. Strategic 2. Tactical 3. Operational 4. Contingency
Strategic Planning
1- 5 years (long range)
Formulated by top management ( CEO, Vice presidents, directors, division heads)
Covers the external environment and entire organization
Purpose is to establish mission and long-term goals
Breadth of content- broad and general
High degree of Uncertainty
An organization’s purpose and reason for existing; it’s long term goals.
Mission statement
A formal document that states an organization’s purpose and reason for existing and describes its basic philosophy.
Tactical Planning
Less than a year.
Middle management’s responsibility
Strategic business units
Purpose: establish midrange goals for implementation
More specific breadth
Moderate degree of certainty
Supervisory management.
Geographical and functional divisions.
Implement and activate specific objectives
Specific and concrete
Reasonable degree of certainty
When an event occurs or a situation demands
Top and middle management
External environment and entire organization
Meet unforeseen challenges and opportunities
Both broad and detailed
Reasonable degree of certainty once event or situation occurs
Contingency plans
Plans that identify alternative courses of action for very unusual or crisis situations; typically stipulate the chain of command, standard operating procedures, and communication channels the organization will use during an emergency.
Chapter 7: Organizing
The process of coordinating and allocating a firm’s resources in order to carry out its plans
Chapter 7: What are the primary functions of managers in organizing activities?
1. Division of labor: dividing up tasks
2. Departmentalization: Grouping jobs and employees.
3. Delegation: Assigning authority and responsibilities
Top management
The highest level of managers; includes CEOs, presidents, and vice presidents, who develop strategic plans and address long-range issues.
Middle management
Managers who design and carry out tactical plans in specific areas of the company.
Supervisory (first-line) management
Managers who designs and carry out operation plans for the ongoing daily activities of the firm.
Chapter 7: Leadership
The process of guiding and motivating others toward the achievement of organizational goals.
Chapter 7: How do leadership styles influence a corporate culture?
The ability to influence others to behave in a particular way
Primary bases of power
Legitimate power: derived from an individual’s position in an organization
Reward: derived from an individual’s control over rewards
Coercive: derived from an individuals ability to threaten negative outcomes
Expert: derived from an individual’s extensive knowledge in one or more areas.
Referent: derived from an individual’s personal charisma and the respect and/or admiration the individual inspires
Leadership styles
The relatively consistent way that individuals in leadership positions attempt to influence the behaviors of others.
Autocratic leaders
Directive leaders who prefers to make decisions and solve problems on their own with little input from subordinates.
Participative leaders
A leadership style in which the leader shares decision making with group members and encourages discussion of issues and alternatives; includes democratic, consensual, and consultative styles.
Democratic leaders
Solicit input from all members of the group and then allow the members to make the final decision through a vote
Consensual leaders
Leaders who confer with subordinates before making a decision, but who retain the final decision- making authority
Free- Rein (laissez faire) leadership
A leadership style in which the leader turns over all authority and control to subordinates
The process of giving employees increased autonomy and discretion to make decisions, as well as control over the resources needed to implement those decision. Participateie and free-rein leaders
Corporative culture
The set of attitudes, calues and standards that distinguishes one organization from another.
Chapter 7: Controlling
Process of assessing the organization’s progress toward accomplishing its goals.
Chapter7: How do organizations control activities?
1. Setting performance standards (goals)
2. Measuring performance
3. Comparing actual performance to established performance standards
4. Taking corrective action (if necessary)
5. Using information gained from the process to set future standards
Chapter 7: What roles do managers take on in different organizational settings?
Three basic categories: informational roles, interpersonal roles, decisional roles
Informational roles
A manager’s activities as an information gatherer, an information disseminator, or a spokesperson for the company.
Interpersonal roles
A manager’s activities as a figurehead, company leader, or liasion
Decisional roles
A manager’s activities as an entrepreneur, resource allocator, conflict resolver or negotiator
Programmed decisions
Decisions made in response to frequently occurring routine situations.
Nonprogrammed decisions
Responses to infrequent, unforeseen, or very unusual problems and opportunities where the manager does not have a precedent to follow in decision making.
Five Step towards Decision Making
1. Recognize or define the problem or opportunity.
2. Gather information as to identify alternative solutions or actions.
3. Select one or more alternatives after evaluating the strengths and weaknesses of each possibility.
4. Put the chosen alternative into action.
5. Gather information to obtain feedback on the effectiveness of the chosen plan.
Chapter 7: What set of managerial skills is necessary for managerial success?
Technical skills, human relations skills, conceptual skills
Chapter 7: What trends will affect management in the future?
Crisis management, managers and information technology, managing multinational cultures
Global management skills
A manager’s ability to operate in diverse cultural environments.
Chapter 8: What are the five traditional forms of departmentalization?
1. Functional departmentalization
2. Product departmentalization
3. Process departmentalization
4. Customer departmentalization
5. Geographic departmentalization
Formal organization
The order and design of relationships within a firm; consists of two or more people working together with a common objective and clarity of purpose.
The process of grouping together jobs so thaat similar or associated tasks and activities can be coordinated
Organizational chart
A visual representation of the structured relationships among tasks and the people given the authority to do those tasks.
Functional departmentalization
Based on the primary functions preformed within an organizational unit
Production departmentalization
Based on goods and services produced or sold by the organizational unit.
Process departmentalization
Based on the production process uned by the organization unti
Customer departmentalization
Based on the primary type of customer served by the organizational unit
Geographic departmentalization
Based on the geographic segmentation of the organizational unit.
Line organization
Direct, clear lines of authority and communication following from the top managers downward
Line and staff organization
An organizational structure that includes both line and staff positions
Line positions
All positions in the organization directly concerned with producing goods and services and that are directly connected from top to bottom
Staff positions
Positions in an organization held by individuals who provide the administrative and support services that line employees need to achieve the firm’s goals.
Chapter 8: What contemporary organizational structures are companies using?
Matrix structure, committee structure
Matrix structure
An organizational structure that combines functional and product departmentalization by bringing together people from different functional area of the organization to work on a special product.
Functional and product departmentalization
Bring a range of solutions and diverse opinions
Have a short life
Advantages teamwork, efficient use of resources, flexibility
Disadvantages: power struggles, confusion among team members, lack of cohesiveness.
Committee Structure
An organizational structure in which authority and responsibility are held by a group rather than an individual.
Chapter 8: what are companies using team-based organizational structures?
Formal and informal groups, group cohesive, work groups vs. work teams
Group cohesive
The degree to which group memebers want to stay in the group and tend to resist outside influences
Work groups
The groups that share resources and coordinate efforts to help members better preform their individual jobs.
Work teams
Like a work group but also requires the pooling of knowledge, skills, abilities, and resources to achieve a common goal.
Problem- solving teams
Usually members of the same department who meet regularly to suggest ways to improve operations and solve specific problems.
Self- managed work teams
Teams without formal supervision that plan, select alternatives, and evaluate their own performance.
Cross functional work teams
Members from the same organizational level but from different functional areas.
Types of teams
Problem solving, self managed, cross functional
Chapter 8: What tools do the companies use to establish relationships within their organizations?
Managerial heirarchy, span of control, degree of centralization
Managerial heirarchy
The levels of management within an organization; typically includes top, middle, and supervisory management.
Most power is at the top of the hierarchy
amount of power decreases as you move down the pyramid.
Clear chain of command
Chain of command
The line of authority that extends from one level of an organization’s hierarchy to the next, from top to bottom, and makes clear who reports to who.
Span of control
The number of employees a manager directly supervises; also called span of management`
Five factors of span of control
1. Nature of the task
2. Location of the workers
3. Ability of the manager to delegate responsibility
4. Amount of interaction and feedback between the workers and the manager
5. Level of skill and motivation of the workers
Chapter 8: How can the degree of centralization/ decentralization be altered to make an organization more successful?
Centralization/ decentralization
The degree to which formal authority is cpncentrated in one area or level of an organization. Top management makes most of the decision.
Tight financial controls
Top managers develop a broad view of operations
Reduces redundancy and therefore reduces costs.
The process of pushing decision-making authority down the organiational hierarchy.
benefits include quicker desicion making, increased levels of innovation and creativity, greater organizational flexibility, faster development of lower-level managers, and increased levels of job satisfaction and employee commitment.
Can be risky.
Desirable decentralization
The organization is very large
The firm is in a dynamic environment where quick, local decisions must be made, as in many high tech industries
managers are willing to share power with their subordinates
Employees are willing and able to take more responsibility
The company is spread out geographically
Chapter 8: How do mechanistic and organic organizations differ?
Mechanistic vs. Organic structures
flat vs. tall
Mechanistic organization
An organizational structure that is characterized by a relatively high degree of job specialization, rigid departmentalization, many layers of management, narrow spans of control, centralized decision making, and a long chain of command.
Tall organizational structure
Organic organization
An organizational structure that is characterized by a relatively low degree of job specialization. loose departmentalization, few levels of management, wide spans of control, decentralized decision making, and a short chain of comment.
Flat organization structure- generally 2 or 3 levels of administration between the faculty and the president.
Chapter 8: How does the informal organization affect the performance of the company?
Informal organization is a network od connections and channels of communication based on the informal relationships of individuals inside an organization.
Provides a source of friendship
Interpersonal relationships help employees feel better informed.
Provide status and recognition
Informal communication channels: rumor mill, grapevine, intelligence network.
What trends are influencing the way business organize?
Reengineering Organizational structures
The virtual corporation
Virual teams
Structure for global mergers.
The complete redign of business structures and processes in order to improve operations
Virtual corporation
A network of independent companies linked by information technology to share skills, costs, and access to one another’s markets; allows the companies to come together quickly to exploit reapidly changing opportunities
Key attributes to a virtual corporation
No borders
Virtual teams
Technology makes it capable
geography not an issues
reduce cost of travel/ relocation
Challenges: keeping team members focused, motivated, and communicating possitively.
Two main reasons: cost reduction and labor needs. To be successful in outsourcing efforts, managers must do the following:
identify a specific business problem
consider all possible solutions
decide whether sending worl offshore is the appropriate answer to the problem
look for offshore providers that have high caliber systems in place that will push clients to optimize their own internal processes
find an offshore provider that understands their business.
Chapter 9: What is the human resource management process, and how are human resource needs determined?
Human resource management
The process of hiring, developing, motivating and evaluating employees to achieve organizational goals.
HR management proces
Job analysis and desing
Human resource planning and forecasting
Employee recruitment
Employee selection
Training and development
Performance planning and evaluation
Compensation and benefits
Human resource planning
Creating a strategy for meeting current and future human resource needs.
job analysis
A study of the tasks required to do a particular job well
Job despription
The tasks and responsibilites of a job
Job specification
A list of skills, knowledge, and abilities a person must have to fill a job.
Succession planning
Examination of current employees to identify people who can fill vacancies and be promoted
Contingent work
Person who prefers temporary employments, either part time or full time.
Chapter 9: How do firms recruit applicants?
Employee recruitment: internal labor market, external labor market, electronic job boards, recruitment banding, job fairs
The attempt to find and attract qualified applicants in the internal labor market
Job fair
An event, typically one day, held at a convention center to bring together job seekers and firms searching for employees
Recruitment branding
Presenting an accurate and positive image of the firm to those recruited
Chapter 9: How do firms select qualified applicants?
1. Initial Screening
2. Employment testing
3. Selection interview
4. Background and reference check
5. Physical exams and drug testing
6. Decision to hire
The process of determination which persons in the applicant pool possess the qualifications necessary to be successful on the job.
Selection interview
An in-depth discussion of an applicant’s work experience, skills and abilities, education, and career interests.
Chapter 9: What types of training and development do organizations offer their employees?
On- the- job training: orientation, job rotation, apprenticeship, mentoring
Off-the-job training: programmed instruction, simulation
Presentation to get a new employee ready to preform his or her job
Job rotation
Reassignment of worker to several different jobs overtime so that they can learn the basics of each job
A form of on-the-job training that combines specific job instruction with classroom instruction
A form of on-the-job training in which a senior manager or other experienced employee provides job and career related information to a mentee.
Programmed Instruction
A form of computer-assisted off-the-job training.
A scaled down version or mock-up of equipment, process, or work environment
Chapter 9: How are performance appraisals used to evaluate employee performance?
1. manger establishes performance standards
2. Employee works to meet the standards and expectations
3. Employee’s supervisor evaluates the employee’s work in terms of quality and quantity of output and various characteristics such as job knowledge, initiative, relationships with other, and attendance and punctuality.
4. Following the performance evaluation, reward )pay raise) and job change (promotion) decisions are made.
5. Rewards are positive feedback and provide reinforcement, or encouragement, for the employee to work harder in the future.
Chapter 9: What are the types of compensation and methods for paying workers?
incentive pay, unemployment compensation, worker’s compensation
Factors that affect employee’s pay
1. Pay structure and internal influences: Wages reflect importance of the job, top management has higher salary
2. Pay level and external influences: Competitors pay wages, surveys by Chamber of Commerce and U.S. Department of Labor
Incentive pay
Additional pay for attaining a certain goal
Unemployment compensation
Government payment to unemployed former workers
Worker’s compensation
Pay for lost work time due to employment-related injuries.
Chapter 9: What is a labor union and how is it organized?
Local unions, shop steward, federation
Labor Union
An organization that represents workers in dealing with management
Collective bargaining
Negotiating a labor agreement
Local union
Branch of a national union that represents workers in a specific plant or geographic area.
Shop steward
An elected union official that represents union members to management when works have complaints
A collection of unions banded together to achieve common goals
Chapter 9: What is collective bargaining and what are some of the key negotiation issues?
Union security, management rights, wage and benefits, job security and seniority
Union shop
Nonunion workers can be hired but must join the union later
Agency shop
Workers don’t have to join the union but must pay dues
Right-to-work law
State laws that an employee does not have to join a union
Open shop
Workers do not have to join the union or pay union dues
Management rights clause
Clause in a labor agreement that gives management the right to manage the business expect as specified in the contract
Chapter 9: How are grievances between management and labor resolved, and what tactics are used to force a contract settlement?
Selective strike strategy
A formal complaint by a union worker that management has violated the contract
Settling labor-management disputes through a third party. The decision is final and binding
Selective strike strategy
Strike at a critical plant that typically stops operations system wide.
Union strategies: strike, boycott, picketing, corporate campaign
Employer strategies: lockout, strike replacement, mutual-aid pact, shift production
Chapter 9; What are the key laws and federal agencies affecting human resources management and labor relations?
Occupational Safety and Health Administration: Sets workplace safety and health standards and assures compliance
Equal Employment Opportunity Commission: Processes discrimination complaints, issues regulations regarding discrimination, and disseminates information
Affirmative action program
Programs established by organizations to expand job opportunities for women and minorities.
Protected classes
The specific groups who have legal protection against employment discrimination; include women, African Americans, Native Americans, and others
Specialists in labor-management negotiation that acts as a go-between for management and the unions and helps focus on the problems
Specialists that facilitates labor-management contrast discussions and suggest compromises
Chapter 9: What trends and issues are affecting human resource management and labor relations?
Employee diversity and competitive advantage, Outsourcing HR an technology, organizational culture and hiring for fit, more service workers joining labor unions
Competitive advantage
A set of unique features of an organization that are perceived by customers and potential customers as significant and superior to the competition.

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