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exam 1 terms
Sauley's notes
Undergraduate 3

Additional Management Flashcards




. What is management
` The process of achieving desired results through the efficient use of human and
material resources
What are the 2 key concerns of management?
Effectiveness and Efficiency
**3. What is effectiveness concerned with? efficiency?
Effectiveness is concerned with doing the right thing in the right time, in the
right way; goal attainment, market share increasing (ENDS)
` Efficiency is concerned with reducing waste or minimizing resource costs since
many resources are scarce. “Getting more bang for the buck.” (MEANS)
-inc productivity while keeping the same resource cost
-same productivity- lower cost
-max efficient- cost down, productivity inc
How are effectiveness and efficiency related?
` More concerned with efficiency, the harder it is to be effective (i.e. when you try
too hard to cut costs, you can loose sight of your goals)
` Effective companies tend to be efficient*
`Become more concerned with efficiency, effectiveness is going to be more difficult to achieve
. What is your important resource as manager?
` Human resources [people] (Injellitance - incompetence + jealousy…disease that
threatens selection)
. Is management art or science? When is it considered a science? an art?
` Both
` It is a science because we develop theories of managing and then test them using the scientific method with empirical evidence (Management Academically)
` It is an art because it’s an extension of people’s personalities; it cannot all be taught and there are many different management styles that can be successful (Management in practice)
`equifinality- many roads to success *
**7. How did management become important and why is it still significant today?
` Industrial Revolution changed how work was performed; dividing up labor (unskilled labor) causes a need for managers
` In the beginning owners used to do all of the managing, factories go small to large, can’t do it all by themselves, hire people to do it for them
**8. What was the basic change in the industrial revolution?
Transfer of skills from the craftsmen to the machines
**9. What happened to productivity (supply), prices, and demand as a result of the industrial revolution?
` Production increased, prices decreased, demand increased, factories grow in size, hire professional managers
What was the pivotal event of our time, according to Drucker?
The switch from owner/manager to professional manager
11. Why do most businesses fail?
` Poor management
12. What does a first-line manager do? What are the names associated with 1st-line management?
Ensures that the plans developed by top managers and middle managers are
implemented by laborers with minimum costs (efficiently)
~Only managers not to manage other managers
~Short term focus
~Emphasis on efficiency
~caught between management and laborers
~entry position as a manager
13. What does a middle level manager do? What are the names associated with middle level manager?
` Taking the plans from top level management and put them into
action for 1st line management…integrate and interpret these plans! (communication channel)
~Interpret- and transform top management directions into first line management
~Integrate (coordinate first line mangers and their work groups)- activities of different work groups so they operate in harmony with each other and are better able to cope with the demands on them (bring together)
` Plant manager, department head, division head
**14. What is corporate downsizing? What happens in corporate downsizing? What level of management is most adversely affected?
Efficiency oriented by cutting costs (“Cut the fat, by reducing costs by people.”)

`Management levels are eliminated (typically middle management)
`The managers who remain are asked to do more work
~“survivors syndrome” where they become, depression, sadness, stressed, overworked, and think they are the next to leave since their friend’s were just fired and as a result, their productivity decreases.
~efficiency oriented, moral goes down
`Staff management functions are outsourced to consulting
`The company implements new computer/information technology (substitute to middle level management)
15. What does a top manager do? What are the names associated with top management?
`Determine the organizations general goals and plans to achieve those goals
` Strategic planning and legitimize the organization
` CEO, CFO, COO, CSO CIO, chairman of the board, executive vice president
~Long term focus
~Emphasis on effectiveness
**16. What is the difference between a line manager and a staff manager?
` Line -- power over production; have all the power and exists **at all levels of the production pyramid (all authority)
~Can be first, middle, or top
` Staff -- gives support and guidance/advice; most often middle managers! No authority only knowledge and expertise (like a Sheppard’s staff)
~get rid of if downsized.
17. What is the difference between a functional manager and a general manager?
` Functional -- specializes/manages 1 area; 1st-line managers usually (marketing, production, HR)
` General -- manages many areas; “a jack of all trades and a master of none”;
increase as you go up the pyramid (division of all the different functions), more conflict
18. What is the difference between an administrator and a manager?
` Administrator -- Non-profit and public companies
` Manager -- for profit and private companies
What are the 5 functions of management? Be able to identify and describe the five functions of management? {POSLC} Christmas story -post lick
a) Planning - Setting goals and action planning
b) Organizing - dividing up work and coordinating efforts to attain goals
~Division and coordination of that labor
c) Staffing - recruiting and selecting good competent employees (including training, compensation, award bonuses)
d) Leading - motivate, direct, communicate, resolve conflicts (art of influencing other people to willingly peruse organizational goals)
e) Controlling - give feedback
* Top, middle, first-line- perform all of them, everyday and intermix them
* Manager- recruits, interviewing, selecting for the position- staffing
* Goal setting day- develop tactics- planning
* Performance appraisal, evaluate, feedback - controlling
* motivate, directing, resolving conflicts- leading
* dividing, and coordinating- organizing
20. What does “planning has primacy” mean?
First thing you must do as a manager (begin with the end of mine)
~ Sequentially in the beginning then simultaneously
` Gives directions to all of the other functions
21. What are the three aspects of controlling?
a) Monitor performance
b) Compare actual results with “hoped for” results for feedback on performance
c) Taking corrective action if actual < “hoped for” (> party)
**22. What are the Siamese twins of management?
` Planning and Controlling
~Hoped for results comes from your planning
**23. What is (are) the most important function(s) (Spend most time on?) for a 1st-line manager? Middle manager? Top manager?
1st-line = staffing and leading (do all 5)
` Middle = organizing (do all 5)
` Top = planning (do all 5)
24. What are the three managerial roles Mintzberg identified? Be able to identify each role.
Interpersonal - to develop and maintain positive relationships with others inside and out of the company
~sub roles: figurehead, leader, and liaisons
` Informational - receive information and then analyze it
~sub roles: monitor, disseminator, and spokesperson
` Decisional - using information to solve problems or to take advantage of
~sub roles: entrepreneur, disturbance handler, resource allocator, and negotiator
. What gives rise to the three managerial roles, according to Mintzberg?
` A manager’s authority over their organizational subunits gives rise to status
` Studied top level managers- CEO applicable to every level of management
26. What are the three managerial skills identified by Katz? Be able to identify each skill.
Technical - knowledge (expertise method) at LSU
` Human - ability to work well with others (communication, motivation, leadership, empathy, self-awareness)
` Conceptual - ability to problem solve; see the big picture; forecast (systems thinking)
*problem solve, abstract, forecasting, future, big picture, major issue- conceptual
*get along with other people- human
*expertise- technical
*As you go up the management pyramid what happens to technical skill? (decrease in importance) to Conceptual skills? (increase in importance)
27. At what level of management are conceptual skills most important? Technical skills? Human skills?
` Conceptual = top managers because they have to plan
` Technical = 1st line most important
` Human = equally important at all levels
. What skill is most difficult to develop? Why?
Conceptual skills because you need to be smart, have experience, and it takes time to develop this skill.
~requires minimum level of mental ability and time/experience to develop
29. According to Luthans (1988), are effective managers successful managers in general?
` NO… effective managers were not usually promoted rapidly through the
organization; the ones that networked were the ones who moved up
30. What percent of effective managers are successful?
` 10%
~to be successful- 1/3 on communication and 1/3 networking
31. On what activity do effective managers spend the majority of their time? Successful managers?
` Effective = communication, manage down
` Successful = networking - not what you know, but who you know; they manage
Up (can only work if the person you network with stays in the company)
~side: performance does not guarantee promotion
~ networkers- apple polishers, brown nosers
~ not what you know, who you know
32. What is the primary difference between derailed executives and executives who made it to top management, according to the Center for Creative Leadership?
` Derailed executives are insensitive to other people
33. What are the three basic characteristics of an open system? (open to the environment)
` Input - raw materials and resources from suppliers
` Transformation - production of goods
` Output - finished goods and services that you offer the customer
~ two major dependences when it comes to the environment- input (suppliers) and output (customers)- competition
***34. What is the cyclical nature of the transformation process? Negative entropy? Buffering the technical core? Role differentiation and specialization? Synergy? Equifinality? (identify for application questions)
` Cyclical nature of the transformation process = customers and suppliers are equally important (everything is inter connected)
~feedback loop, easy- good, hard- bad; controlling function
` Negative entropy = trying to prevent the company from dying (in decline- loosing market shares, hire a new CEO)
` Buffering the technical core = stability in production to increase efficiency
~ first-line responsible for transformation- should be buffers on each side- protecting production from threatening external environment changes
~ (change only when necessary)
` Role differentiation and specialization = as organizations grow larger in size the roles become more differentiated and specialized
` Synergy = “teamwork”; whole is greater than sum of its parts: 2+2=5
` Equifinality = many roads to success
~competing in different ways see- below

SIDE: Business strategies: (equifinality- cash cow star ect)
~overall cost leadership- good quality low price
~differentiation- quality, design, image
~focus- specific segment
35. What are the five subsystems of an organization? What functions do each subsystem perform?
a) Production = transform raw materials to goods and services (input/output)
~internally oriented
~ buffers the technical core
b) Boundary-spanning = buying from suppliers / selling (marketing) to consumers DEAL WITH 2 MAJOR DEPENDENCIES
~input- externally orients-suppliers
~output- internally and externally oriented-customers
c) Adaptive = research and development (change and adapt)
~externally oriented- effective
~internally oriented- efficient
d) Maintenance = smooth operation and upkeep of organization {Facility Services
@ LSU, Human Resource}
~internally oriented- efficiency
e) Managerial = top and middle management; (FIRST LINE IS NOT INCLUDED IN MANAGERIAL SUBSYSTEM)
`top- plans (external) and legitimizes
`middle- organizes into sub systems and makes sure they run properly together (internal)
36. What are the two major dependencies in the external environment? What is the threat to these 2 major dependencies?
Customers and Suppliers- direct action components
` Their biggest threat is competition
37. How do customers influence organizations and how do organizations influence customers?
` Customers - can cut into your profitability- they have many places to buy from, large quantities ; can demand lower prices/better quality
*Where are customers not important?- important everywhere
~quality- is defined by the customer
Value innovation- innovating on what the customer wants
` Organizations - influence customers by advertising, creating “the need”, joint product service, and marketing research

SIDE: 3 ways to provide customer service:
~easy to complain
~timely and personal response
~response is effective
38. How much more does it cost to find a new customer than to keep an old one, according to Total Quality Management estimates?
` 5 times
**39. How do suppliers influence organizations and how do organizations influence suppliers (i.e., 3 ways to establish and maintain a positive relationship with suppliers)? (is going to be a question)
` Vertical integration - buy your supplier organizations (cooperation increases)
~backwards integration- buying up your customer organizations
` Long term contracts - lock in the suppliers @ a lower price
` Reducing the number of suppliers - the larger volume makes a cost reduction (2 to 3, 1 is too powerful)
. What is the law of the marketplace?
Organizations that can’t compete will be forced to change their product line or
else die out.
41. What are the five forces of competition and how does each influence the level of competition within an industry?
a) Rivalry among organizations - greatest @ mature, low growth
b) Threat of new entrants - new entrants steal market share and drive prices down; increase resource cost, higher the market threat, higher the competition
c) Threat of substitutes - can affect what prices you can charge and due to
technological innovation, can make older products obsolete
d) Power of customers - powerful customers can cut into profitability; customers
who make large purchases can drive down prices, demand higher quality and customer service
e) Power of suppliers -can raise prices or reduce quality of good or stop serving you (2-3)



RIVALRY Many; low industry growth Few; high industry growth

NEW ENTRANTS High threat; few barriers Low threat; many barriers


SUPPLIERS Few; high power Many; low power

CUSTOMERS Few; high power Many; low power

~If it cuts into your profit or market share it is bad
**42. What are the barriers to entry into an industry?
` Government policy (patents which keep competition out)
` Capital requirements- high start-up costs
` Brand loyalty- to established companies
` Cost advantages- to existing customers who buy in large quantities
` Distribution channels- tied up and hard to break in
43. What happens when a new entrant comes into the market/industry?
Increase competition, increase product supply, prices lower, and they seek market share; make other improve quality and service
44. What determines if a suppliers is powerful? Customer?
` Suppliers are powerful if there are few places to buy or if he/she has many
` Customers are powerful if they make large purchases or if they can easily find
alternative places to buy
45. How do powerful suppliers and customers influence organizations?
Suppliers drive prices up or and can cut into the organizations
profitability by providing late and stop serving you
`Customers drive prices down, demand higher quality and service
~You don’t want to depend on powerful customers and suppliers
How do substitutes affect an industry?
Increase competition, increase power of the customer and can make products
` Technological innovations (often substitutes are at a higher price when they
come out)
47. What are process and product innovations? What is the focus of each?
` Process - advancement made in transformation process; more efficient {assembly line}
` Product - an innovation dealing with a product, good, or service; more effective
{light beer}
~good increases competition and creates obsolescence
48. What are the general effects of technology on an industry?
` Increases competition, promotes product obsolescence…you have to change
your product line to meet new changes in technology or risk dying out
**Companies like moderate steady growth
49. How does the economy influence an organization?
` Indirectly by expanding economy which raises demand and vice versa
` Facilitates the establishment of new enterprises
` Almost always unpredictable
` Managers prefer stable economic conditions with moderate, steady growth because violent changes in economic conditions can restrict business investment and growth
50. What are the four ways that government influences organizations?
` Regulations - protect quality of life
` Taxation/subsidies - encourage/discourage businesses
` Direct competition – private vs. government run (post office vs. UPS)
` Economic policy - affect ability to thrive and prosper
51. What is the shadow bureaucracy?
` For every department in an organization, there’s a federal agency governing it
making sure you are following regulations (HR - Department of Labor
52. What are the three ways organizations influence governments?
` Lobbying, direct political action, illegal activity (bribes and kickbacks)

SIDE: direct political action
~vote- for who holds favorable views for your organization
~form PACS
**53. What is a PAC? What are the limits regarding PAC contributions to campaigns?
` Political Action Committee formed by employees and stockholders to lobby government
` Limited to direct contributions of $5,000, but they can give “soft money”
(indirect contributions) indefinite
54. How does society influence business? Businesses influence society?
` Society influences business through changes in social opinions (cleaner
environment, women in the workplace)
~If they don’t see you as legitimate, they won’t buy from you, boycott, or protest against you
` Businesses influence society through charity and philanthropy as well as trying to legitimize their business to society (goal is to legitimize)
55. How does the international component of the environment influence organizations?
` It is both a threat and an opportunity (i.e. more products competing is threat, but
outsourcing and more people to buy is opportunity)
~be aware of their culture and how they do business (page 13 in notes)
56. What is environmental scanning? How is it related to planning and organizational performance?
` Monitor and evaluate changes and trends in the environment
` Allows you to decide what goods or services to emphasize and which markets to
explore and technologies to exploit
~organizations that gather a great deal of environmental information tend to perform better than organizations who gather little
57. What are the three purposes of planning?
a) Establish and help achieve organizational objectives (fundamental)
b) Offset future uncertainties by reducing the risk surrounding organizational
operations (defensive)
c) Affirmative (offensive) seeking out and taking advantage of opportunities to
increase organizational success
58. Why is planning important?
` Organizational success (helps you succeed, but doesn’t guarantee it)
~those who tend to have higher profits and sales than those who don’t
` Sense of unity and devotion
` Coping with change
` Performance standards – defines expected behaviors, rational, objective basis for performance standards
` Managerial development (develops managerial talent)
~you have to practice
**59. Why do managers resist planning? (recognize not memorize for test)
` One of many functions they perform
`It’s hard work
`It can be used to measure results
`Takes time and is expensive
`There’s a lack of immediate feedback.
`It involves change
`The manager may fear failure
`It’s not rewarded by the organization
~What is in it for me?
`It goes against the “doer” mentality
60. What is Gresham’s law of planning? (test questions)
` Even when managers have the best intentions of planning, they day to day problems tend to overshadow planning problems (have wrong priorities)
61. What does the non-planner typically blame for his/her poor performance?
Bad luck = external locus control
62. What are the five phases of the planning process and what happens at each phase?
a) Establishing Objectives - what do you want to do? Begin with the end in mind
b) Developing Premises - what factors are going to affect goal achievement? “forecasting”
c) Decision Making - select best course of action to accomplish objectives set in phase one
d) Implementing A Course Of Action - assign and direct personnel to carry out the plan
~the best plans are unlikely to succeed if they are poorly implemented
e) Evaluating Results - compare actual results with “hoped for” results “feedback”
63. What provides the basis for Phase 1: Establishing Objectives?
` Your environmental scans - avoid threats and exploit opportunities
~if your scanning is faulty then your planning will be faulty
**64. What are SMART goals? or SMAIT?
S – specific whats desired and when
M - measurable for feedback
A - achievable, yet challenging
R - relevant (I - important)
T – trackable (like controlling)
~ M and T are most directly related
65. What is contingency planning? What are the benefits and drawbacks?
` Developing multiple future scenarios and the plans to accompany each scenario
using a “what if”; a dynamic environment
` Benefit: allows you to act rather than react
` Drawback: time consuming and expensive

SIDE: 3 aspects of decision making
~identify alternatives
~evaluate alternative
~select course of action
*66. What are the keys to effective implementation of a plan?
` Tied to the budgetary system - make sure you have the resources to carry out
` A clearly communicative plan – make sure people understand the plan-What, why, how they will help
` Motivate employees WIFM-whats in it for me!
67. What function of management is Phase 5: Evaluation Results?
68. What is the basic dilemma in planning?
`As commitment increases, your willingness to change decreases
~commitment can make you less flexible
*69. What are the different failures to avoid in planning? Be able to identify.
` Top down delegation- take advantage of threats and avoid the opportunities
` Key line managers left out- they have to implement the plan so include them
` Lack of supportive environment (time, training, money, resources, rewards, why do it?)
` Plans that are too rigid of complex [KISMIF - keep it simple, make it fun]
` Failure to manage your plan- failure to implement and evaluate it
~a bad plan admits no modification
` Getting bogged down in the details of planning- get caught up in the thrill of predicting the future
` Unrealistic expectations
70. What is the crystal ball syndrome? Cure-all syndrome? Persian messenger syndrome?
` Crystal Ball -- believing that planning is solely about predicting the future;
neglects implementation and evaluation (same as failure to manage your plan)
` Cure-All -- planning should cure all (panacea) problems = WRONG!
` Persian Messenger -- kill the messenger; neglects evaluating results because no
feedback; when you punish the person who brings the bad news and they are less likely to come to you next time… instead you should reward this person for their fair evaluation because it helps keep the plan in line (when someone comes with a problem ask them for a solution so you don’t end up doing their work for them) (failure to evaluate results)
71. What is the focus of strategic planning?
` Establish and maintain a positive long-term relationship with the organization’s external environment (strategic= grand plan)
*72. What are the four components of a well-thought out strategy? Be able to identify.
a) Scope = where the organization is going to compete; which range of
markets do you want to do business in (Mars vs. Hershey’s)
b) Resource Deployment = how to allocate your resources to achieve the goals
{cash cows for new ventures}
~use profits from its bread and butter areas to finance new ventures
c) Distinctive Competence = competitive advantage; strength sets you off from
competition; what is the company good at? (Walmart- cost, limited- speed)
d) Synergy = different aspects of the company complement each other; 2+2=5
(Disney- parks, movies, tv)
73. What is corporate strategy and business level strategy?
Corporate - what businesses you want to own (increases market share and
profitability); 1 strategy
~focus on scope and resource development
` Business - how you plan on competing with each business; multiple strategies
~focus on competitive advantage and synergy (distinctive competence)
77. What is the goal of the Business Portfolio Matrix Approach?
Own that mix of businesses that will maximize market share and profitability
78. What levels of strategy does the Business Portfolio Matrix Approach deal with?
Both corporate and business level
79. How are SBUs classified in the Business Portfolio Matrix Approach?
` Based on market share (x-axis) and market growth (y-axis) and therefore, will
determine how we deal with them
` Strategic Business Units = businesses we own
**80. What business strategy is used for a cash cow? Star? Dog? New venture?
` Star = HI market share and HI growth; invest all your $ to grow market share
before it matures
~market share is our # 1 strategy
~cash hog
`Cash Cow = HI market share and LO growth; makes huge profits; invest
minimum amount needed to keep market share-stable growth
` Dog = LO market share and LO growth; keep them if they’re profitable (retrenchment), but as soon as they start to loose money, get rid of them (divest) to make more profit
` New Venture = LO market share and HI growth; if you think it could become a
star, invest heavily…if not, get rid of it (cash hog) – give you forecast

SIDE: Portfolio
~new ventures
~cash cows
~profitable dogs
81. What is the basic idea behind Generic Strategies?
` There are 3 basic strategies that can be applied to a variety of industries
` Top managers should develop a feel for their industries and then define a competitive niche by adopting one of these:
**(WILL GIVE A COMPANY) 82. What are the three Generic Strategies identified by Porter? Be able to identify.
a) Differentiation - make an image that your product is different than all others (in terms of quality, design, and future services) so you can demand a high price (i.e. Rolex or Mercedes)
b) Cost Leadership - maximize sales by minimizing the cost per unit and your prices (Wal-mart, Motel 6)
c) Focus - concentrate your efforts on a specific group, product, or geographical location (Lady Foot Locker)
83. What is the basic idea behind the Adaptation model of strategy?
Organization’s strategy must be aligned with its external environment for the organization to be effective (business level strategy)
84. What is a defender? Prospector? Analyzer? Reactor? When is a defender strategy the best? Prospector? Analyzer? Reactor?
`** Defender - demand products not growing; cash cows; stable environment;
effective production; lots of rules and regulations {fast-food restaurants}
~worst in dynamic
` **Prospector -demand growing, expansion; new venture or star; develop;
innovate; few rules and regulations; creativity, dynamic
~worst in stable
` Analyzer - environment moderately changing, combination strategy in name only –ALL STRATEGY BUT DOG
` Reactor - worst strategy! reacts to environment; no set strategy; no set
production process or organization design…inefficient (K-Mart)
** Defender and Prospector are complete opposites **
85. How does each strategy type in the Adaptation Model answer the entrepreneurial engineering and administrating questions?
~ ENTR: Seal off market share (defend market share) through overall cost leadership (lower prices). Stable growth strategy.
~ENG: Efficient production (to lower cost per unit/price)
~ADMIN: Tight control (stay within budget, a lot of cost controls, etc…). Centralized decision making.
~ ENTR: To defend market share with some products and innovate with other products. Scan for new opportunities while protecting current position.
~ENG: Efficient production for some products and flexibility for new lines.
~ADMIN: Tight control over old lines and lose control for new lines. Centralized decision making for old lines and decentralized for new lines.
~ ENTR: Find and exploit new markets (prospect). Scan the environment constantly for new opportunities.
~ENG: Flexible production. Don’t get tied to one technology or invest heavily into a certain production system.
~ADMIN: Loose control to encourage innovation, coordination, and creativity. Decentralized decision making.
~ Worst strategy. Reacts to environment. No set strategy. Therefore, no set production process or organizational design. Answers to the three questions always changing. INEFFICIENT.
86. How are the strategies in the Business Portfolio Matrix Approach and the Adaptation Model of Strategy related to one another?
` Defender -- cash cow
` Prospector -- new venture and star
` Analyzer -- cash cow, new venture, and star
` Reactor -- dog; not all dogs are reactors!
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