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The relationship between goals and plans, and the definition and purpose of each
- Goal: desired future state
- Plan: what we need to do to achieve that state
- -Tasks (what)
- -Resource allocations (who)
- -Schedules (when and where)
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The different levels of goals and plans (hint: this is REALLY important)
- Mission Statement
- =Wal-mart’s mission: Help
- people save money so they can live better.
- Strategic Goals/Plans -Senior Management (org as a whole)
- =Make our prices lower than Target’s for each of our 100 most popular products.
- = Develop new ways for shoppers to benefit from our low prices.
- Tactical Goals/Plans- Large divisions / departments
- =Reduce cost by >5% on each product.
- =Open low-cost pharmacies in 300 stores this year.
- Operation Goals/Plans-Departments, work groups,individuals
- =Re-negotiate shampoo prices this quarter.
- =Select the best pharmacy layout by end of month
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Criteria for effective goals – “Goals should be…” slide (hint: this is REALLY important)
- -Specific and measurable
- -Covering key result areas
- -Challenging but realistic (stretch goals)
- -Of a defined time period
- -Linked to rewards
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Approaches to planning: MBO
- Management by Objective
- 1. Set goals at all levels
- 2. Develop action plans
- 3a. Review progress
- 3b. Take corrective action as needed (go back to step 2)
- 4. Appraise performance
- REPEAT
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the advantages/disadvantages: MBO
- Pros:
- -Managers and employees focus on activities that lead to goal attainment
- -Performance can be improved at all levels of company
- -Employees are motivated
- Cons:
- -Constant change can prevent MBO from taking hold
- -Poor employee-employer relations can kill MBO
- -Employees focus on operational instead of strategic goals
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Approaches to planning: single-use plans
- Single-Use: Programs and Projects
- -Examples: going paperless, building a new headquarters
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Approaches to planning: Standing plans
- Standing: Policies, Rules, and Procedures
- -Examples: email policies, procedures for handling customer refunds
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Contingency planning: the approach of each
- “In case of” plans
- Identify negative potential factors, then build responses to the worst case
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scenario building: the approach of each
Imagine what could be
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crisis management: the approach of each
- Prevent: build relationships, detect signals from environment
- Prepare: designate CM team and spokesperson, create detailed CM plan, set up communications system
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The evolution of planning (discussed in class slide)
- Then:
- -Central Planning Depts
- -Planning Specialists
- -Report directly to CEO
- -Goals / plans then assigned downward
- Now:
- -Decentralized Planning
- -More people involved
- -Evolutionary
- -Top management still signs off and is accountable for results
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Why build a strategy? 3 main reasons.
- Develop and exploit core competence
- Build product synergy across organization
- Deliver value
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3 levels of strategy, and the main question that each strives to answer (discussed in class slide)
- Corporate -What business are we in?
- Business-level -How do we compete at the product level?
- Functional -How do we support the business-level strategy, department by department?
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The strategic management process
evaluate current mission,goals, and strategies =>scan external envir, scan internal envir => swot => develop new mission, goals, and strategies => formulate/implement strategy
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Corporate-level strategy: understand the portfolio strategy (hint: this is REALLY important)
mix of SBU’s and product lines that fit together to create a competitive advantage
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the BCG matrix (hint: this is REALLY important)
- business growth rate by market share
- question marks, stars, dogs, cash cows
- Question Marks: New Ventures, risky- a few become stars, others are divested
- Stars: Rapid growth and expansion
- Dogs: No investment, keep if some profit. Consider divestment
- Cash cows: Milk to finance question marks and stars
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diversification strategies (hint: this is REALLY important)
- Moving into new lines of business
- Related diversification – Apple and the iPhone
- Unrelated diversification – rare these days
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Business-level strategy: Porter’s five competitive forces(hint: this is REALLY important)
potential new entrants, threat of substitute products, bargaining power of buyers, bargaining power of suppliers = rivalry among competitors
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Business-level strategy: Porter’s three competitive strategies (hint: this is REALLY important)
- Differentiation- strategy involves an attempt to distinguish the firm's products/services from others in the industry
- Cost Leadership- strategy, the org agressively seeks efficient facilities, pursue cost reductions, and uses tight cost controls by produce products more efficiently than competitors
- Focus- strategy, the org concentrates on a specific regional market or buyer group
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Programmed vs. nonprogrammed decisions
- Programmed decisions: involve situations that have occurred often enough to enable decision rulees to be developed and applied in the future
- Nonprogrammed decisions: made in response to situations that are unique, are poorly defined and largely unstructured, and have important consequences for the organization
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What makes decision-making difficult? Four types of difficult decisions (see class slide) and the differences between them (hint: this is REALLY important)
- Certainty: all information the decision maker needs is fully available
- Risk: a decision has clear-cut goals and that good information is available but the future outcomes associated with each alternative are subject to change
- Uncertainty: managers know which goals they wish to achieve, but information about alternatives and future events is incomplete
- Ambiguity: goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable
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Decision-making models: classical. Understand the assumptions behind and differences between each.
- The ideal, rational model
- Assumption: managers should and will make rational decisions based on the org’s best economic interests.
- Relies on certainty, agreed-upon goals, and clear criteria for evaluating alternatives.
- Good in theory, but…
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Decision-making models: administrative. Understand the assumptions behind and differences between each. Also understand the 3 techniques suggested by the administrative model.
- How managers make decisions in situations with uncertainty / ambiguity
- Bounded rationality
- Satisficing
- Intuition
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Decision-making models: political. Understand the assumptions behind and differences between each.
- Assumptions:
- -Managers are a diverse group and disagree about problem priorities
- -Ambiguous or incomplete
- information
- -Managers don’t have the time or cognitive capacity to identify and process all relevant info
- -Managers engage in push and pull of debate to decide goals and discuss alternatives
- Often results in a coalition
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4 different personal decision styles (hint: this is REALLY important)
- Analytical -Gather as much data as possible, use it to make a rational decision.
- Behavioral -Talk to people 1-on-1, get their feelings on the problem / solutions.
- Conceptual -Gather broad info, analyze it, then also talk to others about problem and possible alternatives.
- Directive -Consider just 1-2 alternatives, make decisions quickly
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Why do managers make bad decisions?
- Being overly influenced by initial impressions
- Justifying past decisions
- Seeing what you want to see
- Perpetuating the status quo
- Being influenced by “problem framing”
- Overconfidence
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Methods for innovative decision-making
- Brainstorming
- -Group spontaneously suggests a long list of alternatives
- -Pro: quickly generate many ideas
- -Con: groupthink
- Rigorous debate
- -Devil’s advocate
- -Point-counterpoint groups
- Demand evidence
- Practice the 5 “why’s”
- Know when to bail
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Org structure and org charts: the definition of each and the differences between them
- Framework in which the org defines:
- -How tasks are divided
- -How resources are deployed
- -How departments are coordinated
- Org chart = a visual representation of org structure
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The key things an org chart tells us about an organization
- Work specialization: aka division of labor, the degree to which organizational tasks are subdivided into separate jobs
- Chain of command: unbroken line of authority that links all persons in an org and shows who reports to whom
- -Authority, -Responsibility, -Accountability, -Delegation
- Span of management: number of employees reporting to a supervisor
- Centralization vs. Decentralization
- Centralization: decision authority is located at the top of the org
- Decantralization: decision authority is pushed downward to lower org lvls
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The 5 approaches to org structures. Be able to tell the approach being used by looking at an org chart, and at least 1 benefit / downside for each (hint: this is REALLY important)
- Vertical Functional stucture
- Divisional stucture
- Matrix stucture
- Team-Based stucture
- Virtual Network stucture
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Virtual Network stucture (hint: this is REALLY important)
- Org structure that firm subcontracts most of its major functions to separate companies and coordinates their activities from a small headquarters org
- Contain central hub surrounded by a network of outside specialists
- Outsourced
- Company can concentrate on what it does best and contract out other activities to other companies which enable a company to do more with less
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Virtual Network stucture at least 1 benefit / downside for each (hint: this is REALLY important)
- Advantages: can draw on expertise worldwide, highly flexible and responsive, reduced overhead costs
- Disadvantages: lack of control; weak boundaries, greater demands of managers, employee loyalty weakened
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Vertical Functional stucture (hint: this is REALLY important)
- Org structure that is the grouping of positions into depts based on similar skills, expertise, work, activities,and resource use
- Each depts is concerned with the org as a whole
- A strong vertical design
- Info flows up and down the vertical hierarchy
- chain of command converges at the top of org
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Vertical Functional stucture at least 1 benefit / downside for each (hint: this is REALLY important)
- Benefit: efficient use of resources; economies of scale, in-depth skill specialization and dev, top manager direction and control
- Downside: poor communication across functional depts, slow response to external changes; lagging innovation, decisions concentrated at top of hierarchy, creating delay
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Divisional stucture at least 1 benefit / downside for each (hint: this is REALLY important)
- Benefit: Fast response, flexibility in unstable envir, fosters concern for customer needs, excellent coordination across functional depts
- Downside: Duplication of resources across divisions, less technical depth and specialization, poor coordination across divisions
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Divisional stucture (hint: this is REALLY important)
- Org structure that occurs when depts are group together based on simular organizational outputs
- Divisions are created as self-contained units with separate functional depts for each division
- Chain of command converges lower in the hierarchy
- Decentralization
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Matrix stucture at least 1 benefit / downside for each (hint: this is REALLY important)
- Benefit: More efficient use of resources than single hierarchy, flexibilit, adaptability to changing envir, interdisciplinary cooperation, expertise available to all divisions
- Cons: Frustration and confusion from dual chain of command, high conflict between two sides of the matrix, many meetings, more discussion than action
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Matrix stucture (hint: this is REALLY important)
- Org stucture that combines aspects of both functional and divisional structures simultaneously in the same part of the org
- Dual lines of authority
- Two supervisiors simultaneously
- Top leader
- Two-boss employees
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Team stucture at least 1 benefit / downside for each (hint: this is REALLY important)
- Pros: Reduced barriers among depts, increased compromise, shorter response time, quicker decisions, better morale, enthusiasm from employee involvement
- Cons: Dual loyalties and conflict, time and resources spent on meetings, unplanned decentralization
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Team stucture (hint: this is REALLY important)
- Org structure that give managers a way to delegate authority, push responsibility to lower lvls, and be more flexible and responsive in the competitive global envir
- three types: cross-functional teams, permanent teams, team-based structure
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The key to making any structure work, and why it’s so important
- Coordination
- Otherwise…
- -“It’s not my problem”
- -“I didn’t know about that”
- -“Has anyone else thought about this problem?”
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The role of task forces and project managers
- Task forces -Across multiple departments, -Solve a short-term problem
- Project Managers
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The sequence of events that trigger change (see class slide)
envir factors, internal forces => need for change => initate change => implement change
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Characteristics of creative people and orgs
- conceptual fluency and open-mindedness -open channels of communication, internally and externally
- originality -embracing non-specialists and ecentrics
- independence -decentralization
- curiosity- freedom to choose+ pursue problems
- persistence -dedicating resources to long-term projects
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Methods for initiating entrepreneurial change (see class slide) – know the 4 key roles, as well as the function of new venture teams, venture funds, and skunkworks
- 4 key roles: -Idea champions, -Inventors, -Sponsors, -Critics
- Other ways to foster entrepreneurship
- -New venture teams
- -Skunkworks (XEROX PARC)
- -New venture funds (X Prizes)
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Difference between people changes, culture changes and structure changes
- People change: concerns just a few employees
- Culture change: pertains to the org as a whole
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Force-field analysis: what are the two types of forces, and what role does each play? (hint: this is REALLY important)
- Driving forces vs. restraining forces
- driving forces: probs or opportunities that provide motivation for change within org
- restraining forces: the various barriers to change
- Example: McDonalds adding upscale coffee drinks
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Overcoming resistance to implementing changes. Understand what technique to use in which change scenario.
- education: use when users need accurate info to understand a technical change
- participation: use when users have power to resist
- negotiation: use when group has power over implementation, and will lose something in the process
- coercion: use when in crisis mode
- top mgmt support: use when change involves multiple depts
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The 3 functions of HR management
- Find the right people
- Maintain an effective workforce
- Manage talent
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What’s changing in HR – external factors (see class slides)
- Federal legislation
- -EEOC and affirmative action
- -Compensation / benefits laws
- -Health / safety laws (COBRA /OSHA)
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What’s changing in HR – internal factors (see class slides)
- The changing social contract
- -Then: job security, knowing is key, routine jobs
- -Now: employability / personal responsibility, learning is key, challenging and unique assignments
- Becoming an employer of choice
- -Trust-based work culture
- Contingent workers, incl temporary employees
- Work-life balance
- -Virtual teams / telecommuting
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The 4 overall steps to attracting the right workforce, and how to match companies and employees effectively
- steps to attracting the right workforce
- HR planning: forecast based on: new technologies, business growth, turnover rate
- Choose recruiting sources: internet, headhunters, word of mouth
- Select candidates: application, interviews, tests
- Welcome new employee
- Company needs: Company inducements = Employee contributions: employee needs
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Methods for developing the right workforce (see class slide). Understand halo effect and stereotyping.
- Training and Development
- -On-the-Job Training
- -Corp Universities
- -Promotion from Within
- -Mentoring and coaching
- Performance Appraisal
- -Accurate assessment – reduce:
- -Stereotyping
- -Halo effect (same rating on all dimensions)
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Maintaining the right workforce – the role(s) of HR in compensation and termination
- Compensation
- -Money
- -Ensure compensation equity, often through job-based pay
- -Newer trends: skills-based pay, pay for performance
- -Benefits
- -Make up 40% of labor costs
- -HR must manage health care costs while meeting employee needs
- Termination
- -Sometimes to remove poor performers or to “rightsize”
- -For voluntary exiters, exit interview is key
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Primary and secondary dimensions of diversity: be able to explain the difference between the two dimensions, and give 2-3 examples of each.
- Primary dimensions of diversity: -Age, -Gender, -Physical ability, -Race, -Sexual orientation, -Ethnicity
- Secondary dimensiosn of diversity: -Education, -Marital status, -Parental status, -Work background, -Income, -Geographic location, -Military experience, -Religious beliefs
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Why should managers value diversity? (see class slide) (hint: this is REALLY important)
- Broader range of viewpoints
- Reflect their changing customers -Minority purchasing power
- Obtain the best talent -Growth in skilled minority and female workers, -Aging workforce
- Do the right thing
- * Work is the most diverse setting in most people’s lives.*
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Factors shaping personal bias
- Prejudice -Different = deficient
- Discrimination -Acting on prejudices
- Stereotypes -Rigid, irrational beliefs about a group of people, -Different than legitimately valuing cultural differences
- Ethnocentrism -“My group / subculture is superior to yours”
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Factors affecting women: glass ceiling: define and explain each.
- More about informal barriers than formal barriers
- Result: fewer top management positions, lower average pay
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Factors affecting women: opt-out trends: define and explain each.
- Two schools of thought
- -women decidng corporate success isn't worth the price in terms of reduced family and personal time, greater stress, and negative health effects
- -women don't want corporate power and status in the same way that men do, and clawing one's way up the corporate ladder has become less appealing
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Factors affecting women: “the female advantage”: define and explain each.
- Do women possess better managerial qualities?
- Relationship-oriented, collaborative, less hierarchical
- Also rated higher by peers on goal accomplishment
- Appears 50/50 works best
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Communication differences among cultures – understand the difference between high- and low-context cultures
- High-context cultures: context matters -Asian and Arab countries
- Low-context cultures: meaning comes from the words themselves -North American and European
- countries
- Also varies by gender and ethnicity within the US
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