MGMT 3000 Lyons Exam 2 Study Guide PDF

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study guide for exam 2 covering chapters 7-10...

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MGMT 3000 Exam 1 Study Guide – Lyons Chapters 7, 8, 9, 10 and 11 March 30, 2016 Chapter 7: Organizational Design Key Terms Behaviorists—those who support a more open organizational structure where roles and responsibilities are more loosely defined Bureaucratic Approach—an extreme form of organizational control in which systems are highly formalized and are characterized by extensive rules, procedures, policies, and instructions Centralized Organization—an organizational structure characterized by formal structures that control employee behavior by concentrating decisions in a top-down hierarchical fashion Clan Approach—a type of organizational control that includes self-supervising teams that are responsible for a set of tasks Decentralized Organization—an organizational structure where key decisions are made at all levels of the firm, not mandated from the top Decision Rights—rights that include initiating, approving, implementing and controlling various types of strategic or tactical decisions Delegation—the process by which managers transfer decision rights to individual employees Division of Labor—the manner in which work in a firm is divided among employees Divisional Structure—a structure that groups diverse functions into separate divisions Functional Structure—a structure that organizes a firm in terms of the main activities that need to be performed, such as production, marketing, sales and accounting Matrix Structure—a structure where both divisional and functional managers have equal authority in the organization Mutual Adaptation—the process by which firms impact the nature of their overarching industrial environment and adapt their organization in response to evolving contextual factors Network Structure—a structure where “knowledge workers” are organized to work as individual contributors or to be a part of a work cluster that provides a certain expertise for the organization Organizational Design—the formal systems, levers and decisions an organization adopts or employs in pursuit of its strategy Organizational Structure—the pattern of organizational roles, relationships and procedures that enable coordinated action among employees Organizers—those who believe that more control is warranted in organizational design to ensure that jobs are performed satisfactorily and efficiently Silos—a functional or divisional unit that operates by its own rules and guidelines and does not openly share information with other units

Chapter 8: Organizational Culture Key Terms Artifacts—visible organizational structures, processes and languages

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Assumptions—a behavior that stemmed from a belief held by a group that is no longer visible, but has become deeply embedded in the organization Beliefs and Values—the meanings that members of an organizations attach to artifacts Culture—the way individuals in an organization uniquely and collectively think, feel and act External Adaptation—how environmental changes impact a firm’s strategy Internal Integration—how work is accomplished in a firm Organizational Commitment—the desired end result of socialization whereby employees become committed to the organization and its goals Socialization—the process of understanding how work gets done and how individuals should interact in an organization Subcultures—cultures that form around geographic or organizational units in a company

Chapter 9: Managing Human Capital Key Terms 360-Degree Feedback—a system in which employees conduct a self-assessment of key competencies and then compare their responses to others in the organization including managers, peers, direct reports and clients Cafeteria Plans—an arrangement that allows employees to make their own choices about benefit plans Collective Bargaining—the process by which union representatives negotiate with the management of a firm to secure certain concessions in wages, benefits, job security or seniority for union members Development—a longer-term, ongoing process of training that improves an employee’s personal abilities over time Downsizing—a process designed to reduce inefficiency and waste that builds up in an organization over time in an effort to be more competitive External Fit—the process of matching a firm’s structure, systems, HR and management practices to the competitive landscape Internal Fit—the process of building and aligning HR practices in support of the company’s strategy Gain-sharing—a team-based compensation structure that rewards teams based on the achievement of certain metrics associated with productivity, efficiency or quality Job Analysis—analyzing information about specific job tasks in order to provide a more precise job description and define the characteristics of the ideal candidate for the position Job-based Pay—pay that is determined by the nature of a particular job Management by Objectives—the process of managing employees by outlining a series of specific objectives or milestones that they are expected to meet in a defined time period Needs Assessment—the process by which an organization outlines what type of training needs to be done and who is best positioned to deliver it Offshoring—outsourcing a business activity to a contractor in a foreign country Performance Appraisal—the identification, measurement and management of individual performance in organizations

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Profit-sharing—a team based compensation system that shares rewards based on improvements in profitability Realistic Job Preview—when an organization provides information to job candidates that highlights the most important conditions of a job including its positive and negative aspects Skill-based Pay—pay that is determined by an individual’s personal skills and knowledge Survivor Syndrome—a condition that can occur when certain employees who survive a downsizing become narrow-minded, self-absorbed, resentful or risk-averse

Chapter 10: Performance Management Key Terms Activity Based Costing (ABC)—the accounting system used to assess the specific cost components of producing a product or service Balances Scorecard—a method created to help businesses translate strategy into action by identifying the most critical measures to drive business success and linking long-term strategic goals with short-term operational actions; it uses four perspectives (financial, customer, business process, and learning and growth) Behavior—the actions and decisions of individual employees Benchmarking—the process of collecting data from the industry’s best players and using their numbers as a goal or guideline for evaluating company performance Budgeting Process—the process for allocating financial resources and measuring expected quantitative and qualitative outcomes of a firm Business Process Perspective—focuses on measurements that will improve a company’s ability to serve and deliver value propositions to its customers Cause-effect Relationships—a set of quantitative and qualitative measurements that are related and mutually reinforcing Control Cycle—the four stage process that provides the mechanisms and systems to monitor the transformation process, ensuring that outputs are produced to the desired quality, quantity and specifications of an organization and its customers Customer Perspective—linking key customer-based metrics such as market share and retention to the financial performance of a firm Drivers—measurements of the balanced scorecard that predict future success Financial Perspective—choosing the financial measurements that are most important for reaching strategic goals Growth Stage—the stage at the beginning of the business cycle that is marked by high investment activity Harvest Stage—the end of a business lifecycle, where a company attempts to extract as much money as possible form business activity If-then Statements—a simple and effective way of analyzing cause-effect relationships Learning and Growth Perspective—identifies the infrastructure and skills needed to carry out business processes, interact with customers, and achieve long-term financial growth; it also helps to identify gaps in capabilities and resources Measurement—the process of evaluating behaviors and outputs to see whether standards have been met or objectives have been obtained Outcomes—measurements of the balanced scorecard that monitor past success Outputs—the products and/or services that an organization produces

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Strategic Control—the process of recalibrating or confirming a firm’s strategy in light of changes in the external environment Sustain Stage—the stage in a business life cycle where the company is investing and extracting money, trying to maximize its return on investment Total Cycle Time—the amount of time required to develop and deliver products and services to the customer Value Propositions—quantitative and qualitative aspects of products or services that customers value most

Chapter 11: Organizational Change Key Terms Disruptive Technologies—innovative forces that include a different set of attributes than those valued by mainstream consumers Dissatisfaction—a component of the change process in which creating dissatisfaction with the status quo helps to free people and organizations from complacency or inertia—it often creates the spark needed to begin the change process Incremental Change—a process in which small improvements are made to processes and approaches on an ongoing basis Inertia—the inability of organizations to change as rapidly as their environment Model—a vision for change Organic Change—a process by which change emerges from individuals or teams as they innovate, solve problems, seek more effective ways to accomplish their work, react to large environmental shifts, or interact with others in cross-functional positions Organizational Change—the processes and activities that organizations go through to align themselves with internal and external changes in the business environment and to prepare for future potential opportunities Planned Change—a process where change efforts are planned and driven from corporate strategy departments or top-down directives Proactive Change—a process by which change is initiated based on some anticipatory event or opportunity on the horizon Process—a series of plans (communication, measurement, etc.) and approaches to implement a change effort Reactive Change—a process by which change is initiated in response to some known external threat or opportunity Sustainable Technologies—innovative forces that improve the performance of established products, along the dimensions of performance that mainstream customers in major markets have historically valued Transformative Change—a process in which change is radical or disruptive, typically in response to a major competitive threat and/or significant change in a firms external or internal environments

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Exam review—Monday, March 28  

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Look at chapter outlines on MindTap Chapter 7 o Section 7-3—Organizational Structures  Functional  Divisional—some firms have different industries under their umbrellas that are just too different to be run any other way than silo’d—slide 34  Matrix—divisional and functional managers for each employee to report to  Network – tech firms, about being able to bring your key people in on any project, anywhere  Example used in class: Hewlett-Packard moved thru all of these  Know advantages, disadvantages, when each is appropriate— “don’t memorize table 7.1, UNDERSTAND it” o Be familiar with Rule of 150 o Basic idea of division of labor—WRONG IN TEXBOOK—use slide  Advantages and disadvantages o Coordinating mechanisms—know these  Bureaucratic (centralized control) vs clan approach (decentralized control)  Clan approach example: Zappos, Netflix  Know advantages and disadvantages and when each is appropriate o Know 3 functions of an organization—figure 7.2 o Understand basic idea of mutual adaptation o Know figure 7.7 and associated appropriate organizational structures o Delegationdecentralized, centralizedhierarchical o Ambidextrous organizations—stay flexible, its KEY! Chapter 8 o Outline—culture is so important and powerful, but not tangible so It’s hard to measure it o Know lists from this chapter!!  What is culture—deciphering the roots of a firm’s culture  Levels of culture—artifacts (visible, how you dress, etc), beliefs (conscious) and assumptions (unconscious) (8-3)  How does culture develop—founder, leaders, teams  Determinants of culture—figure 8.1: people, formal organization, task requirements, leader  Three steps to building organizational commitment—compliance, identification, internalization o Cultural socialization of new people  Organizational commitment  Be familiar with 9 methods of socialization—slide 17 o Looked at Microsoft and Nadella trying to change it from risk averse to cutthroat o Mullally successfully changed Ford’s culture o Crucial moments: mergers and acquisitions and how to combine cultures without devaluing the company being acquired Chapter 9: Managing Human Capital o 3 big ideas from outline: how to acquire human capital, how to we manage current employees, what are the contextual forces while doing that (particular legal environment) o Acquiring  External fit: stage of growth and strategic objectives—know table 9.2

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Cost-leadership strategy vs differentiation strategy vs focused innovation strategy  Internal fit: Is a source of competitive advantage when a firm’s human resources:  Add value to the firm  Cannot exist outside of the company  Cannot be easily imitated by other companies  Cannot be substituted by another resource  Job analysis / realistic job preview  Benchmarking—how much will it cost to get who we want?  Internal vs external recruiting  External recruiting is most expensive during 1st year  Qualitative and quantitative info, social media, work history, GPA  Structured interviews—situational, behavioral, background and job-knowledge questions  Selection tests: specific, cognitive, biographical (biodata), personality, work sample  Danger: can be disparate impact discrimination (unintentional) o Managing (9-3)  Important but skimmed on exam  Know reasons / needs assessment  Informal vs formal types of training  Slide 19—development  Types of feedback and performance reviews  360 degree—not used for compensation, firing and promotion, used for leadership  performance appraisal—measurement of performance, used to make decision on working conditions, promotions, terminations and rewards  know difference between these 2 and what they are used for  know slide 21—management by objectives  participation is key in setting goals and organizational change— “I could get you on a test question with this”  figure 9.1—stretch goals: goals that are too difficult or complicated  Know difference between job-based (UGA) and skill-based (Netflix) pay  Be familiar with slide 25—gain sharing, profit sharing, cafeteria plans  Understand downsizing, survivor syndrome  Slides 33-42 are about discrimination—slide 37!!!  Know requirements for a law to apply, know who is protected, know types of discrimination, know what BFOQs are  Disparate impact, disparate treatment  4/5ths rule, if 20% applications are female, and only 19% get an offer, its not discrimination---read more about this  basic forms of sexual harassment  Offshoring Chapter 10 o Outline is VERY helpful!! o Know basics of control cycle—4 steps and what they mean  Balanced Scorecard under measuring step in control cycle  Look @ a company from 3 more perspectives than just financial  Definitions of customer perspective and business process perspective are very similar “it would be easy for me to get you on a question about this”  What you measure depends on what life-cycle stage the business is in

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Control Loss—NOT IN BOOK  Control:  Achieved when behavior and work procedures conform to standards and goals are accomplished.  Control loss:  Occurs when behavior and work procedures do not conform to standards.  Consequences of control loss  Failure to achieve organizational goals  Restatement of earnings  Replacement of senior management  Drop in stock price  Shareholder lawsuits, etc. Watch the Barcelona video –“I never suggest to watch videos in preparing for exam, but watch this one” Chipotle—you should still be able to answer these questions if you truly understand the material but you weren’t in class Know what ABC costing is Know outcomes vs drivers Know benchmarking and understand/know steps  Benchmarking is enemy of sustainable competitive advantage Total cycle time’s relation to quality If six sigma, DMIC, ISO 9000 are answer choices, they are probably wrong

Chapter 7 Reading Notes  Form Strategy for Organizational Design o

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Division of Labor o o o

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Growing complexity of the competitive landscape, rapid pace of change and globalization and the need to properly align and motivate resources have contributed to the importance of linking a firm’s organizational design with its strategy  Organizational Design: the formal systems, levers and decisions an organization adopts or employs in pursuit of its strategy Strategy and organizational design are co-evolutional and reciprocal in nature Why organizing is relevant  Rule of 150—over 150 employees, managers no longer know what individual employees do, employees no longer know what other employees do, a need for organization surfaces Division of labor: how work is divided among employees Vertical Specialization: how much an employee creates, executes, and administers activities in a certain area of the firm Horizontal Specialization: the breadth of activities that are performed in a certain job  Highly specialized jobs can help develop firm expertise and competency in a certain skill (advantage) but can lead to low satisfaction for a worker (disadvantage) if the work is tedious and repetitive which can lead to high turn over (but also efficient replacement training) Level of division of labor is related to the expectation on how long employees will stay with the firm

Coordinating mechanisms

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Organizers: believe more control is warranted in organizational design to ensure satisfactory and efficient job performance  More job standardization, clear/specific definitions of rules and responsibilities, more hierarchical leadership Bureaucratic Approach: extreme form of organizational control with highly formalized systems that have extensive rules, procedures, policies and instructions  Not successful in creative, innovative, dynamic markets  Close surveillance of superiors over subordinates Behaviorists (human relations management): more open organizational design where roles and responsibilities are loosely defined  Advantages: efficient, can withstand high turnover, provides focus for diverse workforce  Appropriate for: large, complex organizations, measurable tasks, pricecompetitive and cost-sensitive industries Clan Approach: a type of organizational control that includes self supervising teams that are responsible for a set of tasks  Advantages: elicits commitment, employees are self-regulating, can easily adapt to environment  Appropriate for: uncertain conditions, quickly changing industry, work activities difficult to measure

 Organizational Design: Formal Structures o o

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Organizational Structure: the pattern of organizational roles, relationships and procedures that enable coordinated action among employees Organizational structures serve 3 main purposes 1. Defines the roles of the labor force 2. Coordinates activities between members 3. Identifies the borders of the firm and external relationship 3 main types: functional, divisional and matrix  most firms begin with a functional organizational structure, move towards divisional as they grow and some move to a matrix structure

Functional Form o o o

Functional Structure: a structure that ...