Management 301 Exam 3 Review
Management and Organizations
What is an organization, what do managers do?
• An organization is a consciously coordinated social unit consisting of: (1) a group of people, (2) working together,
(3) in a division of labour, (4) for a common purpose
• Managers are responsible for the work performance of others and are task oriented, achievement oriented, and
• Management is defined as (1) the pursuit of organizational goals efficiently and effectively by (2) integrating the
work of people through (3) planning, organizing, leading, and controlling the organization’s resources.
What challenges do managers face?
• Challenge 1: Managing for CompetitiveAdvantage – Staying Ahead of Rivals
o Being responsive to customers, Innovation, Quality, and Efficiency
• Challenge 2: Managing for Diversity – The Future Won’t Resemble the Past
• Challenge 3: Managing for Globalization – The Expanding Management Universe
• Challenge 4: Managing for Information Technology
• Challenge 5: Managing for Ethical Standards
• Challenge 6: Managing for Sustainability – The Business of Green
• Challenge 7: Managing for Your Own Happiness & Life Goals
What are the four managerial tasks of POLC?
• Planning: setting goals and deciding how to achieve them – coping with uncertainty by formulating future courses
of action to achieve specified results
• Organizing: arranging tasks, people, and other resources to accomplish the work
• Leading: motivating, directing, and otherwise influencing people to work hard to achieve the organization’s goals
• Controlling: monitoring performance, comparing it with goals, and taking corrective action as needed.
o Step 1: Set Standards
o Step 2: Measure Performance
o Step 3: CompareActual to Standards
o Step 4: Take CorrectiveAction
What are the three levels of management?
• Top Managers: make long-term decisions about the overall direction of the organization and establish the
objectives, policies, and strategies for it
o Tend to have titles such as “chief executive officer (CEO”, “chief operating officer (COO),” “president,”
and “senior vice president”
• Middle Managers: implement the policies and plans of the top managers above them and supervise and coordinate
the activities of the first-line managers below them
o Titles may be “division head,” “plant manager,” or “branch sales manager”
• First-Line Managers: make short-term operating decisions, directing the daily tasks of non-managerial personnel
o Titles may be “department head,” “foreman,” “team leader,” or “supervisor”
What are Mintzberg’s 3 managerial roles?
• Interpersonal Roles: managers interact with people inside and outside their work units
o Roles include being a figurehead (ceremonial activities), being a leader (influencing or directing others),
and being a liaison (contacting others outside the formal chain of command)
• Informational Roles: managers receive and communicate information with other people inside and outside the
organization o Roles include being a monitor (seeking information to be aware of crucial developments), being a
disseminator (receives and send information), and being a spokesperson (represents the views of the unit
for which he or she is responsible)
• Decisional Roles: managers use information to make decisions to solve problems or take advantage of
o Roles include being en entrepreneur (explore new opportunities), being a disturbance handler (act as a
judge or problem solver in conflicts), being a resource allocator (decide how resources will be
distributed), and being a negotiator (make accommodations with other units)
What are the skills needed by a manager?
• Technical Skills: job-specific knowledge needed to perform well in a specialized field
• Conceptual Skills: ability to think analytically, logically, and with good judgment to visualize an organization as a
whole and understand how the parts work together
• Human Skills: ability to work well in cooperation with other people to get things done – sensitivity,
persuasiveness, and empathy
Ethics & Corporate Social Responsibility
What are the different ways of resolving ethical dilemmas?
• Utilitarian: what will result in the greatest good for the greatest number of people (if the costs exceeds the benefits,
then you don’t do it)
• Individual: what will result in the individual’s best long term interest, that are in everyone’s self-interest
• Moral-Rights: respect for the fundamental rights of human beings
• Justice: respect for impartial standards of fairness
What is the difference between morality and ethics?
• Morality: an organized set of values about what is right and/or wrong, good and/or bad
• Ethics: norms that guide moral choices in our behaviour and/or our relationships with others
What is the classical view of CSR – Milton Friedman?
• The only social responsibility for a corporation is to maximize profits for the shareholder (within the limits of the
What is the socio-economic view of CSR– Freeman/Samuelson?
• Profit maximization is the second priority of business – the first is to insure its survival (Freeman)
• Businesses may not only may engage in social responsibility, they had damned well better try to do so
What are Kohlberg’s levels of moral development?
• People progressed in their moral reasoning (i.e., in their bases for ethical behaviour) through a series of stages
• The stages include growth from self-centeredness to other-centeredness
• The capacity to reason also grows from reliance on external authority – to fidelity – to internalized values
• Level 1: Pre-conventional Morality
o Stage 1: Obedience and Punishment
Obeying the rules is important because it is a means to avoid punishment
o Stage 2: Individualism and Exchange
Account for individual points of view and judge actions based on how they serve the individual
• Level 2: Conventional Morality
o Stage 3: Interpersonal Relationships Focused on living up to social expectations and roles
o Stage 4: Maintaining Social Order
Focus on maintaining law and order by following the rules, doing one’s duty, and respecting
• Level 3: Post-conventional Morality
o Stage 5: Social Contact and Individual Rights
Begin to account for the differing values, opinions, and beliefs of other people
o Stage 6: Universal Principles
Follow internalized principles of justice, even if they conflict with laws and rules
What are the diversity issues/ barriers to diversity?
• Diversity represents all the ways people are unlike and alike in terms of:
o Age, gender (glass ceiling), race/ ethnicity, religion, sexual orientation, ability, and socio-economic
• Barriers to diversity include:
o Stereotypes and prejudices, ethnocentrism
o Fear of reverse discrimination
o Resistance to diversity program priorities
o Unsupportive social atmospheres
o Lack of support for family demands
o Lack of support for career-building steps
What are the moral principles for managers?
• Dignity of Human Life: The lives of people are to be respected. Human beings, by the fact of their existence, have
value and dignity. We may not act in ways that directly intend to harm or kill an innocent person. Human beings
have a right to live; we have an obligation to respect that right to life. Human life is to be preserved and treated as
• Autonomy: All persons are intrinsically valuable and have the right to self-determination. We should act in ways
that demonstrate each person’s worth, dignity, and right to free choice. We have a right to act in ways that assert
our own worth and legitimate needs. We should not use others as mere “things” or only as means to an end. Each
person has an equal right to basic human liberty, compatible with a similar liberty for others.
• Honesty: The truth should be told to those who have a right to know it. Honesty is also known as integrity, truth
telling, and honor. One should speak and act so as to reflect the reality of the situation. Speaking and acting should
mirror the way things really are. There are times when others have the right to hear the truth from us; there are
times when they do not.
• Loyalty: Promises, contracts, and commitments should be honored. Loyalty includes fidelity, promise keeping,
keeping the public trust, good citizenship, excellence in quality of work, reliability, commitment, and honoring just
laws and policies.
• Fairness: People should be treated justly. One has the right to be treated fairly, impartially, and equitably. One has
the obligation to treat others fairly and justly. All have the right to the necessities of life—especially those in deep
need and the helpless. Justice includes equal, impartial, unbiased treatment. Fairness tolerates diversity and accepts
differences in people and their ideas.
• Humaneness: There are two parts: (1) Our actions ought to accomplish good, and (2) we should avoid doing evil.
We should do good to others and to ourselves. We should have concern for the well-being of others; usually, we
show this concern in the form of compassion, giving, kindness, serving, and caring.
• The Common Good: Actions should accomplish the “greatest good for the greatest number” of people. One should
act and speak in ways that benefit the welfare of the largest number of people, while trying to protect the rights of
What is the general of macro-environment – SEPTED Model? • The macro environment consists of external and uncontrollable factors that influence an organization's decision
making, and affect its performance and strategies. These are the factors can be collectively grouped under the
• SOCIO-CULTURAL FACTORS. These involve the socially accepted norms and belief systems of the people in
the region or country in which the organization conducts its business. Culture is defined as the ‘collective
programming of a people’s minds. An understanding of these cultural norms and mores is crucial for the firm to
have in order to enhance the effectiveness of its strategies and hence its competitive advantage. Changes in social
trends and fashions can impact on the demand for a firm's products and the availability and willingness of
individuals to work.
• ECONOMIC FACTORS. These include interest rates, taxation changes, economic growth, inflation and
exchange rates. Economic change can have a major impact on a firm's behavior. For example, (1) higher interest
rates may deter investment because it costs more to borrow; (2) a strong currency may make exporting more
difficult because it may raise the price in terms of foreign currency, (3) inflation may provoke higher wage
demands from employees and raise costs, and (4) higher national income growth may boost demand for a firm's
• POLITICAL/LEGAL FACTORS. These refer to government policy such as the degree of intervention in the
economy. What goods and services does a government want to provide? To what extent does it believe in
subsidizing firms? What are its priorities in terms of business support? Legal factors are related to the legal
environment in which firms operate. Examples include the introduction of age discrimination laws, disability
discrimination laws, minimum wage laws, and greater requirements for recycling. Legal changes can affect a
firm's costs (e.g. if new systems and procedures have to be developed) and demand (e.g. if the law affects the
likelihood of customers buying the good or using the service).
• TECHNOLOGICAL FACTORS: new technologies create new products and new processes. MP3 players,
computer games, online gambling and high definition TVs are all new markets created by technological advances.
Online shopping, bar coding and computer aided design are all improvements to the way we do business as a result
of better technology. Technology can reduce costs, improve quality and lead to innovation. These developments
can benefit consumers as well as the organizations providing the products.
• ECOLOGICAL FACTORS: environmental factors include the weather and climate change. Changes in
temperature can impact on many industries including farming, tourism and insurance. With major climate changes
occurring due to global warming and with greater environmental awareness this external factor is becoming a
significant issue for firms to consider. The growing desire to protect the environment is having an impact on many
industries such as the travel and transportation industries (for example, more taxes being placed on air travel and
the success of hybrid cars) and the general move towards more environmentally friendly products and processes is
affecting demand patterns and creating business opportunities.
• DEMOGRAPHIC FACTORS: In the US, for example, with the Baby Boomers reaching retirement age, the
population is ageing. This has increased the costs for firms who are committed to pension payments for their
employees because their staff is living longer. It also means some firms have started to recruit older employees to
tap into this growing labor pool. The ageing population also has impact on demand: for example, demand for
sheltered accommodation and medicines has increased whereas demand for toys is falling.
What is the industry level environment – Porter’s 5-Forces?
• Porter’s model for industry analysis that business-level strategies originates in five primary competitive forces in
the firm’s environment
• Threats of New Entrants: new competitors can affect an industry almost overnight, taking away customers from
o Time and cost of entry, knowledge, economies of scale, cost advantage, technology barriers
• Bargaining Power of Suppliers: some companies are readily able to switch suppliers in order to get components or
services, but others are not
o Number of suppliers, size of suppliers, switching costs, unique service/ product, ability to substitute
• Bargaining Power of Buyers: customers who buy a lot of products or services from an organization have more
bargaining power than those who don’t
o Number of customers, buying volumes, differentiation, price elasticity, incentives, brand loyalty,
switching costs • Threats of Substitute Products of Services: an organization is in a better position to switch to other products or
services when circumstances threaten their usual channels
o Substitute performance, switching costs, buyer willingness
• RivalryAmong Competitors: the preceding four forces influence this force
o Number of competitors, price competition, advertising battles, product introductions, diversity of
How do you plan for uncertainty – SMART goals?
• Specific: goals should be stated in specific rather than vague terms
• Measurable: there should be some way to measure the degree to which a goal has been reached
• Attainable: goals should be challenging but they should be realistic and attainable – they should be achievable
within the scope of the time, equipment, and financial support available
• Results-Oriented: goals should support the organization’s vision
• Target Dates: goals should specify the target date or deadline dates when they are to be attained
What are Miles & Snow’s strategic types?
• Scholars Raymond E. Miles and Charles C. Snow suggest that organizations adopt one of four approaches when
responding to uncertainty in their environment
• Defenders: expert at producing and selling narrowly defined products or services
o Limit product line; focus on efficiency improvement
• Prospectors: focus on developing new products or services and in seeking out new markets, rather than waiting for
things to happen
o Broad product lines; focus on product innovation; market opportunities
• Analyzers: let other organizations take the risks of product development and marketing and then imitate (or
perhaps slightly improve on) what seems to work best
o Operate in at least two different markets; combine prospector and defender strategies
• Reactors: make adjustments only when finally forced to by environmental pressures
o Lack consistent strategic orientation, piecemeal reaction after the fact
What are the strategy and strategic management model?
• Mandate Vision Mission Strategic Goals & Objectives SWOT/ SEPTED Strategic Choice (enterprise
corporate business functional) Implementation (programs, budgets, change management, 7-S framework)
Evaluation & Control Feedback Restart Cycle
• Strategy: large-scale action plan that sets the direction for an organization
o The determination of long-term goals/ objectives of an enterprise, the adoption of courses of action, and
the allocation of resources for the accomplishment of the objectives
o Creating a fit between the firm’s internal Strengths and Weaknesses; and Opportunities and Threats in the
• Strategic Management: process that involves managers from all parts of the organization in the formulation and
the implementation of strategies and strategic goals
o Set of analytical processes that lead to managerial decisions and actions a firm undertakes in order to
create and sustain its competitive advantage
o Key attributes of Strategic Management:
Direction setting overall goals & objectives
Multiple stakeholders in decision making
Short-term & long-term perspectives
Trade-offs between efficiency and effectiveness • Strategic Planning: determines not only the organization’s long-term goals for the next 1-5 years regarding growth
and profits but also the ways the organization should achieve them
o An organization should adopt strategic management and strategic planning for three reasons: they can (1)
provide direction and momentum, (2) encourage new ideas, and (3) develop a sustainable competitive
What is McKinsey’s 7-S Framework?
• Hard S’s: Systems, Strategy, Structure, (Shared Values?)
• Soft S’s: Staff, Style, Skills, (Shared Values?)
What is D’Aveni’s New 7-S Framework?
• Vision: Identifying and creating opportunities for temporary advantage through understanding Stakeholder
Satisfaction and Strategic Soothsaying directed at identifying new ways to serve customers better
• Capabilities: Sustaining the momentum by developing flexible capacities for Speed and Surprise that can be
applied across actions to build a series of temporary advantages
• Tactics: Seizing the initiative to gain advantage by Shifting the Rules, Signaling, and Simultaneous and Sequential
Strategic Thrusts with actions that shape, mold, or influence the direction or nature of the competitors’response
What is Management by Objectives (MBO)?
• MBO: Four-step process in which (1) managers and employees jointly set objectives for the employee, (2)
managers develop action plans, (3) managers and employees periodically review the employee’s performance, and
(4) the manager makes a performance appraisal and rewards the employee according to the results
• MBFA: Managing by FoolingAround
What are the three types of planning?
• Strategic Planning: determine what the organization’s long-term goals should be for the next 1-5 years with the
resources they expect to have available
o Top Management
• Tactical Planning: determine what contributions their departments can make during the next 6-24 months
o Middle Management
• Operational Planning: how to accomplish specific tasks within the next 1-52 weeks
o First-Line Management
What is project planning?
• Project Planning: achieving a set of goals through planning, scheduling, and maintaining progress of the activities
that comprise the project
• The Planning/ Control Cycle: consists of two planning steps (1 and 2) and two controlling steps (3 and 4), as
follows: (1) make the plan, (2) carry out the plan, (3) control the direction by comparing results with the plan, and
(4) control the direction by taking corrective action in two ways – namely, (a) by correcting deviations in the plan
being carried out, or (b) by improving future plans
What are the different strategy levels?
o “What is the role of the organization in society?”
• Corporate (aka domain definition)
o “What business are we in or should be in?”
o “How do we coordinate our different SBUs?” Strategic Business Unit
• Business (aka domain navigation)
o “How should we compete in a given business of industry?”
• Functional o “How should we integrate sub-functional activities and relate them to the functional areas, e.g., finance,
What are the types of corporate strategies and di